Why Forex Trading Beats Stock Market Trading

The main reason why forex trading beats stock market trading is amount of options to invest in, in that there are fewer options to invest in foreign exchange, and therefore fewer key players that can be predicted to influence the market. Further to this it is the basic nature through which the foreign exchange interacts - it is less prone to unpredictable swings than with stock trading. This article will detail the major reasons why forex trading beats stock market trading.

The foreign exchange market is over 30 years old. It is not one that is based on value's of businesses, but rather values of currency. For this reason there are much fewer units which trader's can invest in. Currently there are approximately 4 major currency players, and 34 second tier currencies which have some bearing on market activity. Currently the number of different stock issues on the NASDAQ and New York Stock Exchange totals approximately 8000. You do the math, would you rather be analysing the performance of 38 products or 8000?

Currency exchange is truly a 24 hour marketplace- as the sun rises in one location, it is setting in another. The forex market certainly does have peaks and troughs like the stock market, however it does not relate to the 'bull vs bear' mentality which is rife on the stock market. This essentially means the marketplace is divided up by investor's who believe the market value will increase, and by investors who believe the value will dive. A major difference with foreign exchange is that when one currency suffers, this causes another currency to profit. This clearly makes it easier to make stable predictions within the forex.

A major advantage to invest in the forex market is that interest rates have little bearing upon performance of the marketplace. Interest rates have a highly significant influence on stock trading, yet it can have the opposite influence on the currency trading market- it can in fact improve it!

One does not require a brokerage firm to trade in forex - in fact there are many successful individual traders's profiting consistently from foreign exchange. Many of these trader's will confess that the key to their success lies in their ability to interpret data and statistics of the foreign exchange market, and further to this efficiently manage this data and know how to exploit it for profit. Forex trading software such as the Forex Killer System has truly levelled the playing field, and gives individual trader's an edge in the currency trading market place. Software platforms are generally not as effective when interpreting stock trading data, as the volume of products is too high to constantly make winning predictions.

Conclusion

As mentioned the main reason why forex trading beats stock market trading is due to the volume of investment options. The currency trading market has a manageable amount of variable which can be predicted and acted upon in a simpler fashion than with the stock market. Being able to predict market swings and act upon them with precise timing is the key to success in any form of investment.
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