Sunday, January 13, 2008

Forex Vs. Stocks:

Forex

Stocks

24 hour market

Open only a few hours a day

Most liquid market in the world

Limited liquidy especially in the smaller capitilzation stocks

High leverage
100:1 leverage on standard-sized accounts

50% leverage at most
2:1 leverage to the average stock investor

Slippage is usually very limited

There is usually slippage on every order

No commissions

Commissions on every trade

Can go long or short easily

Harder to go short with uptick rule and possiblity of borrowed shares being called

Can make as many trades you want

Daytrading limitations on how many trades you can do in a period of time

Limited risk, most forex brokers will automatically close your positions when your account balance goes to zero

It is possible to have a negative balance after an adverse move in the market

Minimum slippage and order errors

More room for slippage and error

Can short-sell anytime

Need to obey uptick rule in order to short-sell

Minimum slippage and order error

More room for slippage and error

1 comment:

"H" Forex Maker said...

thats the difference between forex market and stocks