Experienced traders know that trading forex requires a reasonable degree of familiarity with many other kinds of markets. This is not only because of the role of forex as a medium for international financial transactions, but also because the forex market directly influences price action in stocks, bonds, derivatives and other financial fields. Of all these markets, the stock market’s relationship to online forex trading is especially significant. Beyond the basic relationship of carry pairs with stocks, currencies and stocks are analyzed by the same technical tools, valued by the same fundamental methods, and traded through similar strategies. 

  There are many one-to-one correspondences between the forex and stock markets. The balance sheet of a corporation has its equivalent in the balance of payments, for example. Income from ongoing operations can be compared to the current account balance. Productivity on a national scale is closely related to productivity on the corporate scale. And of course, the similarity of national debt, government bonds, to corporate bonds and debt is obvious to even the least experienced traders.  

  In a sense running a country is not that different from running a corporation. In both cases you need a business strategy that has to  be well-defined, and must be followed strictly. The spectacular success of China in reforming itself as an open market and entrepreneurial society is comparable to the success of Berkshire Hathaway. In both cases well-defined goals and competent management have made unparalleled achievements possible.  

  If you’re a stock trader, the clear correspondences between the management of nations and firms should make your entry into the forex market easy and painless. As a forex trader, you’ll discover that the knowledge gained while studying fundamental analysis will help you greatly while evaluating stocks with potential. Of course, the technical tools used in interpreting the market action are the same for both forex and stocks. Profitability, financial soundness, freedom from debt, are necessary concepts for the analysis of both national and corporate budgets. 

  So what are the points where forex and stock trading differ from each other? Perhaps the most important one is that in forex no asset goes to zero, except in very unusual circumstances. Also, unlike corporations, nations do not go bankrupt, they can extend credit to themselves by printing money, avoiding default on obligations. These are the advantages of forex in comparison to stock trading, because if you don’t leverage your account, the risk of being wiped out is minuscule. On the other hand, oversight over the balance sheets of governments and nations is weak and ineffective, and you can’t take a government to court if it inflates the money supply and depreciates stealthily the assets that you hold.  

  In general, however, running a nation and running a company are similar tasks, as shown, among other things, by the tendency of U.S. Governments to employ Goldman Sachs CEO’s as treasury secretaries in successive administrations. If you can analyze and express an opinion on the management of a company, it will be just a matter of brief reeducation before you can do the same about nations. To learn forex currency trading all that you need to do is mastering this relationship. Afterwards, success is just a matter of perseverance, patience, and determination.