Aug 7, 2008

Forex Trading And Stock Trading | ForexGen

The Differences Between Forex Trading And Stock Trading

In the stock market the most common way of placing an order is to buy a share of stock, and sell it later at a higher price. This is essentially what all businesses do. They buy something at one price and attempt to sell it at a higher price. Forex trading is no different. With Forex trading, currencies are always traded in pairs. Since you have to pay one currency for another, the transactions always involve a "pair" of currencies. The goal of Forex trading is to buy the "currency pair" at one price, and sell it later for a higher price.There is also another way to make money on the stock market; this other way is called short selling. Short selling is simply when you sell the stock first at one price, and then tries to buy the stock back at a lower price. The goal does not change - you still want to buy low and sell high. With short selling, you just sell the stock first. Short selling has a much larger risk than traditional stock trading. There are many rules that limit short selling to serious market professionals.Forex trading does not impose any limit on short selling. The risk on short selling in Forex is no different than the risk of buying in Forex. I know you may be asking, "Why there isn't any risk or limitations on short selling on the Forex?" Simply answered, the rules are different in Forex trading.If you would like to find out more about the world of Forex trading strategies and how it provides the greatest opportunity for fast and substantial profits then click on the link below. They are the absolute best and most effective Forex trading strategies available anywhere. Good luck trading.