For hundreds of years stocks have been a popular investment. Companies issue stocks to raise capital for expansion and new projects. Each share of the stock represents a partial ownership in the company. When the company makes a profit, the value of the stocks rise. Stock owners can sell their shares for a profit, or hold on to the stock for even more gain in the future. Sometimes companies will issue dividends -- part of the profits that are distributed to share holders.
Stock Exchanges
Stocks are traded on stock exchanges. Most stocks are bought and sold through brokers who charge a commission or fee for this service. United States stock exchanges include the New York Stock Exchange (NYSE), the American Stock Exchange, and the National Association of Securities Dealers Automated Quotation System (NASDAQ). Most stocks are listed only on 1 exchange.
Long-Term Trading Vs. Day Trading
Stocks were traditionally seen as long-term investments. So-called "blue chip" stocks, those having proven value over many years, often formed the basis of an investment portfolio.
Short-term trading is a relatively new phenomenon in stock trading, made possible by the advent of the internet. Day traders attempt to take advantage of large daily fluctuations in the market by buying and selling many times in a single trading day. This is relatively risky, and any profits are reduced by the broker commissions charged on each transaction.
FOREX
The Foreign Exchange Market (FOREX) is quite different from the stock exchange. FOREX is primarily a short-term market. Most traders enter and exit deals within a 24 hour period -- sometimes within a few minutes. Many FOREX trades can be made in 1 day without building up a large brokerage fee, because FOREX trades are commission-free. Brokers earn money by setting a spread -- the difference between asking and selling prices.
The FOREX is the largest financial market in the world, with transactions worth $1.5 trillion every day. By comparison, all the American stock exchanges combined handle about $100 billion. The huge volume of FOREX allows it to be 1 of the most liquid markets in the world. There is always a buyer and seller for any type of currency, because the world economy relies on the movement of goods from country to country. The stock market is less liquid because participants may choose to hold their investments indefinitely or move on to other markets.
Non-Stop Trading 5 Days A Week
The FOREX is not based in any 1 location. Trading markets are located worldwide and, due to time zone differences, trades can be made 24 hours a day, 5 days a week. Trading begins in Sydney, Australia on Monday morning (Sunday afternoon New York time) and continues non-stop until Friday afternoon New York time. Stock exchanges have more limited trading hours. While it is possible to trade on exchanges worldwide, each exchange is independent and operates for just 7 hours a day. It is not possible to buy or sell a certain stock that is traded only on 1 stock exchange when that exchange is closed.
Other FOREX Advantages
It is more predictable than stocks; it follows well-established trends.
It allows high leverage -- typically 100:1 as opposed to 2:1 on the stock market
It doesn't require a large investment -- mini accounts as small as $250 can get you started in FOREX.
FOREX trading is not without risk. Neither is the stock market. Either trading vehicle requires education, planning, discipline, and some disposable income.
- Related Videos
- Related Articles
- Ask / Related Q&A
- The Best Low-Cost Way to Invest in Stocks & Stock Funds
- Picking Stocks - Stock Investment
- Cheap Stocks - Stock Insiders
- Stock Trading - An Introduction To Trading Stocks In The Stock Market
- Selecting the Best Stock Trading Software
- Techniques for Stock Market Analysis, Individual Stocks and Technical Analysis
- A New Career - $$ - Day Trading Stock
- Learn How To Read The Stock Market




Tips on How to Obtain a Cheap Car Insurance
By: Patricia Gabbett | 27/12/2009Getting cheap car insurance would be a priority of someone who lacks budget yet wants to protect one's self and loved ones. Here are tips that can help you make your car insurance cheap in terms of money spending. These tips would not sacrifice the quality of your car insurance...
Tips on How to Avoid Auto Insurance Fraud
By: Patricia Gabbett | 27/12/2009Are you aware that an accident in the road can be planned? You can be a victim of auto insurance fraud. Auto insurance companies called a strategy "swoop and squat" wherein the two cars were actually working in tandem to cause a collision, and make it seem like your fault....
Tips on How to Get an Affordable Auto Insurance
By: Patricia Gabbett | 27/12/2009If you are planning to buy auto insurance, remember to assess what you really need for your car. You can spend a great deal of money when you get charged for an accident. Having the lowest rate for your insurance may imply that you are risking your car and own...
Direct Loan
By: Limadijaya Suhendra | 27/12/2009People often say money is the root of all evil. That's because people have gone mad - and have been sentenced to prison - because of money. The world truly revolves around money - almost everything calls for us to dish out cash. Even worse, everything now relies on credit, and...
Small Loan
By: Limadijaya Suhendra | 27/12/2009Have access to a small loan amount is relatively easier than big loans. The rate of interest rate charged on such loans is significantly less than the credit cards which are so popular in the market. On easy term and conditions, there are many lenders that offer these small loan,...
Interest Calculator
By: Limadijaya Suhendra | 27/12/2009It is important that you know the interest rate you get or pay for money, because you will be effortless to compose an assessment with other loan or saving sources. To know the factual interest rate you require using a simple interest calculator for each loan or savings matter. There...
Small Loans
By: Limadijaya Suhendra | 27/12/2009There are millions of people who are in need of small loans every day. Small loans are meant to provide help to individuals who are running out of cash and generally sanctioned if they meet minimal requirements. These loans are approved very quickly, owing to the fact that the formalities...
Learning Forex Trading In A RISK FREE Manner!
By: Ahmad Hassam | 27/12/2009Forex trading is the best home based business opportunity right now. You can learn forex trading in a risk free manner by reading this article carefully. In the end, it all depends how much serious you are in mastering forex trading. If you are real serious, you can master forex trading within 60 days. It is as easy as that!
Is FOREX Trading Better Than Stocks?
By: Ron King | 09/10/2005 | FinanceFor hundreds of years stocks have been a popular investment. Companies issue stocks to raise capital for expansion and new projects. Each share of the stock represents a partial ownership in the company. When the company...
Choosing A VOIP Provider
By: Ron King | 24/09/2005 | CommunicationJust want to chat with friends and family over the Internet, a free service may be adequate. If you're looking for a true alternative to normal phone service, however, consider.
How To Prune Your Roses For Stunning Results
By: Ron King | 15/09/2005 | GardeningFavorite tried-and-true methods, this article is geared toward new-comers who are unsure where to start. As time goes by, you may feel the urge to modify these techniques.
The Perfect Accent -- Miniature Roses
By: Ron King | 15/09/2005 | GardeningOr garden. Compared to their full-sized cousins, miniature roses are practically maintenance-free. Just give them a "bath" once a week, and they'll last forever..