- Market size and liquidity: Forex is the largest and most liquid financial market in the world, with daily trading volumes exceeding $6 trillion, while the stock market is smaller and less liquid. The high liquidity of the forex market means that traders can easily enter and exit positions at any time, without the risk of being stuck in a trade.
- Trading hours: Forex trading operates 24 hours a day, five days a week, which provides traders with greater flexibility in terms of trading hours. In contrast, stock market trading is typically limited to the exchange's opening hours, which can vary depending on the country and exchange.
- Investment size: In the forex market, traders can start with a small investment and still have access to significant leverage. In contrast, stock trading typically requires larger initial investments and offers less leverage.
- Market structure: Forex trading is a decentralized market, where trades are conducted over-the-counter (OTC) between market participants. In contrast, the stock market is a centralized market, with trading taking place on a centralized exchange.
- Fundamental drivers: The forex market is primarily driven by global economic and political events, while the stock market is more influenced by the performance of individual companies and their earnings reports. Forex traders typically focus on macroeconomic indicators, such as interest rates and economic growth, while stock traders focus on company-specific data, such as revenue and earnings.