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[mysteri]

hey all,

this is my first post here so hopefully this topic has not been discussed yet(maybe someone can refer me to the thread if so). i have an older friend(i'm 22 y.o.) who's been trading stocks successfully for years and basically day-trades in his "retired" years(he's about 70+ y.o.). i'd say he likely averages along the lines of $300-500 daily, but he obviously has a lot more capital than most people. anyway, as much as he enjoys stocks, we were thinking that FX might be a bit less complicated(?) and i suppose for him he may be trying to diversify his portfolio.

in any case, i won't be hearing from him for another few weeks while he's on vacation, but i'm curious of how difficult the transition may be from stocks to forex? i ask b/c he seems to do pretty well so i'm wondering if there are many surprises i should be aware of that may be good or bad? i'd like to ideally transition out of my little $300/week retail job and into the FX permanently one day. i appreciate all of the sound advice about opening demo accounts(which i have), patience, persistence and gaining experience. i figure that at 22 y.o. and no family of my own to tend to(heck, still live @ home lol), i have nothing but time to develop something like this. i would be simply thrilled if i could even eventually replace my current salary and work from home, but all in due time and another thread. thank you all in advance for sharing your advice and experiences.(even the discouraging horror stories lol )

[Gamma_Jammer]

There are three massive differences between trading stocks and trading forex. Most of the smaller nuances stem from these.

1) FX is not an exchange traded market (unless you trade futures). The big banks make prices between themselves (both to speculate and facilitate the liquidity necessary to continually quote prices for their customers) and that basically dictates what the rest of the market does (including the retail market).

2) It's effectively a 24 hour market. When trading closes in the far East, Europe is opening. New York arrive at their desks while we are grabbing our lunch here in blighty, and are there after we are gone in the evening. Sydney and Wellington show up early evening London time, and NY will hand over to Singapore and Tokyo at the end of their day. Market closes at 1700 EST Frida and re-opens Sunday (for most of the world) which is Monday morning in Welly / Sydney.

3) FX trading activity is often not purely 'speculative'. It's often the by-product of other activity (commercial, other investment etc etc). As such, the market psychology is often subtly different.

What you have to do for yourself is work out where these differences fit into your existing methods / strategy. But these basics should give you a pointer. And sound trading / money management technique should always win through in the end.

Good luck

GJ

[mysteri]

hey gj,

thanx for the good information. my partner is the one w/ the experience, but we would be embarking on the forex world together. i'm honestly not yet too familiar w/ his trading style(s), so i'm not quite sure how that would effect our trading yet. it would seem self-evident i suppose that he seems to possess relatively sounds money-management skills. he doesn't seem to get emotional about the results of his trades, so that's big to me. having had my many years of anguish w/ other "systems" that i didn't follow through on, i like this one cuz it's the least maintence and interaction w/ people(try retail and restaurants if u like people). since i don't have much start-up capital, i'll kinda by piggy-backing my partner attempting to let capital build in this manner. i just wasn't sure what to be aware of, but now i have a better idea. thanx again.

[Gamma_Jammer]

Originally Posted by mysteri

hey gj,

thanx for the good information. .

No problem at all - happy to help where I can. The fact that your partner doesn't get too emotional about trades is huge in the context of forex trading - prices move very fast and you WILL have losers as well as winners. If you let that chew you up you may as well just hand the cheque to your booky now.

So you already have a head start on many traders. And you're happy to ask sensible questions, so that's another plus.

Study as much as you can, don't be afraid to make a few mistakes, and have some fun (obviously without getting too carried away when you win OR lose).

Best of luck

GJ

[mahras]

Something that most traders overlook:

IN fx you dont have bull or bear market. This doesnt JUST mean you can easily go long and short. It is inherent in the price action. In stocks when the price falls it tends to have fast rides down and then quick and sharp retracements. In FX this isnt the case. The dynamic nature of the market make price action going up almost the same as price action going down. This is because when one currency is depreciating the other currency is appreciating creating an environment where ups and downs have the same market characteristics.

[mysteri]

hey mahras,

that's a good note. that's somethin that actually dawned on me last night which basically means to me that from the moment the market opens to when it closes there is ALWAYS potential to profit. that seems to be a rather unique feature of FX.

[Gamma_Jammer]

Originally Posted by mysteri

hey mahras,

that's a good note. that's somethin that actually dawned on me last night which basically means to me that from the moment the market opens to when it closes there is ALWAYS potential to profit. that seems to be a rather unique feature of FX.

Well nowadays thanks to single stock futures, CFDs etc etc you can profit as easily from down moves as up moves in pretty much all instruments. But many of these instruments are still dominated by what happens in the relevant cash market (especially stocks). So what Mahras said was right - the price action in stocks looks different on the way down to the way it looks on the way up. In FX this is much less of an issue.

[zynetic]

I'm working in the securities field ruight now and just started learning about FX a month ago.I think that In some way FX could be less complicated compare to some situation of stock market.With good preparation and money management you might find the outcome profit grater than you can expect. Before I learn about FX I knew one guy who was doing quite well in this market but he died last year so I'm trying to study by myself right now

[zynetic]

I think the successful trader would need to be very confident in what he/she is doing and also if you have the basic knowledge from stock market,I think that is a plus for the start.