Thread: Forex Vs Stocks
View Single Post
Old 29-01-2006, 18:33   #27
echelon4x
level 1
 
Join Date: Jan 2006
Posts: 43
Downloads: 0
Uploads: 0
Rep Power: 3echelon4x is on a distinguished road
Re: Forex Vs Stocks

I've traded stocks a lot in the past both large and small co's through trading on a broker account t+10, t+20 etc. and via CFD's. I still have some as longer term investments, though steer well clear of them now for trading because they can be very unpredictable in comparison to FX trading.

For techincal analysts the FX market is a dream come true - for anyone else it can be a nightmare. If you don't pay attention to and understand global economics in depth and keep up with the news, then you're likely to come a cropper if you try to trade with scant knowledge of fundamentals.

You can get by in stocks and make a lot of money with the flimsiest of fundamental knowledge - particularly if you catch wind of it before anyone else. For technical analysts, stocks can be nightmare because sudden news (which nobody caught wind of - e.g. board level scandal, major contracts won/lost, lower/higher than average sales etc.) can throw out the most perfectly drawn out fib retracement levels, pivot points, head and shoulders formations etc.

You can make a lot of money trading smaller companies in stocks though need to be very careful of broker spreads and liquidity and liquidity is something which has never been a problem in the FX markets. Of course smaller companies have more risk, so you typically get one huge winner and a few small losses.

Horses for courses I would say - if your trading skills lean towards TA then go for Forex, if your skills lean to Fundies go for stocks. TA can be used for stocks, though it's wisest to stick with the blue chips which move in predictable cycles - some are ridiculously predictable and move depending on whether the sector they're in is "in vogue" at the current time or not - however it can be a slow process and you may find it trickier to get the sort of leverage that you can get in Forex.
echelon4x is offline   Reply With Quote