Stocks or currencies, the choice is based on the nature of the trader.
Having decided to make a career as a trader, most beginners are faced with choosing a stock or currency, stock exchange or forex market.
It would seem that there is no particular difference in which instrument to trade in the metatrader terminal, all the same orders, the same indicators, and often the same brokers.
But if you analyze both types of trading, you can find a lot of differences that affect the choice of one or another asset.
1. Leverage – as a rule, when trading currencies, it is several times greater, and sometimes hundreds of times. That is, profitability and risks in Forex are also proportional to leverage. If when trading stocks, rarely anyone trades with a leverage of more than 1:5, then currencies are bought at 1:100.
3. Automation – there are practically no advisors who trade stocks, while auto trading occupies a huge niche in Forex trading.
4. Complexity and simplicity - in my opinion, trading on Forex is simpler; here the fundamental thing is technical analysisTo be a good trader on the stock exchange you need to have a more in-depth knowledge of the economy, have an idea of what the financial condition of the enterprise is and how the value of shares is formed.
5. Intensity of trading - transactions on shares can be held for months, and sometimes even years, since here, in addition to price growth, dividends act as additional profit, and it is quite difficult to make money on a price with low leverage.
At the same time as intraday forex trading requires constant participation, which is compensated by greater profits.
6. Availability – there are many more brokers involved in Forex trading, and the choice always generates competition, that is, trading is more comfortable, and commissions for opening transactions are lower.
In addition, it is not so easy to find a broker that provides full access to the stock market, and does not trade only the 100 most popular securities.
That is, we can say that if you are a gambler, counting on quick profits and at the same time do not have deep knowledge of economics, your way to the Forex market. Here you can trade automatically using advisors or copying the trades of professionals.
At the same time, if you feel like an investor in yourself who is more interested not in buying faceless currencies, but in investing money in the assets of enterprises. After tracking how the business grows and develops, what changes are taking place in the chosen area of the economy, your choice is also obvious - the stock market.
The size of capital also plays an important role in the choice; I would not recommend starting stock trading without having a capital of $5,000; perhaps, this aspect will be decisive when choosing for most beginners.