FOREX and stock markets are almost similar and you can find lot of common things between them. Regardless if you are trading FOREX vs.. stocks, you use the same charts and trading tools. You are even allowed to trade both at the same time in some trading platforms.
Technically, there is no difference in trading FOREX vs. stocks. In opening and closing positions you can do them the same way withy only one exception. Stock exchanges in various countries open and close at regulate business hours, while FOREX market is open 24/7. If you trade intraday you should close all your stock positions before stock exchange closes because of this single reason.
The thing that a particular stock or a currency pair represents is the biggest difference between. Stocks may represent single companies or baskets of companies, however in Foreign Exchange, currency pairs represent economies of entire countries. For instance, EURUSD currency pair represents the entire European economy vs. the entire US economy.
It means that any economic events happening in any european country or in the US will affect the price. On the other hand, any bad news about Microsoft, will not affect Waymart will not affect stock. But if they compete on the same market, like Microsoft and Apple, each will be affected if something happens in any of them.
To decide if you want to trade FOREX vs. stocks, you need to understand what you want to achieve in trading.
You may go safe with good quality stocks, but it will only give you a little return, and you may also go with FOREX which is extremely risky and volatile but gives you great opportunities to make a big buck.
You may go for quality stocks if you want to be safe. Go for FOREX if you want fun and money!
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Posted under Currency FOREX, Options, Stocks
This post was written by LinkVineAuth on January 2, 2012
