Forex Vs Stocks

[mack3]

my view is there is no real market with any prolonged advantage...

doesnt matter if its commodities stocks forex futures bonds... all markets are still governed and driven by human behavior.

any specific advantage that may appear for the individual is most likely an alignment of personality/style of trading and marketing timing, as opposed to any real advantage provided by the market. if such an advantage did exit between different markets, it would be a basic case of arbitrage and would quickly disappear as people would obviously take advatange. so i say stock traders will say stocks is better to trade, and forex traders will say forex is better to trade... and each for thei own good reasons.

anybody agree?

[BullMarket]

Stocks are great but, they require you to have a lot more money to use effectively and from my experience with them thus far, it seems to take quite a bit of knowledge of economics and business to use them to their fullest potential.

Also I think stocks are a great to get into if you want to own or operate a business, as they give you an insight into the workings of the top, worst and everything in between business out there.


The Foreign exchange, on the other hand, reacts only to forces that effect the economies the currency pairs represent. Your typical forex player is massively over leveraged after all I don’t know too many people that can put up 100K in risk capital for a single position. In theory it should be an easier market as you would only have to predict shifts in major economic forces but, theory and practice are two entirely different creatures.


-Frank

[DT4D]

Originally Posted by mack3

my view is there is no real market with any prolonged advantage...

doesnt matter if its commodities stocks forex futures bonds... all markets are still governed and driven by human behavior.

any specific advantage that may appear for the individual is most likely an alignment of personality/style of trading and marketing timing, as opposed to any real advantage provided by the market. if such an advantage did exit between different markets, it would be a basic case of arbitrage and would quickly disappear as people would obviously take advatange. so i say stock traders will say stocks is better to trade, and forex traders will say forex is better to trade... and each for thei own good reasons.

anybody agree?

I think you're dead on. I much prefer the futures market as it's been very good to me over the years, but what you're saying really makes sense. I know a few people that think I'm nuts for not trading the FX with them but I can't make heads or tails of the damn thing.

J.

[MacDFx]

Originally Posted by cornellj

Hallo MacDFx,

I agree that a major currencypair is unlikely to crash.
...
For me Forex is the safest financial instrument available anywhere.

As long as you're properly leveraged and practicing sound money management, then you should be OK trading forex. Newbies who plunge in head first without bothering to do their homework on the market dynamics of Forex will not fair well in their first year of trading, though. Which is probably why over 90% are losers over the long haul.

[fxjackal]

Hi

There can never be any comparison. Stocks are slow moving in general, and provide adequate returns in bullish trends. However to say, as a seasoned stock trader, I make 40-60% per annum just does not provide any satisfaction. The risks are all to real - bull trend turns to bear trend, in the market for too long - say 3 months on a stock - I personally have a fear for October and November months. Forex does not have these seasonal or micro influences. It trends either way and you can trade it, where stocks are one way - long. I exclude options and warrant type trades.

I do believe one can grow one's personal wealth with stocks, however, there are too many dead days on the local market - where even the most liquid of stocks show little volatility.

Forex, on the other hand, has limitless opportunities, and you decide the time frame that you trade. Financial data and analysis will provide you with little insight into any currency. Forex requires an understanding/interpretation of the currency pairs position relative to the coupled pair.
I have traded stocks for 18 years and cannot see any real comparison. I would however state that one can occupy a position on stocks or forex and provided your entry was reasonable, one could make profit on either, provided that you are prepared to float out the negative situation long enough. The market would normally return to the middle ground at some time or another.

[PipCrawler]

I know this thread is about forex vs. stocks, but I've been trading forex and stock options and i'd like to post here what i see as the pro's and cons of both as they apply to the beginning trader:

Forex: Low start up cost, liquidity, response to technical analysis(most importantly support and resistance), make forex more attractive to a new trader wanting to jump into the world of trading, especially those who want to do intraday positions. Longer term positions however are not favorable to the new trader because of the high leverage, unless they have large amounts of cash reserves. Also, the forex are much more volatile which can be very dangerous to the novice trader.

Stock and Equity Options: I like options because you can build directional and non-directional, short term and long term positions with controlled risk. Requires more start up capital, and getting filled at the prices you want aren't always the case like in the forex market. Also, the learning curve with options is higher because i think it's very important for a trader to have a full understanding of the "greeks" along with fundamental and technical analysis before they start trading.

with that said my preference is the forex for short term trading(intraday to a day hold time) and stock and equity options for longer term(1 month to 3 month hold time). Hope this helps...

[buff]

Some interesting thoughts on Forex v Stocks here. As one poster stated, it is how the trader him/herself actually percieves the advantages/disadvantages of either style of trading.
I myself started with Futures as I always thought Stocks to be boring and not enough bang for my buck. Didn't do too bad, considering my level of experience, but looking back, I'm surprised I survived so long with the way I was going about things. Also had a go at Options, but that didn't last long at all, as they are a beast you really have to understand fully before taking the plunge.
Then I heard about Forex and thought all my dreams had come true. I noticed all the good stuff like 24hr market (no gaps), huge liquidity, fewer markets to follow (4 majors) and nice trending markets with huge ranges where you can trade off 5 min or daily charts etc etc etc. All looks good and appears to be the perfect market. Traded this for a couple of years part time and then gave it a go for a year fulltime. I can tell you, I learnt plenty about myself in that year and I also found Forex a lot harder to trade than it appears. I am now back at work (to reduce my wife's stress levels) and I am still trading Forex part time.

I also trade Stocks to manage my own retirement fund, and I am a lot more profitable with these than Forex at the moment. Maybe something to do with the nice bull run at the moment. But having said that, I am pretty confident with my Stock selection, that I am going to be trading CFDs (Contracts for Difference) in the very near future. These are a leveraged instrument that allows you to short also, and with online trading these days, brokerage fees are minimal. Sure you have a larger number of Stocks to analyse but as I use software to do this, it doesn't take that long at all.

I guess what I am saying, is don't be caught up in all the hype of Forex. I was, but after experiencing both the highs and the lows, my opinion has changed somewhat. I'm not saying a good trader can't make money out of Forex, all I am saying is, it is not as easy as it looks or other people make it out to be. Greed is the enemy, followed closely by poor money management. That's my ramblings done for now. Cheers and good luck.

[TRYFX]

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