Do forex strategies work for trading the stock market?
It so happened that brokerage companies began to present their services in the post-Soviet space with Forex trading.
Perhaps this is explained by the fact that our citizens at that time were already familiar with the foreign exchange market, but trading in shares seemed something far from reality.
The first assets available for trading on trading platforms were currency pairs, only a few years later company shares appeared.
For these reasons, most of the strategies that can now be found in the public domain are designed specifically for Forex trading; you will have to try very hard to find something exclusively for the stock market.
Therefore, many users have a question: How universal are the described trading methods for Forex and will they work as strategies for trading on the stock market?
In order not to complicate the explanation, we will highlight universal strategies suitable for use in both markets.
Strategists Suitable for the Stock Market
First of all, you should put aside all options based on the specific features of the foreign exchange market. For example, based on the specific behavior of currency pairs, and when using fundamental analysis, news that affects the stock price will be used:
The news strategy is one of the basic ones on the stock exchange; news has a significant impact on the price of shares.
This is often the main source of signals for entering the market. The most important thing is that this strategy with securities works on the same principles as on Forex - http://time-forex.com/strategy/torgovlya-na-novostyakh
On volumes - it’s perfect for the stock market, because here you can get real information on transaction volumes and draw conclusions about the strength of the existing trend.
In fact, in most cases, an increase in volumes always confirms the existing trend and, conversely, a decrease indicates a possible price reversal.
As a rule, to obtain information, a tool such as depth of market is used, which shows transactions of market participants - http://time-forex.com/info/stakan-cen
Overbought and oversold - this strategy also works in the stock market.
Many traders love it for its simplicity combined with efficiency. The Stochastic indicator is perfect for determining the state of the market .
The principles for opening positions are the same, so there is no need to change anything. Scalping – trading options included in this group are based on patterns of price movement.
There is nothing complicated in using scalping when trading stocks; the only trouble is that brokers rarely provide large leverage for trading securities.
Typically the leverage size is limited to 1:100. Read about the strategy itself and the nuances of its application in the “ Scalping ”
. Almost all trading options used in Forex based on technical analysis can be used as strategies for the stock market.
But you need to be careful with advisors; automated trading robots may not work adequately and lead to losses.