The forex (foreign currency exchange) market is the largest and most financial market on the globe. The forex market unlike stock markets is surely an over-the-counter market with zero central exchange and paying off house where orders are usually matched.
Traditionally forex trading will never be popular with retail traders/investors (traders requires shorter term positions than investors) because foreign exchange was only opened in order to Hedge Funds and has not been accessible to retail traders like us. Only nowadays that forex trading will be opened to retail traders. Comparatively stock trading has been online for much longer for retail investors. Recent advancement in computer and trading technologies offers enabled low commission and availability to retail traders in order to trade stock or foreign currency exchange from almost wherever with internet access. Easy access and low commission has tremendously increased chances of winning for list traders, both in stocks and forex. Which of the two is a better option for any trader? The comparisons of retail trading and retail forex trading are as follows;
Nature of the Tool
The nature of the items being bought and sold between foreign currency trading and stocks trading are different. In stocks trading, a trader is selling a share in a certain company in a land. There are many different stock markets on the globe. Many factors determine the actual rise or fall of any stock price. Refer to my article inside stock section to find more information about the factors that affect stock prices. Forex trading involves selling of currency pairs. In a very transaction, a trader buys a currency from country, and sells the actual currency from another land. Therefore the term "exchange". The trader is hoping how the value of the currency he buys will rise based on the value of the currency he sells. You can also buy and sell foreign currencies at xchangeofamerica.
Market Size & Liquidity
Forex market is the largest market on the globe. With daily transactions associated with over US$4 trillion, that dwarfs the stock marketplaces. While there are a huge number of different stocks in the actual stock markets, there are only a few currency pairs in the foreign currency market.