Stock Exchange Vs Forex

Stock Exchange is more like a share market. I view it as a source to create surplus liquidity for corporates, which enables them to handle big projects which they would not be able to go for without floating their share to the public for investment. Different companies compete each other under the rules and regulations of same country or economy. The cattagory of competition is not product based but it is based upon the profitability. More profit a company makes, higher is its share price. Investor is neither interested in the product the company sells, nor in the exchange rate. Only thing which matters is the growth rate of that company. 

In stock exchange investor only buys to sell, it is always the share verses the currency. There fore Investor must buy something in order to sell. In other words it is one way market. You can not sell what you have not bought. Where as forex is economic war field for countries and economies. 

              

In forex the investor can sell what he has never bought. He can sell currency to buy another. With his available liquidity he can sell any currency which he did not have and can get the other currency purely based on speculations. In stock exchange the speculations are based upon international news and fundamentals, because stock exchanges are locally driven. But in Forex market all the fundamentals are compared between the countries, thus concluding the strength or weakness of a currency against other. 

           One thing which never changes between Forex Market and Stock exchange is the technical analysis. Moving averages, stochastic, Bollinger band, RSI, ROC, parabolic SAR, momentum and all other technical indicators are applied and worthy in the same passion on both the markets, and this is an edge for a technical traders that he can trade in any market without much studies of the local prevailing scenarios. There are many traders who are trading in all the stock markets and Forex at the same time as portfolio based on their technical analysis. In the next article i will discuss in details how stock exchanges operates and the terms used in the stock exchange.