Forex has often been compared with stocks to determine which market is better to trade. Although they are somewhat interconnected, both markets are vastly different. When choosing to trade forex or stocks, knowing the differences and similarities between the stock and forex market enables you to make informed trading decisions based on factors such as market conditions, liquidity and volume. Fxforex.com is here to give very basic information on the top 5 differences between forex and stocks. Do note that these are fundamentals and you need to do more homework on your own before actual investments.
1. Volume
Forex offers sheer volume. Forex is estimated to trade around $5 trillion a day, with most trading concentrated on a few major pairs like the EUR / USD, USD / JPY, GBP / USD and AUD / USD. This figure dwarfs the dollar volume of all the world’s stock markets combined, which average roughly $200 billion per day.
The high trading volume offers numerous advantages to traders. They can typically get their orders executed easier and closer to the desired prices.
2. Liquidity
A higher volume market generally provides higher liquidity. Liquidity leads to tighter spreads and lower transaction costs. Forex major pairs typically have extremely low spreads and transactions costs when compared to stocks and this is one of the major advantages of trading the forex market versus trading the stock market.
3. 24 Hour Markets
Forex is not transacted over a traditional exchange. Trading is facilitated through the interbank market which means that trading can happen 24/7 across the globe. Major stock indices, on the other hand, trade at different times and are affected by different variables.
4. Minimal or no commission
Most forex brokers charge no commission, instead, they make their margin on the spread – which is the difference between the buy price and the sell price. When trading stocks, often traders must pay the spread along with a commission to a broker. Forex spreads are quite transparent compared to the costs of trading other contracts.
5. Narrow focus vs wide focus
For forex, traders are focused on eight major currencies while for the stock market, we are looking at thousands. The narrow focus allows traders to concentrate their efforts rather than spread their emphasis across thousands of stocks. The variables affecting the major currencies can be easily monitored using an economic calendar.
Forex Or Stocks?
Whether you choose to trade forex or stocks depends greatly on your goals and preferred trading style. It is important that you read up more before making your choice. If you are up to it, you may consider doing both too! 
