3. Difference Between Stock And Forex Trading

Equal Potential

No matter whether there is a bull or bear market, in forex there are always opportunities. Unlike the stock market, whether the market is going up or down there is always equal opportunity for profit and loss. Also, there are no limitations on short selling. Forex involves the trading of currency pairs which can gain profit or loss whether the market is rising or falling. It does not matter whether the trader is short or long risk of loss and potential for profit will always exist.

Consummate liquidity

There is no time restriction for forex trading. No matter what time of day it is the trading continues to go on making forex the most liquid market in the world. Forex market trades in one day what Wall Street trades in approximately one month.

More leverage

The most attractive feature of the forex market is leverage. Although it should be noted that trading using leverage can increase the potential risk of loss as well as profit. The maximum leverage for stocks, for example, is 2:1 (i.e. if you invest 1,000 dollars you can buy up to 2,000 dollars of shares). Whereas while trading with CMS Forex you can get up to leverage of 400:1 which means that if a trader invests 1,000 dollars he can buy up to 400,000 dollars in currency.

No middlemen

Forex trading enables clients to trade forex avoiding the middlemen often associated with stock trading. Clients can place trades directly on the chart.

No commission

There are no brokerage, exchange, software or clearing fees at CMS. CMS does not charge any commission as CMS gets compensated through Bid and Ask prices (or spread) of a particular currency pair. Although be aware that the bank you are dealing with may have charges or fees for deposit or withdrawal. CMS is not responsible for this. There may be a fee for fund withdrawals. Please inquire with a Global Currencies customer representative for further information.

Technical trading

Forex trading tends to develop trends and patterns which a trader may identify for new potential movements, breakouts and chances to enter and exit positions.

Rate fluctuation

The major factors that affect the supply and demand of currencies are the strength of the country’s economy and interest rate policy. As currency rates show the supply and demand of currencies, indicators such as the PPI, foreign investment, CPI, the trade balance and GDP reflect the health of the economy and modify the supply and demand for a currency. Data on interest rates and expert observations on international trade and economic policy are also released on a regular basis.

24/7 trading

When you are using a forex trading platform you are seeing a miniature display of the world economy. A trader can access forex markets from 5 pm EST when trade begins in Sydney and Singapore on Sunday and continue trading till 5 pm EST on Friday.

Less trading options

In forex there are about 8 major currencies and 34 second level currencies to choose from, whereas trading in stocks involves about 8,000 different publicly traded companies. Such a huge range of choices may appear to be confusing and complicated.

One of the Excellent Software

Since the beginning, the team of expert forex professionals at CMS Forex has invested long hours improving their software and services to provide a basic, wide-ranging system that enables users to decide sensibly. In addition, services include over 100 tools and technical indicators as well as the latest from Reuters News service to cover all important updates that impact the forex market. CMS Forex has developed an advanced chart-based trading system that contains custom alerts, price quotes, as well as the ability to create an automated trading system so you can pre-program your method to buy or sell at specified market events. Users are able to connect directly with the help of VT trader with the live currency market on a secure platform.

Download the easy-to-install software and open a free practice account for update of the forex market.