Forex market and stock market (stock and securities market) are two independent markets with no relation to each other. They differ in trade instruments: currencies are traded on Forex market, and shares, on a stock market. Stock markets are often located at the stock exchanges. The largest stock exchanges are situated in New York, London and Tokyo.
Another difference between Forex and stock market is the amount of money required for trading. In order to buy shares on a stock market, one will need a significant amount of money, from $10 thousand to over $100 thousand. On a stock market trading is moderate and steady unlike on Forex market where one can either earn a large capital or sustain significant losses within a short period. Some traders who made a fortune on Forex market then move to a stock market.
In its turn, a stock market is divided into primary and secondary markets.
The primary stock market plays an important role in a country's economy: the pace of its development and effectiveness depends on the primary market to a great extent. On the primary market the companies usually launch their IPO. Buyers of the securities on this market, as a rule, are individual and institutional (investment funds, insurance organizations, etc.) investors. Securities on the primary market are traded by turning to investors directly and through intermediaries.
The secondary stock market includes over-the-counter market and stock exchange. Here investors resell already emitted shares to other investors. Unlike the primary, the secondary market has no influence on the volume of the country’s investment flows. The main participants of this market are speculators who buy securities at a low price and then sell them at a higher price.
One of the major regulators on a stock market is a price. It is formed with direct participation of specialists, emitters, intermediaries and investors. The prices on a stock market are formed in accordance with several principles: securities yield, their issuers, demand, situation on the market). These principles are realized through the strategies of price formation on a stock market: to setup the initial high or low price, to quickly gain profit from selling, to enter the market, and to conquer a part of the market.
Stock traders have different aims: to get profit in the form of stock rate difference, to receive dividends, etc. Despite stability and safety of a stock market, before trading on it, one is advised to analyze the market to reduce the risks.