Forex trading in Australia is becoming more and more popular especially when fluctuations are on crazy heights. Forex trading is done...
Forex trading in Australia is becoming more and more popular especially when fluctuations are on crazy heights. Forex trading is done not only by savvy traders but also everyday people who have a few thousands to even hundreds of dollars. This wasn’t the case before though. In the past, trading and investing in the financial markets was only doable for the elite class and large financial institutions.
Forex Trading vs. Australian Stocks
There are two main financial markets that have the highest volume of trades. These are the Forex market and the stocks market. These two have several differences but both can be profitable. For starters, the Forex market is the largest, most liquid financial market in the world with its $4 billion daily trade volume. The stocks market on the other hand has a $74 billion daily trade volume.
One of the major advantages of Forex over Australian stocks or from other countries is the fact that it is open 24 hours a day, since it’s a global and decentralized market. This makes it possible for Forex traders around the world to conduct trades at anytime of the day.
For stocks trading, it is considered a more traditional way of investing and there are many people who prefer stocks because of the common notion that these are a safer investment and one that is more suitable for long term investments.
The real disadvantage to the stocks market however is that there is more uncertainly with it compared to currencies. For instance, if there is some sort of crash of your stock or of the entire market, this can result to substantial losses. Moreover, there are over eight thousand different stocks on the NASDAQ and the NYSE and these can be very costly in terms of time and effort trying to keep up with these all. In Forex trading, you need to only focus on one or a few more pairs of currencies. This allows for a more accurate and in-depth analysis in order to trade profitably.
You might also think that trading in the Australian Forex market can be more expensive than stocks, but the fact is – when compared to stocks, futures or options, it doesn’t really cost a ton of money. There are several online brokers out there that offer micro accounts and mini accounts, and some with a minimum deposit of $50.
Now, while stocks and currency trading in Australia has their own pros and cons, remember that just like other types of investments, these two come with risks. And by adding more to your knowledge and experience consistently, you’ll be able to see some significant profits whichever investment you choose.
