Why Forex Beats Stock and Commodity Markets

It is basically fact that the forex market (Foreign Currency Exchange Market) consistently outperforms the stock and commodity markets. This may be something you have heard before, and most likely assumed that was biased. There are however currently so many advantages with the forex market, that it is not hard to see the benefit of investing.

The forex market is truly a 24 hour market which never sleeps – as the sun is setting in one part, the sun is coming up in another. Although the market has cycles- peaks and troughs like any other market, it is not locked into the ‘bull vs bear’ mentality of the stock exchange. As forex is essentially the trading of one’s currency for another, this means when one currency is struggling another is profiting. Further to this the market is not affected by rising interest rates- as this has little bearing on the value of currency. In fact if anything rising interest rates tend to strengthen the currency, as opposed to the stock market in which it has a negative effect.

Currently the combined number of different stock issues on the NASDAQ and NYSE exchanges totals approximately 8000. This is a massive marketplace, and it takes considerable time and effort to accurately monitor the entire stock market. In Forex there are essentially 4 main currencies and 34 second tier currencies which drive the marketplace. One does not need brokerage firms to make a profit in currency trading. Brokerage and commission fees are essentially non existent, and if anything analysts provide information on trends of the currency market, rather than dictating where it should be heading.

The forex market is the ideal platform for anyone seeking a more stable investment. When it is compared with the stock and commodity markets it is plain to see the benefits.