FOREX investing vs. Stock investing

I was interested in investing in FOREX last year (a month ago). That is why I decided to compare the two.

For starters, Let's first outline the difference between Stocks and FOREX.

-Stocks are traded on Stock exchanges. Most stocks are bought and sold through brokers (agents) who charge a commission for this service.

-FOREX is the Foreign Exchange Market it is a little different from the stock exchange. FOREX trades are commission free ( you keep the profit).The FOREX is primarily a short-term market. Most traders invest within a 24-hour period – sometimes within a few minutes.

The good thing about FOREX is that it follows established trends, it allows high leverage – mainly 100:1 instead of 2:1 on the stock market. You can invest in FOREX with as little in some account with as little as $250. 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 which is good for FOREX.

As for stocks you can invest with as little as $25. But, stocks has limited trading hours. With FOREX for example, trading markets are located world-wide and because of difference in time-zones 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.

To make a long story short, If you are a long term investor FOREX is not right for you. You are better off investing in stocks. If you like constant day trading activity, FOREX might be the right choice for you.

I like to take risks but with constant day trading, I do not have the time or effort to commit to it. Therefore, I will stick with stocks for now.

photo courtesy of http://www.saxobank.com/

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