Stock Trading and Other Things

What is forex trading? is there any difference between normal stock trading and forex trading ?

What is forex trading? how does it differ from normal stock market trading?
Are the risk and strategies different? Can forex be more profitable?

Public Comments

1. As a general rule it's much easier to be successful in stock trading than forex trading. Because there's greater risk in Forex the rewards can be greater. If you're using Technical Analysis, the strategies can be the same or fairly similar. The Fundamental differences are much greater.

Forex trading is the buying or selling of currency pairs to profit from the changes in value between two currencies. FX trading is usually highly leveraged (which adds to the risk).

Paper trading gives you little help in judging your performance once you use a real account. There are many factors for this, two would be liquidity & psychology.

2. forex is an over the counter trading site that is somewhat risky

3. Forex trading is speculating and gambling. Because unlike with stocks, you don't get paid dividends on your investment. You only profit by buying low and selling high. Which means that you are speculating about the future and trying to predict it.

You can invest in stocks and stay invested for years. Whereas in Forex trading this kind of a strategy doesn't make sense.

4. In forex you trade currencies one against each other.
Forex has more liquidity, so your chances to get a filled order at desired price are much higher.
In forex, the only commission you pay is the spread, which can be as low as 0.9 pips. The spreads in forex are getting smaller and smaller. They are half the size they were 4-5 years ago, so you pay less for using the services of a broker.
Forex is a 24-hour market, opened 5 days a week (monday-friday).

Forex is not a centralized market - this is a minus. Also, it is not very clear what regulations apply. Every broker has its own regulations, depending on the country it is based on.
In forex you can use high leverage (i saw 1:700 leverage once). However, it is not advisable to use leverage greater than 1:100 (even this is very high and risky).
The risks are probably the same as in stock market, keeping proportions.
The same technical analysis can apply in forex as in stock market.
The fundamental analysis is quite different since in forex you have to watch the news from all the countries (ideally) and figure out how a specific event will influence the currencies.

So if you were profitable in stock using technicals, you will probably make profit in forex also. If you are a fundamental trader, it will be a little more difficult. But it can be done.

Good luck.

5. Forex can be very profitable. There is an online index of 8000 strategies that are continually monitored and sorted by their real-time (live) performance. I suggest you take a look at it, to get an idea of what kind of profit is possible with the Forex. You can also learn a lot from the strategies, and even set your account to follow them automatically. See my link below in my sources(s).

Comparison between Stock Market and Forex:
# - In the Stock Market, you trade the rise or fall of companies, typically.
# - In the Forex, you trade the rise or fall of the DIFFERENCE in value between one currency and another.

# - In the Stock Market, you have no leverage, so to buy a dollar of stock you must pay a dollar.
# - In the Forex, you have massive leverage, so to trade a dollar you only pay pennies or even just a fraction of a penny.

# - In the Stock Market, the charts you see represent the actual value of the market you are trading, and charts should all look more or less the same from broker to broker.
# - In the Forex, the charts you see are kind of fake, generated by the broker, and may differ significantly from broker to broker.

6. With stock trading you are having daily trading hours where the market will open in the morning and close in afternoon. In forex trading, you can trade 24/7, Monday till Friday night.

7. The main differences are 1 in forex trading you get a far higher leverage from your broker, which makes it possible to trade with very little money. 2. You can buy or sell in forex so you can make money on something that is loosing value

8. It’s simply an acronym which stands for FOReign EXchange and is an international market devoted to the buying and selling of currencies. Currency trading in its current form started in the seventies when free exchange rates were introduced for the first time. and only the participants of the market were able to determine the price of one currency against the other based only on supply and demand. It is in a sense, the perfect market system as it is free from any external control.

The amount of money moved in a day is over 1 trillion USD. This figure is an approximate as there’s no centralized information for all the forex markets. Trading takes place every minute of the day for all the 24 hours from Monday to Friday, with many deals conducted through telecommunications.

To learn forex trading, all you need is an analytical / logical inclination and the ability to quickly crunch numbers. To further enhance your knowledge, you can read some specialized forex trading books and enrol for college education in forex trading. Other ways to learn is throu online under the training or mentorship of a professional and successful forex trader.

Although currency trade takes place with all currencies in the world, there are major currencies in the market, which are traded in large volumes and are the most liquid. These include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. Currency trade is done in pairs - like Euros / US$, Japanese Yen/ Canadian Dollars and so on. The aim is to make profit.

9. I think that there is a large potential for making money in the Forex, short and long term. I think the main difference is the volatility of the markets. Stocks are moving much more than that Forex on a daily basis.

What I have done is used a free online school at http://www.intellitraders.com/ . I was able to start a demo account and follow their experts for free. I built up an incredible knowledge of the Forex and systems to use. Also, if you need help trading feel free to Skype me (IntelliTraders) add me would love to talk trading.