Trading forex is the buying or selling of a currency in order to make money from the appreciation or depreciation of this currency relatively to another one. That’s why in forex trading we use pairs of currencies. The positions that someone can take are the same as in stocks trading, meaning long or short. Technical analysis concepts, risk management, stop loss orders and many trading techniques are also the same and can be found in the section ”technical analysis basics”.
Despite of the many similarities with other asset classes forex market has its own peculiarities and must be studied thoroughly before someone starts trading. There are almost 8-10 well known pairs that market participants most commonly use and in that sense the opportunities are far less than in stocks trading. In the stock markets every different chart (and there are thousands of them) can theoretically provide a unique chance for buying or short selling a stock or ETF.
In forex trading the main concern of a trader should be the fundamentals and the news that affect the price of currencies pairs as well as the application of technical analysis on their price charts.
A main difference of forex market relatively to the stocks market is that it is open 24 hours/day so the possibilities of gaps is minimized and candlesticks patterns that require gaps in order to provide trustworthy signals are rarer to find.
Day or swing trading can also be applied depending on the style and preferences of the individual trader/investor.