Want to have a lucrative business investment without having to bother leaving the house and managing a company? In this day and age, anything can happen. One of the popular online investment businesses today is stock and forex trading. Stocks and forex are 2 of the many investment products that are in great demand by today's society. However, unfortunately, there are still many investors who do not understand the differences between the two investment products.

This business is quite mushrooming and growing quite rapidly. The business, better known as stock trading and forex trading, is a business of buying and selling stocks or forex which is carried out based on observations and world market prices. If you are skilled and trained enough to read opportunities and signals from the market, you can certainly get quite a lot of profit. So, what are the differences between stocks and forex? Let's see the following explanation.

Differences between Stocks and Forex

The working system of the stock market and forex is almost the same. Both are investment capital investment systems for short, medium and long term planning, expecting profits from the difference in selling and buying prices on the market. However, there are striking differences that distinguish the two, including:

Goods Traded

In stock trading, the traded goods are ownership of securities in a company. While in forex trading, what is traded is the price of a country's currency compared to the currency of another country.

Number of Products Traded

Compared to forex trading, seeking profit in stock investment is more difficult because there are more than 10,000 stocks in the world competing in the same business. While in forex trading there are 2 groups that are often traded in the market.

The first group consists of 6 pairs of products that are most often traded (Major Rate). Namely EURUSD, GBPUSD, AUDUSD, USDCHF, USDJPY and USDCAD. Major rates are currency pairs that are compared to the strongest US Dollar (USD) in the market that are quite active in buying and selling prices. The second group is Cross Rate, meaning currency pairs that are not compared to the US Dollar (USD).

In the forex market there are many pairs that can be traded while the stock market is limited to the exchanges in each country, and sells shares from companies that go public only. While the forex market is international in nature.

Influential Factors in Analysis

In stock trading before analyzing, traders must know the condition of the company and all sectors related to the company from the smallest to the largest. While in forex trading, traders do not need to analyze any company, just observe the global conditions of all countries in the world (according to the major rate countries) and the hot things that are happening between one country and another.

Price Manipulation

In the forex market there is no such thing as price manipulation because the market scale is very broad, whereas in the stock market there could be issues that could lower the value of a company, thus lowering the value of its stock prices.

Market Liquidity

Wide market coverage ensures liquidity and price fluctuations in forex trading so that prices never stagnate. While in the stock market, there are many stocks whose value is not worth trading so that their prices stagnate or even no one wants to buy them.

Trading Hours

The forex market follows the working hours of banks in different major countries so that trading hours are connected to each other. While stocks are only open from morning to evening depending on the working hours of the stock exchange in a particular country.

Profit

In stock trading, you only make a profit if the value of the shares you sell increases (one way opportunities), but in forex trading, you can make a profit both when the forex price rises and when the price falls (two way opportunities).

Gaining Profit by Becoming a Trader

So, which do you think is more interesting, stock trading or forex trading? If you want to try your luck in investing, try one of these investments. Become a trader, choose one that suits your interests, learn the concept and master the market, so that your profits can multiply.

Visit GIC Indonesia to get information about the world of trading. You can also join us in the Telegram Community GIC Trade and Telegram Channel GIC Trade. Don't forget to check the Youtube account GIC Indonesia which is full of lots of information, and follow our Instagram account to get information about various interesting webinars that you can follow.