In these markets where many advantages come together, you can turn your savings into profit with a conscious approach. In our article, we tried to find an answer to the question of why forex is recommended more than stocks.
Today, forex, which makes a difference to other financial markets with its size and trading volume, can be budget-friendly when you are equipped with the right information. Here you can make profitable investments and have the amount of money you dream of earning.
You need to constantly improve yourself in these markets, which are different in some aspects but also advantageous. Otherwise, it is inevitable that you will experience losses that you cannot prevent. In this case, you may encounter people who talk about the advantages of the stock market.
Investor candidates, who learn all the subtleties of the markets, will of course prefer the one closest to them. Although they are completely free in this regard, sometimes wrong choices can be made. Here is the answer to why you should prefer forex instead of the stock market so that you can get to know both better;
- Forex Is the World’s Largest Market
Forex is a global market. Due to this feature, it has the capacity to gather all the investors of the world in one place. As you can imagine, this will result in a large transaction volume. And yes, the trading volume here is quite high compared to other trading platforms.
For example; Imagine that everyone in your neighbourhood is shopping at the same grocery store. It will be the biggest grocery store in the neighbourhood, right? The Forex market is the same.
So, what does it mean for forex to be the world’s largest market? Let’s answer right away; There is a daily trading volume of 10 trillion dollars in the market here. This means that you can get a higher profit in a short time. We can say that your share of the pie is increasing!
- Unlike Stocks, Forex Has No Specific Center
The Forex market is managed through major trading centres located in various parts of the world. In other words, transactions are made through trade centres in countries such as New York, Hong Kong, Sydney and London.
In the stock market, the place where you trade is certain and these markets are only active at certain hours. However, due to the fact that the geographical locations of the trade centres are different from each other, the working hours form a cycle around the world. As one closes, the other opens, thus keeping the market open all the time.
Investors, on the other hand, can perform 5/24 transactions except on weekends. As for where Forex transactions are made, we can say that nowadays you can trade anywhere you want over the internet.
Another advantage of these markets, which do not have a specific centre, is that you can make your transactions while the market of the country you want is open. So, you may find it more advantageous to trade when the US markets are open. That’s what the forex market makes possible. Trading in a foreign country’s market in stock market is a very complicated task.
- Offers Prices Equivalent to the Whole World
Through these platforms, while you are making your transactions in your own country, you will evaluate the same prices as the investor on the other side of the world. In other words, two people who invest in EUR/USD and whose location is different from each other see the same changes and make purchases and sales at equivalent prices.
This situation is quite different from the price formation in the stock market. When you place a buy order for a stock at a certain level in the stock market, your position will not occur until that level is realized. In Forex, you place your order directly at the price you see and you complete your transaction.
The other important part is for those who prefer to invest in places such as jewellers. Even if gold has a certain price, each jeweller can give a different price. In this case, it is almost impossible to know what the real price is. In Forex, you have the advantage of being able to buy and sell at a single price.
- Opportunity to Invest Wherever There Is Internet
In the Forex market, you can trade anywhere you want 24 hours a day, 5 days a week. On vacation, on a lunch break, on the bus or in traffic; You can make your buy and sell transactions and control your portfolio wherever you have an internet connection.
Transactions are made entirely over the internet and as long as you have a connection, it is possible to make transactions regardless of where you are. You can easily perform your transactions by installing the trading platforms known as the Trader program on the device you want.
Installing these trading platforms on your desktop computer, laptop, tablet and smartphone and having an internet connection will provide the appropriate conditions for you to invest.
Today, you can do stock market transactions in the same way online. It is possible to place orders through the mobile applications of your brokerage house, but this process is simpler and safer in forex. You can find details about making mobile investments in our related content.
- Earning While Prices Are Both Rising and Falling
One of the most advantageous aspects of these markets is that you can also earn money from the depreciating investment instrument. Normally, you place a buy order on an instrument that you know will increase in value, and when the price rises, you sell and make a profit. Here, the forex market offers you the advantage of doing the opposite.
In other words, you give a sell order to the investment instrument that will lose value and you sell short. When the price drops, you make a profit thanks to the short-selling you have made. This method is known as bidirectional processing.
There is also short selling in the stock market. But it is not preferred because it is a bit risky. Contrary to what is done here, you are making a loan transaction by short-selling on the stock market.
That is, you trade as if you had that investment instrument, and when the price drops, you profit from the amount other than the portion you borrowed. In the Forex market, there is no borrowing, and your transaction will only take place thanks to the ‘sell order’ you place.
- High Profits with Leverage Ratios
One of its most attractive features is undoubtedly its leverage ratios. Thanks to this feature, you can have the opportunity to trade up to 100 times your money and thus the profit you will get increases up to 100 times.
In many country, leverage ratios are limited to 1:100. In other countries, it can be used up to 1:400. The most important point you need to know here is that the risks are also increasing.
Our advice to you is that you should make leveraged transactions consciously and stay away from rates that are not compatible with your collateral without tempting to turn the corner in a short time.
There is no leverage in the stock market. There is a certain leverage ratio used in futures transactions, but the system works differently than forex. In case of any loss, you get a margin call and increase your loss.
- Risks Are Avoidable more than Stocks
Here, in case of a possible loss, it is in your hands to stop your losses. Thanks to the stop-loss order, it is possible to limit the risks in your position.
When creating a position, you can set a risk ratio and have the trade stop automatically if things go wrong. Thus, you will never face big losses and you will protect your guarantee.
Thanks to the stop-loss order, you can make safer transactions in the face of fluctuating prices. This method facilitates the work of investors and prevents losses to a large extent.
