Today I wanted to share some thoughts on buying and selling on Forex Market:
When I was in New York, I took the photo with the charging bull and it made me thought about this question, what does the charging bull represent? Why is it a bull and not a bear?
Buying and Selling on Forex Market
Definitely the charging bull is related more to the Stock Market than anything, considering that in this kind of financial market, when we buy a stock, we are talking about an investment, buying and holding, finding strategies to determine how can stocks grow and get the right stocks to build a portfolio…
Therefore, we don’t talk too much about Selling.
For instance, if we take the chart from IBM’s stock and we flip it upside down, you’ll see that it doesn’t look normal, the movements in the price look very different and as a trader you wouldn’t think on investing in that stock.
On the other side, if we take an EURUSD graph and we repeat the same procedure of flipping it upside down, you’ll see that the graph still makes sense from an investment point of view:
Upside-down Flipped Charts:
The Forex Market offers a wider and more diverse perspective on buying and selling, Why?
In the Stock Market, if the stock is going up, it means its price is getting higher and if it goes down, it means its losing value; whereas in the Forex Market it’s two currencies putted up against each other.
Buying and selling on the Forex Market are pretty much identical and if you are not thinking as much in selling as you are thinking about buying, you are limiting your opportunities substantially.
If the currency pair EURUSD is going up, then it means the EUR is getting more value against the USD, but if the currency pair is going down, then it means that the USD is getting more value against the EUR. This fact makes the Forex Market unique and you can benefit by selling as you can do with buying.
In conclusion, if you have been focusing too much in buying, it’s time you consider what I’ve exposed here. In the Forex Market you can obtain profits while you buy or sell, in both actions you are expecting the value of one currency (or financial asset) to rise against another currency and obtain a benefit from that movement.
I hope you’ve enjoyed this post.
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