Forex Vs Stock Market : What’s the best market in 2020?
This is a very loaded question that I see asked a lot.
The Forex Vs Stocks debate is a very broad one since both markets are great ways to make money and both industries have a wide number of professionals who make a living trading one or the other. (Lots of people trade both forex and stocks).
There really is no definite answer. Stocks and Forex Trading are both viable paths to financial success. These markets have both bankrupted businesses and also made skilled traders millions of dollars.
Forex and stocks are unique from other ‘jobs’ when you consider the exponential rate at which you can grow your initial investment.
Since you are trading with rapidly fluctuating prices hoping to bank a profit, sometimes the prices change drastically. If you are on the right side of a trade, you have the ability to double/triple/quintuple your bank account, which is something you can’t do working an hourly wage job.
Of course, this opportunity to make insane amounts of money can also work against you. People day in and day out lose massive amounts of wealth as consequence of trading the ever-changing markets.
That being said, there are people who always win big in the long run. Stocks and Forex traders alike are making millions of dollars everyday just by trading smart. With the right training and strategy, both stocks and forex can be lucrative money makers
As I said, either can make you lots of money but stocks and forex both carry high risk when you trade.
However, I personally prefer one over the other due to less money needed at the start and the possibility to earn a much larger return on your cash.
I’m sure you probably can tell which one I prefer due to the name of this website, but please, read on if you want to know why.
This is a multi-faceted question but there are distinct benefits between the two.
Basics: Forex Vs Stock Trading
There are various ways to grow your money. Those who prefer a conservative approach may maintain a few high-yield savings accounts and explore other options, such as money market accounts and certificates of deposit. But even with a competitive interest rate, these methods won’t grow your money as quickly as investing in stocks or foreign currency.
The stock market and forex trading are unpredictable and volatile (think stock market crash), and some people can’t stomach the constant ups and downs. If you can stick it out and learn the ropes, both investment strategies can prove profitable. But, which one is right for your money?
There is no simple answer, and like any type of investment strategy, you have to educate yourself and weigh the pros and cons. To put it plainly, the forex exchange market is the buying and selling of foreign currencies for profit, whereas the stock market involves buying and selling shares of stock on the open market.
Although neither approach is safer than the other, understanding how they differ can help you make an informed decision. For example, the forex exchange is worldwide. The stock exchange, on the other hand, takes place within a country. Given this difference, the level of trading on the forex market significantly exceeds the amount traded within a country. In fact, over 2 trillion dollars are traded daily on the forex market, says Market Watch. And because the forex trades actual currencies, it’s quicker and simpler for investors to liquidate their trades.
Additionally, forex is cheaper than stocks. If you’re investing in the stock market, a broker may require a minimum of $1,000. In the forex exchange, you can open an account with $250 to $300. There are no commissions deducted from your profits with forex, and because this is an international market, you can trade 24 hours a day, seven days a week. The stock exchange is closed on weekends and trading is limited to certain hours.
If you’re an experienced investor, you may lean toward the foreign exchange because it gives you a lot of leverage – thus increasing income potential. But while you can earn a lot, don’t forget the more money you put in, ultimately the more money you risk.
Talk to any investor and they’ll probably say that the foreign exchange dwarfs the stock exchange. The former has undeniable benefits, however, the latter can work for investors who want to minimize their risk.
You can’t predict stock performance and returns are never guaranteed. But with so many options on the stock exchange, you can choose to invest your money in a company with a proven track record, as opposed to a riskier stock. And yes, the forex can offer higher returns. At the same time, stock market returns aren’t anything to frown about. It is not uncommon for investors (both new and experienced) to see modest returns of 8% a year.
Verdict: Forex Vs Stocks
In the end, there is the long-term growth potential with both the stock exchange and the forex exchange. When deciding the best route for your money, consider how much you have to invest, your skill level, and how much you’re prepared to lose. Some people automatically prefer the forex market. Make sure you understand how both work, and then select the strategy within your comfort zone.
Obviously, I make my living trading Forex. It’s treated me well. I have many friends who trade stocks for fun or do so professionally, however, this is a website about forex.
So, I prefer Forex.
Forex requires a lot less capital and it is easier to learn for beginners to the investing world. With the right training, you have the chance to make a much higher return on your investment with forex as opposed to stocks.
The lower barrier to entry and the increasing amount of free material online to learn forex makes it a great choice for beginners.
As I say on this site often, if you are new to the world of forex then free reading isn’t enough. It’s crucial you make the initial investment and get a proper forex course training- they are usually $300-1000 but are well worth the investment in the long run.
If you want to start trading the forex markets and not lose money, learn how to trade. If you want to read about the one course I recommend for beginners, go here. It is seriously a forex blueprint that will teach you everything you need to know and get you to make those big money trades as fast as possible.
If you still aren’t sure of whether you want to trade forex or stocks, keep reading and doing your research.
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I’m a full-time forex trader, happily making money from the comfort of my own home.
I help others find financial freedom and success with forex trading.