At the moment I am also looking into “stocks”.
Are there any major differences between trading online “stocks” or “Forex” regarding strategies, indicators etc. etc.?
Thanks!
Michael
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Trading FX and stocks is like apples versus pears. They are similar but different.
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With stocks , you’re buying a bit of a company and it’s more about company news and earnings. Whereas with Forex , you’re swapping currencies, looking at charts, and keeping an eye on big world events. Forex can let you trade with more money than you’ve got, while stocks are a bit stricter. And while you can easily bet on things going down in Forex, stocks have some rules around that.
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Stock Trading:
You buy and sell pieces of ownership in companies.
Trading happens during specific hours.
Influenced by company news and economic factors.
You use indicators and strategies like in Forex but often focus on company health.
Forex Trading:
You trade one currency for another.
The market operates 24/5 due to global time zones.
Affected by world events and economic factors.
You can use similar indicators, but it’s more about country economics.
The key is to understand the differences and choose the one that fits your goals and risk tolerance. Both require good risk management.
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This isn’t what the Babypips educational pages say, at all. In fact they make it very clear that you’re not: you’re just betting against a counterparty on the price movements of their own product. No currency swaps occur, and nothing is physically traded.
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You’re right. Forex trading is betting, no currencies are being bought or sold.
But then all short-term trading is betting, even if shares change hands.
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[quote=“Michael0410, post:1, topic:1218080”]
Are there any major differences between trading online “stocks” or “Forex” regarding strategies, indicators etc. etc.?
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One of the differences is about working hours. Stocks have set hours but forex is 24/5 and follows by the global events.
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Betting…“the action of gambling money on the outcome of a race, game, or other unpredictable event”
But still people tell me Forex Trading is not gambling, lol. You cant make this stuff up.
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I treat stocks and Forex pretty well the same from a TA view. There are differences though, other than market hours. In Forex you don’t have to worry so much about earnings, unless there is a chain reaction like what has happened this month.
Earnings reports for several of the big tech companies came in very negative, which has dragged SPX500 down significantly. This has had a ripple effect on the USD, strengthening it. When US stocks are down, USD is up. But obviously, it’s much more complex than that, that’s just one example.
It’s all intertwined in different ways, but you can buy and sell both with ease. There is a stigma amongst many regarding shorting stocks. The markets are ruthless and IMO as a trader you have to be an opportunist and take advantage of every opportunity, long or short, otherwise you might as well just invest.
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Not sure if I follow, what do you mean by betting? Forex isn’t considered trading of currencies? What would be the difference between Forex and Binary Options? The last one definitely is for me betting (read: gambling).
Thanks!
Michael
It’s widely considered that.
And that’s how retail spot forex brokers want their customers to consider it, and they do what they can to encourage that illusion.
But it is an illusion and not a reality.
Read the lesson to which I posted a link above, Michael, and you’ll understand.
Many of your recent questions here would actually be very well answered by reading the free course, which I recommend! 
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Trading Spot Forex is trading a contract for difference, so you are not taking possession of an asset and then selling it later. You are making a wager on the difference in price only.
A difference that is not being mentioned so far between stocks and forex is that stocks tend to be more directional and appreciating when the underlying company and business model are healthy or depreciating when the company and business model are weak. Forex tends to be a mean reversion market where prices tend to come back to the mean price which results in longer term ranging markets. The nature of the asset class should be considered when conducting analysis.
Google (Alphabet)
General Electric
EURUSD
USDCAD
GBPJPY
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Trading has a predictable outcome if you have a seasoned strategy.
Stocks and currencies are both tradeable assets.
The biggest difference is the ability to trade forex with high leverage.
For example, at 50:1 leverage, you can open a $100,000 EUR/USD position with just $2,000.
If you wanted to do the same thing with a $100,000 AAPL position, the usual max leverage is 2:1, so you’d need $50,000.
Of course, there are ways to get more leverage using instruments like options or CFDs.
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Funnily enough I know people who gamble for a living who would say the exact thing.
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There are two different points of view: one is theoretical, and the other is real-world. First, you need to understand the theory, and then you must grasp the practical realities. For someone asking about two different concepts, I don’t believe it’s appropriate to go into details immediately. Initially, he or she should familiarize themselves with the basic concepts before exploring the specifics.
Forex is 24/5 with high liquidity, driven by macroeconomic factors, and often has higher leverage. Stocks trade during set exchange hours, are influenced by company-specific news, and might offer less leverage.
I forgot to add what they say…Stocks is akin to addition while Forex is like multipication.
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Both have their pros and cons. The bad thing about stocks is that the market is only open for a short time, forex is 24/5, crypto is 24/7.
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