Forex vs stock trading

I attended a basic forex workshop over the weekend. The objective of the workshop is to give an overview of forex. The instructor walked through the history of forex and introduced some basic knowledge. There were a few points he actually keep emphasizing.

Key points:
- Forex trading is all about common sense
- History repeat itself

According to him, since the fluctuation of forex is swift and violent. They need to make decision in split second. Trader rely on common sense. When US data not looking good sell US dollar, when oil price hitting new high sell Yen. It is truly fascinating. It is something I never experienced before. No wonder so many people are into forex trading.

I see we can relate this to stock trading also. Trading stock (not investing) also needs a lot of common sense. When a piece of bad news erupted, sell the counter immediately. The first one get the profit. Likewise for good news. The price also move in anticipation. Like stock, price move in advance than the news.

History repeat itself in forex also. Just like stock, we studied a situation and gained some wisdom. When the same situation happens again, we are better equipped to deal with it. The recent sub prime problem is the result of creative financial product. In the future, as more creative product hits the market, we are bounded to see the same thing happen again. But morphed into another form. Whether you would be prepared for it, it depends on individual.