Are some markets more profitable (or less risky) to trade than others?

[dbell66]

Are some markets more profitable (or less risky) to trade than others?

I’m guessing if there are, then they draw in more competition, which evens things out again, but I’m curious to know why some traders specialise in (choose) certain markets over others. Is it for the business opportunity, less risk, analytical challenge or others….

All things being equal, is a trader likely to be safer trading, say, FX rather than bonds, indexes, commodities etc. And would it depend on the style or frequency (turnover) of trades?

For example, if I wanted to go into the retail business with a choice to sell something like furniture at a higher margin but lower turnover or sell groceries at lower margin but higher turnover.

In this (simplistic) case I’d probably choose groceries as a more stable cash flow producer and ‘in demand’ product.

Just wondering how some traders choose…………..

Thanks

 

[sKaLpZ]

some of it probably depends on the size of your account.

Over a million, you know, you should consider seeking professional portfolio advice.

Under, what is it now, $50,000? then stocks are definitely not the way to go because getting popped every trade (open then close) for a commission fee will eat your account to the bone.

Plus can you even short unless you have X-amount of money in your account? Then there all the stupid trading rules.

We have none on that in the forex.

I tried stocks when I first traded many years ago and got bagged after 3 months. Of course, then it was SO stacked in the MMs favor it was pathetic.

I felt like my broker was completely in kahoots with the MMs signaling every move I had going, etc., - They fed me to the MMs.

Once I got my account up there some it was murder - my own broker traded against me until I was dead in the water (just a theory) mainly due to them not processing my orders until the price had already moved drastically against me.

Not like that in forex - my broker... one click and the trade is done instantly - 10-times the liquidity in forex.

2 years ago I clicked on a 'forex' link off the net, and after 2 years I am still here - still learning - still progressing, that is a good thing though.

With forex there is no commission fee. When you open a trade the broker takes the spread (sometimes as little as a single point, but when you close the trade no additional fees are taken - I think it is a good deal, maybe a great deal as far as different markets are concerned.

Also, with forex you can size a trade down to as little as 100th of a penny per point.

Try that with any other instrument - even e-minis.

Makes your live trading risk virtually ziltch - you can trade for 50 years on a $100 account.

And the demos are real time and free so you can learn at your own pace risking no money of your own indefinitely.

Actually, since I have developed some systems in forex I started trading stocks again just for the fun of it with the forex trading systems I have (stock demos) and was destroying the stock markets like they weren't even there!

Except I found the limiting factor of not being able to short so many stocks at different times totally ludicris.

In forex you can short anything any time.

fx

 

[hoodooman]

Interesting post. What forex broker do you recommend?

 

[Hydroblunt]

Quote from dbell66:

Think of it this way. In 1998-2000, do you think you should have been trading, let's say, the DAX, the Nikkei or the Nasdaq. Hope it takes you less than a second to figure it out.

 

[Remiraz]

Quote from sKaLpZ:


Not like that in forex - my broker... one click and the trade is done instantly - 10-times the liquidity in forex.

You got to be kidding. 10 times the liquidity in FX? Yeah, because u're trading directly vs the MM! FX has 1 trillion liquidity but us retails are getting $0 of that since we can't access the interbank market!

Quote from sKaLpZ:


With forex there is no commission fee. When you open a trade the broker takes the spread (sometimes as little as a single point, but when you close the trade no additional fees are taken - I think it is a good deal, maybe a great deal as far as different markets are concerned.

No commission fee my nazukuu*. The additional fees are added onto the spread. Why else do you think FX Futures are 1 pip spread and bucketshops are 1.5-3pips for the Euro?


*pie

Quote from sKaLpZ:


Also, with forex you can size a trade down to as little as 100th of a penny per point.

Try that with any other instrument - even e-minis.

Makes your live trading risk virtually ziltch - you can trade for 50 years on a $100 account.

You can only scale down freely for two bucketshops.

Quote from sKaLpZ:


And the demos are real time and free so you can learn at your own pace risking no money of your own indefinitely.

So is paper trading with a pen and a piece of paper in any other market.

