Why Has Forex Become the New Favorite for Investment Compared to Stock Trading

Coin World reported:
In the global financial market, foreign exchange and stock trading have always been the focus of investors as two bright stars. Although the stock market has attracted a large number of investors with the diversity of stocks and corporate growth, foreign exchange trading has gradually become a new favorite in the eyes of investors in recent years due to its unique advantages. So, what are the remarkable advantages of foreign exchange trading compared to stock market trading?


Low trading costs
The trading volume of the foreign exchange market is very high, with a daily turnover of over 5 trillion US dollars. The reason for its high trading volume is that exporters and importers of currency, people traveling to other countries, buyers of foreign stocks and bonds, retail and institutional investors, and central banks all engage in foreign exchange trading. The large number of trades means that it is very easy to find buyers and sellers for each currency pair, which helps to keep trading costs at a very low level.
High leverage
Because the risk of major currency problems is small, volatility is low, trading costs are low, and there are many traders, the foreign exchange market has leverage.
Foreign exchange leverage is similar to buying a house or apartment, you can use a small initial deposit to build a large position. For example, in some markets, you can use a $50,000 deposit to buy a $500,000 house; the rest of the money will be lent to you by the bank.
Low manipulation risk
The stock market carries higher risks because a few influential individuals and media personalities may push valuations in a direction that is unfavorable to you. Sometimes trading stocks means that perhaps only a tweet could leave you with nothing. We have seen how much influence Musk has on his company, Tesla’s stock, and cryptocurrencies such as Dogecoin and Shiba Inu. Even Trump’s views on the market when expressed on Twitter have an impact. The manipulation risk of the foreign exchange market is much lower because the currency market is too large.


Round-the-clock trading
Foreign exchange trading is open around the clock, allowing people to trade at any time and any day of the week. As a result, some traders have developed unique strategies for the Asian, European, and American trading sessions.
Fewer markets to monitor
Trading in the foreign exchange market means you only need to monitor a few countries: the United States, Canada, the European Union, the United Kingdom, and Japan. Of course, if you wish, you can also include Switzerland, New Zealand, Australia, and others. But most traders only focus on major countries.
In contrast, stock market traders need to monitor more companies, with major news every quarter possibly changing the price outlook for a stock for months.


Closely related to macroeconomic trends
The goal of the foreign exchange market is the exchange of currencies between countries, not the performance of specific companies. This makes foreign exchange trading closely related to macroeconomic trends and more suitable for tracking the international economic situation.
Do you think U.S. economic performance will outperform the eurozone? Then you can buy dollars against euros, and if your view is accurate, you can get a lot of returns. There are also more tradable views, such as at the end of 2021, when South Africa experienced a new variant of the coronavirus called Omicron, leading to a collapse of the South African rand. For example, the Russia-Ukraine conflict, the collapse of the ruble; the demand for the dollar as a safe haven, and the vulnerability of the eurozone due to its geographical proximity to Ukraine and its reliance on commodity imports (especially natural gas). Experienced currency investors make long and short trades based on these judgments.
Of course, foreign exchange trading is not limited to those interested in economics and politics. On the contrary, most people use technical analysis, which involves studying historical price patterns, to trade in foreign exchange.
Despite the many advantages of foreign exchange trading, investors should also be aware that the foreign exchange market comes with risks. The uncertainty of exchange rate fluctuations, the potential losses from leverage, and the impact of global events on the market all require caution from investors.


Trade with 4E
In today’s fast-paced financial world, finding a reliable platform is crucial. As a professional financial asset trading platform, 4E trading platform provides investors with a wide range of investment options. The platform has a good reputation in the international market and is the official global partner of the Argentine national team, supporting over 500 investment products such as foreign exchange, gold, crude oil, stocks, cryptocurrencies, and indices, opening the door to diversified investments.
Especially in the field of foreign exchange trading, the 4E trading platform, with its unique advantages, supports nearly 20 currency pairs, creating opportunities for investors to explore the foreign exchange market. The platform supports trading anytime, anywhere, with simple operations and comprehensive functions, and low costs, making it easy for both beginners and seasoned investors to get started quickly.
Currently, 4E is holding the “Crazy Thursday” event, where trading foreign exchange, commodities, and derivatives every Thursday can earn a 100% cash reward! Come to 4E, every Thursday, to embrace new trading opportunities and get higher returns!