Is Forex riskier than stocks

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We all have at least once come across a YouTube advertisement where a random individual says how easily they made money in the currency market and how easy it is for you too. Forex can help you make money, but is the risk worth it?

Forex markets are open 24×7, unlike the stock markets, which have timings. But there is one thing stock markets have which Forex markets don’t, A REGULATOR. Forex markets do not have a regulator like SEBI or any clearing house, which means you are at the whim of the opposite individual if they decide to default, well nothing much you can do about it.

For a novice, trading in forex might be comparable to standing on top of Burj Khalifa without a safety harness or wind report. A gust of wind may throw the novice down. It may be easy for an experienced stock trader to understand the trends and react accordingly, which makes forex markets less risky for experienced.

While investing in the stock market tends to produce positive returns generally in the long run (until you invest in Suzlon energy), trading or investing in the forex markets tends to fluctuate regularly as it is not seen as a tool of investment rather a tool of trading.

The amount of investment required in the forex market is higher due to lower spreads, requiring higher volumes to generate a decent profit. In stocks, investing in lower amounts can also generate decent returns for yourself (excellent if you invested in stocks like Ruchi soya from the beginning).

In all, forex markets do seem riskier due to counterparty risk, amount of investment required, and low spreads. If you are someone experienced in stock markets and reading trends, you should only look to venture into the world of forex.

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