I have a group of friends who recently lost some money in stocks markets. (Ok, let’s blame the market, if it makes you feel better.) To my surprise, they are rushing into currency trading now, and heck, live accounts. I can see the fire on their head. “I am going to make a killing in Forex market”.
They are my friends. So, I don’t wanna be the one to discourage them. (You know, I am such a kind man. :o: ) If, by chance, they read my blog, I hope this post shows them some light.
My question to them, or you , if you are in the similar situation. What makes you think that you lost money in stocks market but you are able to earn from currency trading?
Which is the root cause of the loss? The market? or the trader?
Think. Keep the answer to yourself, not me. Simply because….I don’t care.
I as forex trader believe that forex are harder than trading stocks. When you trade stocks you can chose which setup do you want to take and find ideal stocks for that setup. In forex everything is moving similarly so it’s like you trade just one pair of currencies. Than you don’t have the ability, unless you are extremely patient, to wait for particular setup. You got to trade what’s on the table and not be to picky. Spreads are big part of equation. It would be better for them to try YM or stick to stock market. Finally if you are not so disciplined you tend to exploit big leverage when losing, it can save you few times, but then it can just wipe you off.
Just my two cents.
I disagree that Forex is harder than stocks. In my opinion it’s easier: trends are more stable, swings more harmonic, hardly any volume dryouts, less stoploss hunting, almost liquidity at any price level time of the day, no market gaps (only weekends and news), less market manipulation, no surprise “CEO is caught sleeping with a sheep” news bullet, etc etc.
Just my opinion.
-HECTOR-
The recent big gaps down in the equity mkt sure made me thankful for being in fx. Mkt manipulation is a big problem though, as countries with non-floating currencies and large fx reserves distort the fx markets across the board. The biggest problem is the lack of significant drift, which puts us at a disadvantage to the ‘get long, stay long’ equity crowd.
I as forex trader believe that forex are harder than trading stocks. When you trade stocks you can chose which setup do you want to take and find ideal stocks for that setup. In forex everything is moving similarly so it’s like you trade just one pair of currencies. Than you don’t have the ability, unless you are extremely patient, to wait for particular setup. You got to trade what’s on the table and not be to picky. Spreads are big part of equation. It would be better for them to try YM or stick to stock market. Finally if you are not so disciplined you tend to exploit big leverage when losing, it can save you few times, but then it can just wipe you off.
Just my two cents.
I disagree that Forex is harder than stocks. In my opinion it’s easier: trends are more stable, swings more harmonic, hardly any volume dryouts, less stoploss hunting, almost liquidity at any price level time of the day, no market gaps (only weekends and news), less market manipulation, no surprise “CEO is caught sleeping with a sheep” news bullet, etc etc.
Just my opinion.
-HECTOR-
The recent big gaps down in the equity mkt sure made me thankful for being in fx. Mkt manipulation is a big problem though, as countries with non-floating currencies and large fx reserves distort the fx markets across the board. The biggest problem is the lack of significant drift, which puts us at a disadvantage to the ‘get long, stay long’ equity crowd.
Hi BK,
How’s everything in Australia? Hope everything is well and see you back in sg soon.
Anyway, market is never wrong. only the traders are.
Yo bro,
How’s it going? Things are good in Australia. Except, I didn’t realize Chinese New Year is just days away….
I might make a trip to Singapore after CNY.
Cheers, and Happy New Year.
Hi BK,
How’s everything in Australia? Hope everything is well and see you back in sg soon.
Anyway, market is never wrong. only the traders are.
Yo bro,
How’s it going? Things are good in Australia. Except, I didn’t realize Chinese New Year is just days away….
I might make a trip to Singapore after CNY.
Cheers, and Happy New Year.
Oh no, to make a killing in any market you generally have to risk being killed yourself, whether you know it or not, unless you set up a brokerage of course!
Oh no, to make a killing in any market you generally have to risk being killed yourself, whether you know it or not, unless you set up a brokerage of course!
Whether they will be more or less successful in currencies depends on the individual trader. Who is to say one or more of them won’t be successful right out of the gate? They will never know until they try.
Maybe.And hopefully they will be successful right out of the gate.
But, the reason of switching to currency trading is “I lost money in stocks”. I hope this mindset is strong enough to put them through the highs and lows in currency trading as well. 😀
Whether they will be more or less successful in currencies depends on the individual trader. Who is to say one or more of them won’t be successful right out of the gate? They will never know until they try.
Maybe.And hopefully they will be successful right out of the gate.
But, the reason of switching to currency trading is “I lost money in stocks”. I hope this mindset is strong enough to put them through the highs and lows in currency trading as well. 😀
If they manage their money well, it will either be a steady climb or a steady fall either way…now on the other hand, if they want to play roulette, then GAME ON MAN! They can blow their accounts just as quickly.
All in all, I agree with Hector on some points — but do not necessarily think it is inherently easier to trade FX.
I wish your friends good luck. We could all use a little, methinks.
If they manage their money well, it will either be a steady climb or a steady fall either way…now on the other hand, if they want to play roulette, then GAME ON MAN! They can blow their accounts just as quickly.
All in all, I agree with Hector on some points — but do not necessarily think it is inherently easier to trade FX.
I wish your friends good luck. We could all use a little, methinks.
No need to think, such a simple question……
No need to think, such a simple question……
gav: the 50:1 leverage should only help them with their brilliant analysis
gav: the 50:1 leverage should only help them with their brilliant analysis