Forex Vs Stocks

[ForexTraderMan]

its pretty simple.Forex is a lot more risky and as someone said earlier- in order for one person to be successful, another one has to be unsuccessful. But, at the same time, if you are successful, you can make a lot more money in a much shorter period of time. So I guess everyone will have their preferences.

[clockwork71]

Wow, spot forex is so volatile that I don't even recommend it to new clients anymore. I had a guy who started with our firm about 5 to 6 months ago. He opened a spot forex account for self trade. He started with $90,000 USD. He lost $70,000 with only 2 positions in about a week. This happend during the infamous Thursday of the chinese yuan-revaluation last year. That day saw moves in the yen of about 200 to 300 pips in a matter of seconds. Ofcourse he was on the wrong side. This guy is a computer programmer and mechanical technician...and he was crushed.


He was slipped over 150 pips on each trade. Yes...any firm that says they guarantee slippage is full of it. Forex firms will only guarantee slippage in a normal market....not fast markets. "Read the fine print."


Well, as a FOREX trader, I can tell you what he did wrong.

He was using WAY TOO MUCH of his capitol in those two trades. Period. Bad money management will get you killed in FOREX. (And any other market I assume.)

He should have NEVER been able to lose like that. If he hadn't tried to make a million dollars in his first week, he would have survived it.

And as far as a 150 pip slip, I have never seen that.

And yes, I was trading that day.....and did quite well.

I would have loved to be risking 70k, since I was right, but I would never do that....just common sense if you only have 90k to begin with.

A simple stop loss and a call to his broker SHOULD have cleared that up. If not, then it is still his fault for gambling (yes he was gambling) that much. He has nobody but himself to blame.

As far as the rest, I don't tradr stocks, but certainly will in the future, as I believe in multiple streams of income.

[ForexTraderMan]

Ya but as you said he lost so much mainly because he risked more than 2/3rd of his capital on two trades. thats not particularly wise. although forex could be risky if you are smart at money management then it shouldn't be too much of a problem.

[stevie_g]

I agree wid traderman.... Stocks r way better and provide lot less risk... Ppl shud go for dat only..

[marieange]

Stock markets are more predictable – they are often trending (eg. going up from October till May), while FX is more unpredictable and often sideways.
That is one additional reason why it's easier (and less risky) for a novice trader to trade stocks than FX.
Some say that FX is a huge sideways market in which only with leverage low enough and equity large enough a trader can trade profitably.

[ampris2000]

the leverage and equity has nothing to do with a persons success rate.

it's more so their money management and proper chart analysis. fx isn't a huge sideways market. it depends on the chart analysis. such as why did the aud / usd have a big move up when it was going down on the daily chart ? because it is in an uptrend on the monthly chart and hit a support point. that's not hard is it? but many people try to day trade and don't analyze all the chart info properly.

eur/gbp is in a triangle on the monthly. that's why it's so jerky, but whenever it breaks out, this is the opportunity for some huge money. not only because the move will be big, but eur/gbp doubles your pip value.

[saltcreep]

Im a newbie and have been researching Forex for a couple of months now and so far every positive insight that people are saying about forex here is what Iv'e been comming across as well.

Since im learning about stocks lately so far im finding it easier to understand the mechanics than forex mechanics "Technical Analysis". FA is much easier to grasp.

Lately someone has turned me on to Micro-cap stocks "Penny Stocks". So far it looks much more rewarding in a shorter period of time with less start up capital. What are your guys take on Micros compared to Forex?

Please correct me if any ofthe above is incorrect.

thanks

[EliteJ]

Penny stocks are very erratic and have no conceivable patterns that can be used for analysis. They are pure hype driven which is why people like me and probably you get things in the mail or email talking about the next big Microsoft because they want to hype up a stock to make a quick buck. Of course after it moves up they dump it on the retail investors who end up losing their money to these con artists so to speak. Its extremely difficult to be consistent with Micro-caps unless you have insider information which would be illegal or you're one of these guys hyping up the stock. So there you have it. Stick with forex or more predictable stocks. Just MHO