The Shanghai Composite Index has been volatile and at one stage dropped more than 30% from its June 12 peak, representing a loss of more than $3.25 trillion to the Chinese stock market.
USG, an Australian foreign exchange brokerage based in Sydney, said that the stock market decline in China has created much anxiety and uncertainty around the world in recent months and many investors are looking to invest more in other markets.
USGFX Chief Executive Officer, Shay Zakhaim, in a statement today said “unlike the stock market, where investors can only profit when the price of their stock increases, with the forex market, investors can profit whether currencies appreciate or depreciate. One of the fundamental differences between the stock market and the forex market is that with the forex market, traders can either long or short their positions and stand to profit from both appreciating and deprecating currencies”
There are also other key differences between the two markets that make the foreign exchange market look attractive to investors and traders.
No central exchange “ The foreign exchange market has no central exchange and is commonly referred to as Over the Counter exchange. Traders can enter and exit trades from anywhere in the world on their computer or mobile device. All that is required is an internet connection and a trading platform.
Leverage “ The foreign exchange markets offer leverage at a significantly higher level than the stock markets. Some foreign exchange brokers can offer leverage of up to 1:500. However, this can be a double-edged sword because whilst traders stand to make significant profits if the trade goes their way, significant losses can also occur if the trade does not go in the direction intended.
To learn more about how to trade the foreign exchange market successfully, [USGFX](https://www.usgfx.com) offer a coaching program to provide a structured understanding of forex trading.
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