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How is the Trading Forex Different from Trading Stocks

The two financial trading industries are complex and have their own different sets of risk levels. There are stock traders who invest in forex and forex traders are trying their luck in stock marketing. For a new trader, the choice can be quite confusing. One of the most prominent reasons some traders favor the forex to the stock market is forex leverage. Below, we explain the differences between stock trading and forex trading. 1.       Cost of entry You will need much smaller money for entering the forex market rather than the stocks one. Although forex market demands lower entry resources, you can make use of leverage. This instrument helps traders to magnify their profit (or losses) and make greater capital from the smaller investment. 2.       Lower spreads on forex Spreads, the difference between the bid and ask price are on average smaller resembled to stocks. Although some large-cap stocks have tight spreads, it is not the case with many other stocks t