Difference between forex and stocks trading to take note?

[Esha.J]

High volume means traders can typically get their orders executed more easily and closer to the prices they want. Forex major pairs typically have extremely low spreads and transactions costs when compared to stocks and this is one of the major advantages of trading the Forex market versus trading the stock market.

 

[DevBru]

High volume means traders can typically get their orders executed more easily and closer to the prices they want. Forex major pairs typically have extremely low spreads and transactions costs when compared to stocks and this is one of the major advantages of trading the Forex market versus trading the stock market.

Really? A lot of active traded stocks with very high volume have 1 cent spreads and a lot of brokers are offering no commission.

 

[kroxobor]

Dear Forex elite traders,

I would like to pose a question to the elite traders here who have a consistent profitable track record in both stocks and forex. I have experience with stocks and little experience with forex. My experience with forex is mainly that of losing money.

What is the difference to take note between trading stocks and forex? Are there certain chart behavior that is different between stocks and forex?

A few differences I can think of between stocks and forex;
- many stocks to choose from. Much fewer forex pairs to trade
- stocks fundamentals are easier to analyze. For forex, there are no financial statements to analyze. THere are too many movable parts in an economy that can drive a currency and that makes forex fundamentals unanalyzable, for me.
- forex percentage movement is small compared to stocks
- lesser gaps with forex

What advice would you give to someone who is a loser in forex but not totally an amateur because he has some positive experience with stocks?

Probability density of stock returns is skewed to right (positive kurtosis). I think stock market growth expectations determine that. As far as I know it is not observed in currency pair returns because there are no such expectations. Does it mean that Fx trading is more random?

 

[Coner1980]

I have tried both but I think forex is better then stocks, because Forex is easier to enter because many brokers do not ask for a minimum deposit and also you do not have to pay commission on every trade.

 

[Codrin]

I have tried both but I think forex is better then stocks, because Forex is easier to enter because many brokers do not ask for a minimum deposit and also you do not have to pay commission on every trade.

Even i prefer the same. Forex over stocks.

 

[DevBru]

I have tried both but I think forex is better then stocks, because Forex is easier to enter because many brokers do not ask for a minimum deposit and also you do not have to pay commission on every trade.

I wonder how many of those tiny few $100 accounts actually survive, probably not longer than a few weeks.

I think those minimum deposits are a good thing, they take away the illusion that one should trade with such tiny accounts.

 

[kroxobor]

I wonder how many of those tiny few $100 accounts actually survive, probably not longer than a few weeks.

I think those minimum deposits are a good thing, they take away the illusion that one should trade with such tiny accounts.

At the end of the day, leverage, profit goals and risk per trade determines survival. Even $100 can last long but I agree a few would like to grow account by 1-2 USD, it a waste of time.

 

[Trader H.C.]

They have different market behavior, which requires a totally different strategy to trade.

 

[kroxobor]

They have different market behavior, which requires a totally different strategy to trade.

What do you mean under market behaviour? Stocks and currencies are assets not market players and I really don't see differences in price movements on low and medium-timeframes. But I would say that stocks are more prone to growth because diminishing returns and hunt for yield is a macro theme that dominates. Sharp changes in currency exchange rate can prompt central bank interventions and traders are aware of that since it is a trade opportunity.

 

[Trader H.C.]

What do you mean under market behaviour? Stocks and currencies are assets not market players and I really don't see differences in price movements on low and medium-timeframes. But I would say that stocks are more prone to growth because diminishing returns and hunt for yield is a macro theme that dominates. Sharp changes in currency exchange rate can prompt central bank interventions and traders are aware of that since it is a trade opportunity.

What are your low and medium-timeframes? I'm talking about H4 and Daily here.