FOREX AND STOCK MARKETS
Forex markets and stock markets (stocks and securities markets) are two independent markets that are not related to each other. The difference between the two markets is that if the forex market trades currencies, then on the stock market, stocks are traded. The stock market is often in the currency market. The largest stock markets are in New York, London and Tokyo.
Another major difference between the forex market and the stock market is the difference in the amount of funds needed as capital in trading. To buy shares on the stock market, large capital is needed from $ 10 dollars to more than $ 100 thousand dollars. In the stock market, trading is done in a phase that is not extreme and stable, unlike in the forex market where in a short period, it is possible to generate large capital or continue to experience significant losses. Some traders who have capital will choose to trade on the forex market, then move to the stock market.
The stock exchange is divided into two, primary and secondary.
The primary market has an important role in the economy of a country; the speed of development and effectiveness of a country depends largely on it. This is where securities are issued for the first time. Buyers in this market are individual and institutional investors (investment funds, insurance companies, etc.). Securities issued in the primary market are held directly or through intermediaries.
Secondary markets include the stock exchange and OTC exchanges. Here, securities are sold. Unlike the primary market, the secondary market does not have an influence on the investment volume of a country. These market participants are speculators, who buy securities at low prices and then sell them at a higher price.
The main regulator on the stock market is price. Prices on the stock market are formed with principles such as: profitability of securities, directivity, depreciation of profits, investor demand, differences, decreases and increases in their income. This principle is realized through a strategy strategy in price formation; set high or low prices, get profits through quick sales, enter the market and own a portion of the market.
Working in the world of stock trading can be done in several ways. Stocks are purchased to get profits in the form of differences in stock prices, dividends, etc. In addition to stability and security in the stock market, before starting to trade on the stock market, make an analysis to minimize investment risks.