Stocks have been a very popular investment for hundreds of years, because stocks are a part of business. Companies are able to raise capital to expand their operations or branch off into new projects. Stocks are traded on stock exchanges, and most stocks are bought and sold through a broker that charges a hefty commission or fee for their services. Two of the most popular stock exchanges are the NYSE and the NASDAQ. Their are other stock exchanges throughout the world.

Stocks have always been seen as long-term investments up until recently with the advent of the Internet. Now, their are day traders that attempt to take advantage of the daily fluctuations in the market by buying and selling many times in a single trading period. This can be quite risky.

The foreign exchange market (FOREX) is much different than the stock exchange. The FOREX is a short-term market while the stock exchange market tends to be for the long-term. Most traders enter and exist a trade within a 24 hour period in the foreign exchange market. It is important to note that forex trades are commission free, so traders can make as many trades as they want without running the risk of huge fees, which are often charged on the stock exchange. The brokers earn money by setting a spread, which is the difference between the asking and the selling prices.

The FOREX is the largest financial market in the world and it handles over $1.5 trillion every day, which far exceeds the $100 billion that is traded on the stock market. It is one of the most liquid markets because of the heavy trading in a 24 hour period. With the stock market, traders often hold their investments for a lengthy period of time, while the forex traders often buy and sell quickly, because the world economy relies on the constant movement of global currencies.

The advantages of the forex market is that their is non-stop trading action 5 days a week, 24 hours per day. The forex is not based in one location, so that enables traders from all over the world to trade their currencies at anytime, day or night. Also, the forex market is more predictable than stocks and follows well-established market trends. It allows higher leverage than the stock market, with the stock market at 2:1 and the foreign exchange market at 100:1. The forex market has mini and micro accounts within investments as low as $25 to get you started. Also, their are no legal requirements or regulations to follow while trading within the foreign exchange market.