Queconomics – Are you curious about the forex trader vs stock trader? Basically, both of those markets are not the same although they look so similar. It is important to know about that first.
It is especially if it is your first time in entering that industry. There are several aspects which can differ one and another. Those are like the lot size, the ownership, contract size, etc.
It maybe looks like so complicated. However, that is not always like that if you train really much and gets a lot of experiences. Here are some aspects that make them different.
Forex Trader vs Stock Trader: the Size of the Lot
Those industries are using lot unit to decide the amount of transaction. The different thing is that 1 lot of stock is equal with 100 company shares. Vice versa, foreign exchange has the different rule.
1 lot standard represents 100000 contract size and 1 mini lot represents 10000 contract size. It means that you should learn about the contract size and it’s detail information.
It can be learned from various different references. The examples are from the internet, books, online class about trading, and many more again. Learning about it will be beneficial.
The Price Mover Factor
Inventory is a part of a company. That is why; its price is always based on the condition of that enterprise. The inventory can increase at several circumstances or conditions.
The example is if a company do a break through that can increase its performance. Vice versa, if they experience any problems, the inventory value will be declined. That is the thing about forex trader vs stock trader.
Meanwhile in a foreign exchange trading, you trade with the currency pair. That is why; the price movement is depended on the condition of the users’ country of the currency.
It can be started from the economic condition, politic, central bank policy, government policies, war, pandemic, epidemic, and so on. One of them is for sure the coronavirus.
The Profit Potential and Loss Risk
You can reach the profit possibility from an inventory by buying when the price is low and sell when it is high. This concept can be done on both; the trading or an inventory investment.
It is better to choose the one with good fundamental for an investment and choose the volatile option got trading. However there is still a risk that you must be faced due to this thing.
Sometimes you need to do a cut loss. It is a condition when someone is willing to sell his inventory with the lower price than the purchasing value. That is the concept of the forex trader vs stock trader.