I am looking at forex and wanted to know if it is similar to stock.?

Question

For instance, can you hold a position like (EUR/USD) i.e. purchase the position and just wait for a month or two before selling it or will this cost you money in the mean time as it goes below where you started. With regular stock you can hold it throug high and low and not get more money pulled out of your account due to a fall in price, but with FOREX it seems risky to hold

Answer 1

Actually the answer is not a straightforward yes. If you are intitiating posititions on leverage, (and you will need to to make your time worthwhile), then you have to pay interest on the loaned amount of currency you are taking as well as the interest rate differentials between the currency in your pair, (if its negative). On short time frames, this is neglible, but it has to be taken into account for long term FX trading.

Answer 2

yes... Forex involves more risk as country risk and currency risk gets involved. But the trading mantra of both are same, that is buying at low and selling at high. Make your investment diversified, calculate risk and plan out your strategies would never leave you in loss.

One main point to be plan out here is deciding the entry and exit points as the holding period in Forex should not be more than 2 months. Because of the risk involved and great volatility.

Answer 3

The answer to your question is yes. You can do more research here at http://www.estocktrades.info to learn more. Good luck!

Answer 4

Hi,

You can hold it as long as you have enough money to cover the leverage. For instance, say you have $1000 in your account and you leveraged the position you're in to a 100k through your broker. This means that once your position drops by 1% you're 1000 is gone since your broker won't hold your position for you.

Of course, if your position went up by 1% you earned a $1000 which is really 100% gain. See the power and risk of leveraging.

Answer 5

yea it is

Answer 6

The problem with holding is that the price is so volitile it may dip below your margin and hit the auto stop loss before it gets back up to new highs.  If you are going to hold you need a HUGE available margin so it has room to breath while on its way up or down the long term trend.

Answer 7

you can check the link for stock vs forex

http://g3infotech.com/category/currency-...

good luck

Answer 8

Hey Check This Site ... They Are Really Good When It Comes To Forex

http://www.forexbrotherhood.net/