For hundreds of years stocks have been a popular investment.
Companies issue stocks to raise capital for expansion and new
projects. Each share of the stock represents a partial ownership
in the company. When the company makes a profit, the value of
the stocks rise. Stock owners can sell their shares for a
profit, or hold on to the stock for even more gain in the
future. Sometimes companies will issue dividends — part of the
profits that are distributed to share holders.

Stock Exchanges

Stocks are traded on stock exchanges. Most stocks are bought and
sold through brokers who charge a commission or fee for this
service. United States stock exchanges include the New York
Stock Exchange (NYSE), the American Stock Exchange, and the
National Association of Securities Dealers Automated Quotation
System (NASDAQ). Most stocks are listed only on 1 exchange.

Long-Term Trading Vs. Day Trading

Stocks were traditionally seen as long-term investments.
So-called “blue chip” stocks, those having proven value over
many years, often formed the basis of an investment portfolio.

Short-term trading is a relatively new phenomenon in stock
trading, made possible by the advent of the internet. Day
traders attempt to take advantage of large daily fluctuations in
the market by buying and selling many times in a single trading
day. This is relatively risky, and any profits are reduced by
the broker commissions charged on each transaction.

FOREX

The Foreign Exchange Market (FOREX) is quite different from the
stock exchange. FOREX is primarily a short-term market. Most
traders enter and exit deals within a 24 hour period –
sometimes within a few minutes. Many FOREX trades can be made in
1 day without building up a large brokerage fee, because FOREX
trades are commission-free. Brokers earn money by setting a
spread — the difference between asking and selling prices.

The FOREX is the largest financial market in the world, with
transactions worth $1.5 trillion every day. By comparison, all
the American stock exchanges combined handle about $100 billion.
The huge volume of FOREX allows it to be 1 of the most liquid
markets in the world. There is always a buyer and seller for any
type of currency, because the world economy relies on the
movement of goods from country to country. The stock market is
less liquid because participants may choose to hold their
investments indefinitely or move on to other markets.

Non-Stop Trading 5 Days A Week

The FOREX is not based in any 1 location. Trading markets are
located worldwide and, due to time zone differences, trades can
be made 24 hours a day, 5 days a week. Trading begins in Sydney,
Australia on Monday morning (Sunday afternoon New York time) and
continues non-stop until Friday afternoon New York time. Stock
exchanges have more limited trading hours. While it is possible
to trade on exchanges worldwide, each exchange is independent
and operates for just 7 hours a day. It is not possible to buy
or sell a certain stock that is traded only on 1 stock exchange
when that exchange is closed.

Other FOREX Advantages

It is more predictable than stocks; it follows well-established
trends.

It allows high leverage — typically 100:1 as opposed to 2:1 on
the stock market

It doesn’t require a large investment — mini accounts as small
as $250 can get you started in FOREX.

FOREX trading is not without risk. Neither is the stock market.
Either trading vehicle requires education, planning, discipline,
and some disposable income.

Ron King
http://www.articlesbase.com/finance-articles/is-forex-trading-better-than-stocks-3561.html

Filed under: mini forex trading

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