Forex Trading vs. Stock Investing- What's the Difference?

 

Investors are people who study the fundamentals of the financial vehicle before purchasing them, and they usually hold it for a long period of time before selling it for a profit. While Traders are people who study the technical movements of a particular financial vehicle, and trade on momentum to take advantage of the volatility of the price movements. They usually hold it for a very short period of time and lock in smaller profits.

Actually, trading and investing can be done in both the share market as well as in the foreign exchange market .

However, investing is usually associated with stock markets because Investors prefer holding long positions as compared to short positions (short positions stock market investments are considered illegal in some countries, including Malaysia). Whereas Traders in the stock market can only use long strategies, which means that they can only profit on an uptrend, and sit tight on a down trend.

Therefore, professional traders prefer trading in the forex market, where they have the benefit of long and short strategies, and are able to trade in both up trends as well as down trends. They sell as soon as they have reached their target profits, and cut loss if the price strays too far. They repeat this strategy again and again very quickly so that they take in profits faster than would a long term investor.

M Asia Trade is an e-business consultancy firm that monitors both the forex and the equities markets and provides trading as well as investment advice.

For More Details About Business, Please Visit: www.masiatrade.com