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Why Learn Forex Trading When My Stocks Are Booming?
Education | 04 September 2009
By:

You would probably be living under a rock, if you have not heard or seen the recent stock market rally. The market has recovered to the point that 2009 might even be a profitable year for some long term investors! Naturally, there are cautious voices recommending restraint and others saying it is time to buy, buy, buy. Whichever group you belong to, the common consensus is that any long term purchase in quality stock is a guaranteed profit. However, let me show you how forex trading can add more dimensions of profit and safety to your booming stock portfolio!

1. All Stocks Will Have A Correction One Day
In all investing, market participants are prepared for corrections in the stock market. However, those investors who are gung-ho and less savvy tend to short the stock markets in the same manner they would long the stock. This is a mistake because stock prices can be assessed by value, but it is very hard to accurately assess the negative value of a stock until it is too late. That is why many stocks seem stable even after bad news and then collapse very violently.
On the contrary, the Forex markets can be evaluated in the same manner throughout an up, down or sideways market. This will give you more opportunities to trade.

2. Commodities Are Booming Too!
The oil and metals markets have been quietly rising unbeknownst to many stock investors. When these commodities move, the Aussie dollar, Canadian dollar and Yen pairs tend to move in tandem. You would have been able to make extra profits from these moves.

3. Your Introduction To The Global World
Many local investors fear investing in foreign instruments, however, this is becoming a more and more difficult to avoid. Our local corporations are now expanding overseas, and this leads to foreign currency and asset exposure. They are also affected by events that occur globally. A recession panic in the UK can directly affect a local company, if it sells mainly to the UK. This is unlike 20 years ago where investors could invest solely on companies that operated locally.

It is now imperative for you to have a global outlook even when you are buying local stocks so that you can use these inequalities to your advantage. Forex trading keeps you constantly in touch with the major trade channels that influence global wealth, and you can use that to give you an advantage in your stock acquisition process.

4. A Consistent Skill Through Market Cycles
The Forex markets have constant money flow transactions almost 49 weeks a year, after taking away the Easter and year-end holidays. This smooth movement of the market gives you many opportunities to consistently trade. It brings stability to your stream of investment returns.

5. Give Your Stocks Time To Breathe
Last, but definitely not least, you should learn forex trading to occupy your evenings when you feel like trading but your stocks are not moving! Good stocks can be kept for months and years, however, it takes a lot of patience on the part of the investor to not look at it. I constantly see people irrationally selling and buying stocks because they have made a bit of money and want to buy the next hottest stock. You should give your stocks time to run the whole rally, because the patience will pay off very well.

In the mean time, you can trade the Forex intra-day markets as they ebb up and down daily!

Profile:
Winston Ng, CEO, Forex Driving School. They conduct Singapore’s only structured 8-week Forex Mastery course that combines knowledge with a guided process through live currency market scenarios. Beginner to advance traders attest to their amazing education process through the flood of testimonials and referrals to their sell-out monthly courses.


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The Shares Investment editorial team welcomes constructive feedback on our coverage and content. We would also be delighted to answer any questions on the above article. Leave us a comment below, and we'll get back to you shortly!

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