Advances in information and communication technology have not only affected the world of technology itself, these advances have also resulted in rapid developments in the business and economic world which are marked by the birth of various digital economic trends, one of which is trading.
Trading is an investment in buying and selling global markets of various types of products, the transaction process using certain applications, carried out online, and followed by traders from all over the world, depending on the wide range of trading applications used. In this article, we will discuss a comparison of two very popular types of trading, namely forex trading and stock trading.
Although at first glance it looks the same, Stock Trading is not the same as Forex Trading, there are many differences between the two types of trading.
Both types of trading have their respective advantages and disadvantages. However, one thing they have in common is that they both have the potential for gains and losses in each transaction. If anyone wants to try one of the two, then you need to learn first, before investing in one of them.
This is so that you can understand how it works and the investment system, and understand which trading is the most suitable for you. This is because between forex and stocks, both have different ways of working and the character of the investment system in the management process.
In this article, we will discuss the differences between forex and stock trading, the end result of which will allow you to make your choices when investing with trading, be it forex or stocks. The differences between forex and stocks are as follows:
Global Market Fluctuation Rate
Point The significant difference between forex and stocks lies in the speed at which the market fluctuates in each. The forex market has a very high rate of fluctuation when compared to the stock market. This is due to differences in global market capitalization rates. This is because the forex market at the global level has a very large market capitalization compared to the stock market.
For example, suppose there is a stock trader who has a capital of IDR 2 trillion. So with this capital the trader is able to buy shares of a company as a whole. It is different for forex traders, because in forex trading a nominal value of Rp. 2 trillion is not included in the fantastic value category when compared to the total capital value traded in the forex market.
There is a Short-Selling Feature Facility
Short selling is a trading technique that is usually used in stock sales or forex transactions, where an investor or trader is allowed to borrow funds to buy and resell shares that they do not own at a higher selling price when the price rises. In this short selling feature, the hope of an investor or trader when using this feature is for him to get a number of profits, to repay his previous share loan.
Things That Affect Graphic Analysis Techniques
In the stock trading process, a trader needs to analyze the factors that can affect stock prices on the market. In the analysis process, a trader will need to analyze various data, for example the financial statements of a company, as well as all sectors related to the company, even the economic conditions of a country where a company is founded.
Meanwhile, in the forex trading process, a trader does not need to analyze company data. Because, the object of trade is only related to the value of buying and selling currency in a country. Therefore, the data that a forex trader needs to analyze is a comparison of conditions between one country and another.
Quantity and Type of Products Traded
In the world of stock trading, there are no less than 10,000 types of stocks spread across various countries in the world. Meanwhile, in the world of forex trading only one type of product is traded, namely currency. For example, the Euro currency against the US Dollar currency, the US Dollar currency against the rupiah, and so on.
The form of the product being traded
In the world of stock trading, the products traded are in the form of securities as proof of ownership of shares in a company. Meanwhile, in forex trading, the product being traded is in the form of a contract price of a currency in a country, with the value of a currency in another country.
In the world of forex trading, it is always necessary to compare the price of a country’s currency with the currency of another country. In contrast to stock trading, the value of a stock product in a company does not need to be compared with the value of other stock products.