The differences between trading on these markets are mostly in the approach to market analysis and in understanding the reasons behind price movements. Some of the main differences are:
1. Fundamental analysis.
Usually, market news does not affect the price of an index, but can affect the prices of particular stocks it comprises. Analysing and gathering this data can be more difficult and time-consuming than in Forex trading.
2. Trading hours.
The index is traded according to the opening hours of the stock exchange, while Forex is active almost 24 hours a day. The market hours of the foreign stock exchanges on our website.
3. Price movements.
In currency pairs traded on Forex, the final quote depends on the relationship between two national currencies. Basically, one currency is moving against another.
In indices trading, you should take into account the movement of numerous stocks included in an index. If one company’s stock is falling or growing, it will not necessarily affect the index. On the other hand, when the index price is falling or rising, this indicates the general trend of the whole market represented by the index.