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?
To keep things simple, we'll highlight some universal strategies that are suitable for use in both markets.
Strategies Suitable for the Stock Market
First of all, we should discard all options based on the specific characteristics of the currency market. For example, those based on the specific behavior of currency pairs, and when using fundamental analysis, we will use news that influence stock prices:
A news strategy is one of the basic strategies in the stock market, as news has a significant impact on share prices. It is often the primary source of market entry signals.
Most importantly, this strategy operates on the same principles as in Forex trading - http://time-forex.com/strategy/torgovlya-na-novostyakh
Volume-based trading is ideal for the stock market, as it provides real information on transaction volumes and allows for conclusions about the strength of the existing trend.
In most cases, an increase in volume always confirms the existing trend, while a decrease indicates a possible price reversal.
A tool such as the market depth, which displays trades by market participants, is typically used to obtain information here - http://time-forex.com/info/stakan-cen
Overbought and oversold trading - this strategy also works in the stock market. Many traders prefer it for its simplicity combined with effectiveness.
The Stochastic indicator is excellent for determining market conditions . The principles for opening positions are the same, so there's no need to change anything.
Scalping – the trading options included in this group are based on price movement patterns.
There's nothing complicated about using scalping when trading stocks; the only drawback is that brokers rarely offer high leverage for trading securities. Leverage is typically limited to 1:100.
For more information on the strategy itself and the nuances of its application, see the " Scalping "
. Almost all trading options used in Forex based on technical analysis can be used as strategies for the stock market. However, caution should be exercised with advisors; automated trading robots may perform inadequately and lead to losses.
