What is a forex and what is the difference between forex and stocks trading?
Let's start by explaining the word forex. This word is derived from the foreign exchange market. Forex is a decentralized market because there is no single entity responsible for trading all currencies, but the big parties connect the world and create a huge global market. These parties consist of four different sides, which are
Global giant banks:
Such as the European Central Bank, and its goal is to adjust the price of currencies according to global demand and according to the economies of countries.
for-profit organizations:
This type includes all profit organizations whose only goal is profit. This category represents 99% of the world's banks, and it includes insurance and investment companies.
financial companies:
Like the cashier or the broker that you trade on
people:
This is considered the smallest type and buys a currency or a commodity or even a tourist buys a second currency
If you want to trade in the forex, you must choose the appropriate currency according to the date you will trade-in, the amount of capital you will work with, and the factors that you will use.
As there are major currencies in forex, first the US dollar, then the euro, then the Japanese yen, the pound sterling, the Swiss franc, the Canadian dollar, the Australian dollar, and the Australian dollar.
And if you want to buy one of these currencies, you must exchange it for another currency. There are 28 currency pairs, and you should focus on the currencies that have the US dollar only because they have more activity, unlike the other currencies, and the best pairs in currencies are the euro and the dollar.
Comparison between forex and stock trading:
trading volume:
The average daily trading volume for forex reaches more than 5 trillion dollars per day, and this figure is greater than any stock exchange number in the world.
work hours:
The forex works 24 hours a day, five days a week, and there are better times on these five days than the times for forex trading. As for stocks, they open according to the dates of the country in which they are located, and this is because there is a central market and a non-centralized market.
Pricing:
As we mentioned that the currency is priced in another currency, or the poison is priced in a currency, meaning that the currency price is a relative price and the price in forex changes by 0.00001.
financial leverage:
Because of the spreads that you get, you can get a chance to get large amounts of money in your investments and represent these investments with big money.
You pay the broker for $50 and you do the broker with the heels of $5000 and you leave the euro and the prices of the euro, the Brooke and the Brooker start to $50 50 dollars have entered into the brochure owner, he will earn and return to participate in the viewing estimated at $ 1 for each sale or purchase of his rights because you are the decision at first
minimum:
The minimum thing that you will buy and the least you can buy is one share, but forex has a different system, mostly 1000 units of the currency that you will buy, and this does not mean that you are worth 1000 dollars in order to buy 1000 units.
commission:
This is all about comparing forex trading and stock trading in a nutshell in order to be able to differentiate between them and to be able to choose one of them in order to make the trading process. There are other articles that talk about 7 tips for novice traders and another article that talks about the meaning of the word trading and its basics.
trading simply means exchanging one thing for another. You buy something at one price and sell it again at another price. When we talk about trading in the financial markets, we use the same principle. Think of a person who trades stocks. What he actually does is buy shares or a small part of a company. If those shares increase in value, he makes money by selling them back at a higher price.