Quote from sKaLpZ:


Except I found the limiting factor of not being able to short so many stocks at different times totally ludicris.

In forex you can short anything any time.

fx

same for futures

 

[Remiraz]

Quote from dbell66:

Are some markets more profitable (or less risky) to trade than others?

I’m guessing if there are, then they draw in more competition, which evens things out again, but I’m curious to know why some traders specialise in (choose) certain markets over others. Is it for the business opportunity, less risk, analytical challenge or others….

All things being equal, is a trader likely to be safer trading, say, FX rather than bonds, indexes, commodities etc. And would it depend on the style or frequency (turnover) of trades?

For example, if I wanted to go into the retail business with a choice to sell something like furniture at a higher margin but lower turnover or sell groceries at lower margin but higher turnover.

In this (simplistic) case I’d probably choose groceries as a more stable cash flow producer and ‘in demand’ product.

Just wondering how some traders choose…………..

Thanks

If you stick to regulated exchanges, they're all the same.

FX is interesting because u can go for targets of 50 ticks with 50 ticks stops. This is important because of the negative edge the spread has on smaller target trades.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=53586

 

[buylo]

Quote from dbell66:

Are some markets more profitable (or less risky) to trade than others?

I’m guessing if there are, then they draw in more competition, which evens things out again, but I’m curious to know why some traders specialise in (choose) certain markets over others. Is it for the business opportunity, less risk, analytical challenge or others….

All things being equal, is a trader likely to be safer trading, say, FX rather than bonds, indexes, commodities etc. And would it depend on the style or frequency (turnover) of trades?

For example, if I wanted to go into the retail business with a choice to sell something like furniture at a higher margin but lower turnover or sell groceries at lower margin but higher turnover.

In this (simplistic) case I’d probably choose groceries as a more stable cash flow producer and ‘in demand’ product.

Just wondering how some traders choose…………..

Thanks

Yeah, don't trade oil on ICE exchange because it goes down every 30 minutes.

 

[SteveD]

For a small guy to trade anything other than equities is going against the largest, fastest, smartest and most heavily capitalized firms in the world.

Exactly what do you think your chance of success is going to be??

The small guy can make money trading stocks because that is where the inefficiencies are located. Nice consistent profits.

Anything else is just pure gambling. Go buy a lottery ticket or go to Vegas and get free drinks and nice cleavage while you gamble.

Just my opinion,


SteveD

 

[sKaLpZ]

Quote from SteveD:

For a small guy to trade anything other than equities is going against the largest, fastest, smartest and most heavily capitalized firms in the world.

Exactly what do you think your chance of success is going to be??

The small guy can make money trading stocks because that is where the inefficiencies are located. Nice consistent profits.

Anything else is just pure gambling. Go buy a lottery ticket or go to Vegas and get free drinks and nice cleavage while you gamble.

Just my opinion,


SteveD

"For a small guy to trade anything other than equities is going against the largest, fastest, smartest and most heavily capitalized firms in the world.

"Exactly what do you think your chance of success is going to be??"

I'll answer that.

Chances of success are very good.

Why?

Because market law is: The bigger the money (and money managers) the dumber, not the smarter.

Trading global currencies in the forex for 2 years, I go up against the "biggest" in the world all the time and I always make money.

That's a fact. And I'm a high school drop out.

Big, clumsy moves of big money and rich money managing firms are easy to figure out because rich = dumb.

That's the way it's always been - that's the way it will always be.

However, enjoying "nice cleavage" is a blast!

fx

 

[Remiraz]

Quote from sKaLpZ:
Because market law is: The bigger the money (and money managers) the dumber, not the smarter.

Trading global currencies in the forex for 2 years, I go up against the "biggest" in the world all the time and I always make money.

That's a fact. And I'm a high school drop out.

Maybe because u're a high school drop out you have no idea that when trading FX thru a bucketshop you're going up against the bucket + other clients and NOT the "biggest" in the world.

Quote from sKaLpZ:
I'll answer that.

Chances of success are very good.

82% of traders fail to make money according to a recent tally with on the Taiwan Stock Exchange.

18% chance to succeed is "very good" indeed! :eek: