Know the Difference Between Stocks and Forex Knowing the Difference between Stocks and Forex – The stock market and the foreign exchange market (forex) are two of the most well-known financial markets in the investment world.

    These two investments are quite profitable, but have a high enough risk. The mechanics of trading in the forex and stock markets are basically the same.

    However, there are some differences between the two. In the following, we will share Knowing the Difference between Stocks and Forex below the information.

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    Stocks do not have ‘leverage’ options

    In general, the definition of leverage is the use of borrowed funds to increase the return on an investment.

    In forex trading, investors can use leverage options with a certain ratio.

    Trading hours

    The trading hours of the stock exchange are limited from morning to evening, following the trading schedule of the Indonesia Stock Exchange (IDX). While in forex trading, trading hours last for 24 hours.

    fundamental analysis

    In its implementation, forex trading does not require fundamental analysis. As for stocks, prioritize fundamental analysis with the aim that the stocks purchased have a good foundation to continue to increase.

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    Investment objective

    Investments are generally aimed at long-term profits. In forex, currency values ​​tend to fluctuate, so forex is more correctly intended for trading or trading than investing.

    While stocks can be used as a trading and investment tool. Stocks that have good performance tend to fluctuate continuously so that they can be used as an alternative investment and also trade.

    Traded goods

    In forex trading, quite a few items are traded. The majority of forex traders only focus on the value of major currency pairs such as EUR/USD, USD/JPY, GBP/USD, USD/CAD, AUD/USD, and NZD/USD.

    While the stock has a lot of merchandise or issuance. There are hundreds of issuances that can be sold and bought in the IDX. When combined with world stock exchanges, then there are thousands of stocks that can be traded.

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    Transaction nature

    The next difference is in selling time. The nature of stock transactions can be considered one-way. You buy an issuer when the exchange opens and sell it at the close of the exchange. The difference in price when closing can be both a profit and a loss.

    While in forex trading, this transaction has a two-way nature. You can buy it and then sell it for a short time, then buy it again after a while.

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