Friday, November 26, 2010
Comparison between the stock markets and forex markets
Comparison between the stock markets and forex markets
Always faces a dilemma when investors decide speculation in financial markets; Will play the stock market regardless of whether local or global? Or speculate in the currency markets? Despite the markets to contain the risk,forex however, we find investors are divided into Section prefer to deal with stocks and the Department would prefer to achieve gains through currency trading,forex there are those who prefer to diversify investments among them forex.
Throughout this article we will discuss the similarities and differences between each of the stock markets and exchange markets or forex; may we help you dear reader to choose the best investment for you in case you decide for speculation in financial markets forex.
Begin to identify each of the markets even says to us to tell the difference between them forex
Equity markets:forex stock markets take many names such as the Stock Exchange or the stock market "Stock Exchange" in nature but differ from ordinary markets, which are sold and bought in goods and different products for cash or different ways of payment. Cargoes that are traded in the securities markets are not real assets,forex but they securities or stocks and bonds,forex which reflects the per share or bond on the possession of the owner of a part in the issuing company of shares of this stock.
Stock market is based on legal norms and technical control performance and control the selection of securities for trading them and the timing of disposition of property,forex and may face investor non-Rashid big losses if bought or sold in the stock market without rely on the valid conclusions based on information and accurate data on the status of arrow or financial support that handles it.
Referred to the level of the stock market the so-called point and calculates a score of loss and gain in the stock indices on a daily basis through what is called at the closure,forex where they are compared to the closing price of the day with the previous day in the case of height indicates that increasing the number of points of any investigation pointer to gains in this day,forex and vice versa.
Based investors in the stock market on the two main types of financial analysis of shares subject Trading: The first type is technical analysis,forex which depends on the expected movement of the arrow and its direction in the market depending on the movement's historical price,forex and using diagrams that determine when to buy or sell or retain the stock,forex and are the use of specialized programs in the conversion price changes to the graphs linking the price of time.
The second type is the fundamental analysis is the process of examining the financial statements of companies that are trading shares for the purpose of access to the real value of the shares.forex The basic analytical approach helps to reach the stock price of any bugs that are priced the lowest or the highest share of the value of the real,forex is also interested in fundamental analysis is also the general economic climate in the state and control of financial decisions issued by the government and see how the impact of this on the movement of companies and thus This reflection on the stock prices in the stock market.
Exchange markets: or Forex which refers to the foreign exchange market or the global stock of foreign currency a short term economic of the English language "Foreign Exchange Market", market, which extends all over the world, with an exchange of several participants,forex led by central banks In addition to international banks and international institutions and financial markets,forex traders and individuals.
Are buying and selling of various currencies against the U.S. dollar, which is the main currency known as the currency pairs,forex and may be the husband is a particular currency against the U.S. dollar or the currency against other currencies,forex known as the Cross.forex And are traded by buying and selling major currencies, which possess the basic share from operations in the forex market is the U.S. dollar (USD) the base currency,forex the euro (EUR) and pound sterling (GBP) and Swiss franc (CHF) and Japanese Yen (JPY) The Australian dollar (AUD),forex Canadian Dollar CAD)) and the currencies of other Arab and foreign countries.
It is worth mentioning that the Forex market relies on modern technology in communications and the Internet and are widely developed recently,forex which prompted the market to attract large numbers of investors during the past years.forex This addition to dealing with the trading software Once you have a computer connected to the Internet,forex you are ready to be handled in the Forex markets, even if you do not know to deal with the Internet or computer you can trade via telephone calls to brokerage firms.
And FX track in stock exchanges across the networks OTC (Over The Counter) are markets where buying and selling goods without a central location specific,forex but are buying and selling between companies, banks and individuals through communication networks and computer at the time,forex one of hundreds of banks around the world .forex This is the reason for the magnitude of the currency market, there are hundreds of millions of dollars are sold and purchased every few seconds. And currency exchanges are also characterized by various indicators and technical analysis,forex news analysis and rapid access to profits.
Similar methods of analysis used in the currency markets with those in the equity markets,forex although the content differed: Technical Analysis in Forex also depends on the historical movements of the currency at him and try to predict the future through the use of specialized software to do so.forex Since the fact that currency trading is accompanied by huge volume of trades and cash more often than those found in equity markets,forex we find also that the techniques of technical analysis and technical patterns taken by the currency could see the achievement of the objectives higher than those achieved by the stock supported by high liquidity.
As for the fundamental analysis, it is in the case of a currency depends on the study of the financial statements and ID the real value of the shares, but is dependent on the study of economic indicators published by the global economies, particularly countries that are trading currencies in the Forex markets. Along with this is taking into account the political changes that would affect the economic climate for these countries which makes the analysis of your primary currency is the largest and more comprehensive than that in the case of equity markets.