How is trading forex different to share market?
Is it true that buying shares means you own portion of the company, but for forex, you own the currency you purchased?
Forex Version 20, Foreign Exchange Market Discussion
Forex Version 20, Foreign Exchange Market Discussion
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Dec 16 2017, 04:55 PM
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1,572 posts Joined: Oct 2015 |
How is trading forex different to share market?
Is it true that buying shares means you own portion of the company, but for forex, you own the currency you purchased? |
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Dec 16 2017, 08:01 PM
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QUOTE(watabakiu @ Dec 16 2017, 04:55 PM) How is trading forex different to share market? Is it true that buying shares means you own portion of the company, but for forex, you own the currency you purchased? QUOTE(duplicated @ Dec 16 2017, 05:21 PM) Forex's leverage is higher and your potential profit is higher, also your loss. Thanks for taking the time to entertain a no0b like me, this is very much appreciated.If you buy a company's share, you own the company. In forex, for most brokers, you don't own anything. You are purely gambling on the price. Unless you are trading with ECN brokers and the likes. Understoos that buying shares makes one a shareholder of the company. But when it comes to buying forex, one does not necessarily owning the currency? Say, I am buying USD, I am only speculating that either the price will go up (of in the case of shorting, that the price will go down), but at the end of the day, I do not own the USD? |
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Dec 17 2017, 01:06 PM
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Very well written @Lupine101, now I have understood this better. I am also aware that trading currency is about betting that one currency will either strenghten/weaken against the other currency, but not about owning the said currency.
As for this, not very sure what you meant: " Because with leverage you get to trade up to 4 decimal points for a pair. Meaning when the market is volatile, a little drop in dollar could mean nothing to the world wide currency exchange, but when its against a stronger currency you could lose a lot due to leveraged trading. " Kindly elaborate further pls? |
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Dec 22 2017, 11:43 PM
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To confirm, the price provided by different brokers would be different, correct? Question is, would it differ by much, if compared ?
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Dec 24 2017, 08:25 AM
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QUOTE(watabakiu @ Dec 22 2017, 11:43 PM) To confirm, the price provided by different brokers would be different, correct? Question is, would it differ by much, if compared ? QUOTE(lamode @ Dec 23 2017, 11:45 PM) not really, it should be same among reputable brokers under normal circumstances. This allay my concern. Coz to me, if different brokers get to dictate their own prices, they could see what makes more profits to them.if any diff it would be minimal, few pips at most. E.g. if there are more investor betting against, say, USD to EUR, they can make them lose by indicating that the the USD fares better than EUR. Anyways, what is pips? |
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