You can limit the risks by using your orders correctly in the stock market. But you should not forget that this process requires good experience.
In the stock market, your orders are transmitted to the market in two stages and the price levels must be the same for them to be realized. Forex orders, on the other hand, can be placed by the investor quite simply.
- You Can Trade with a Wide Range of Investment Instruments Unlike Stocks
There is a wide variety of investment instruments in the Forex market. You can see the currencies of almost all countries of the world here on the market.
You can invest in the currencies grouped as major, minor and exotic in pairs, that is, as parities. In Forex, your transactions are made on this value.
Commodities, on the other hand, consist of many products that we often encounter in daily life. Many commodities, from the orange juice you drink to oil, gold to cotton, are traded in the forex market.
When we talk about the stock market, the stocks that come to our minds first are also frequently encountered in the forex market. So, it is possible to trade stocks here as well.
In addition, stocks traded in forex are owned by world-famous companies. In other words, you can buy and sell the stocks of giant social media companies such as Facebook, Twitter, Apple, Google with forex. It is even possible to perform these operations in a very simple and effortless way.
At the same time, giant stock market indices such as S&P 500, DAX, Dow Jones are among the investment tools of the forex market. In other words, it is possible to trade with all investment instruments supported by your brokerage house. From this point of view, investors are offered a very rich choice of instruments.
- Free Education
It is also a very nice feature that these markets have free training opportunities. So, you don’t need to research courses to gain knowledge. In addition, because they are free, you do not pay for training that you do not know if they are suitable for you.
If you are not sure that this platform is a place in line with your expectations, you can easily learn it by taking advantage of free training. In addition, the fact that these training are not binding does not leave you under any suspicion.
This training, which is given by intermediary institutions and can be used by anyone who wants to; e-books, training videos, online seminars. In addition, the experts of some brokerage houses can write their own forex books. Some of the investors can have these books for free.
It will not be a dream to reach all the details you wonder in a short time by making use of these books.
If your goal is to improve yourself, you can take advantage of many resources where you can get information from the most basic level to advanced. Even while sitting at home, you can find all the information you are curious about at your fingertips.
- Gaining Experience Without Risk
Yes, you can learn how to trade in the forex market without risk. Thanks to the demo accounts in which virtual money is loaded, you can see that it is easier than you think to understand what this place is like.
You can see Forex as a game, but you should also be aware that it is a useful game when you play it right. If you want to make successful trades and earn money, you can experience it on demo accounts without risk.
By installing these demo accounts on your computers, tablets and smartphones, you can trade wherever you want and gain experience.
Thanks to the demo accounts, you can see how the investment transactions are realized, what is done and how you win or lose.
Normally, you learn this information by investing your own money; but thanks to the demo account service provided by forex, you can get information without risking your money.
In addition, demo accounts also contribute to improving your own strategies and trading techniques and are very important in this respect.
- Opportunity to Earn Money in the Short Term
These markets, where the transaction volume is quite high, increase their preference in this respect. You often hear that the stock market is suitable for long-term investments and forex for short-term investments. Because any order you give here is executed within seconds.
Thanks to today’s developing technological opportunities, it is possible to make money in these markets in the short term. Most investors want their transactions to be concluded as soon as possible due to both the need for money and impatience. Here, it is said to be quite suitable for short-term investments, as this is an environment where money flows quickly.
Prices change instantly here and you can be a winner in the short term with an effective market follow-up. You should have information about what affects the prices of instruments.
- Transactions at Low Costs
The costs that investors have to bear may sometimes discourage them from trading. Transactions can be carried out through free platforms.
The investor who wants to trade here does not have to bear the fees such as commissions or transaction fees to the brokerage house for the instrument he has chosen. This indicates that these markets are relatively inexpensive compared to others.
- Non-Manipulation Transaction
There is no risk such as manipulation in forex, which is one of the largest markets in the world, and this makes it advantageous. Thanks to prices that cannot be manipulated, investors make their transactions on the basis of trust. You can browse our related content to learn what manipulation is.
Here, the prices change instantly and the investor tries to make a profit in the short term by following them. There is no manipulation of prices and the analyzes made prove this.
- A Safe Investment Environment That Is Constantly Supervised
Investors want to know where and under what conditions they invest their money. Especially someone who has no previous experience in trading in the markets is confused about whether this environment is safe or not.
Today, we see that the number of those who prefer the forex market has increased considerably. The biggest factor in this preference is that it has better features than the stock market.
First of all, there is no time limit in these markets. It is very difficult to follow the stock market session hours amid the daily hustle and bustle. Because there are opening and closing hours of the stock market during the day.
In the Forex market, we can invest 24 hours a day, except weekends. This feature makes sense for a working investor to choose this place, doesn’t it?
As a result, this market, which stands out with its globality, has more interesting features than others. These features, which we have mentioned as the advantages of the market, allow you to both earn high profits and invest in better opportunities compared to other markets. Here, with the discovery of such features, it is recommended to prefer forex instead of the stock market.
Above, we have shared some general information about the trading features and market structure of the platform in question. Of course, our aim was not to show the stock market as a bad place and to praise the forex market.
Which market you prefer to invest in is completely related to your investment expectations. Choosing a market that doesn’t suit you for the sole purpose of making more money is one of the biggest mistakes you can make.
After all, the main purpose of everyone investing is to secure their future and increase their income. How you do this is entirely your choice.
By understanding the logic of the markets and gaining experience, you can decide for yourself which market is the most suitable for investment over time.
SEE MORE: Forex vs Cryptocurrency Trade