Difference between forex and stocks trading to take note?

[Kodakoto]

The choice between Forex or stocks largely depends on individual style and preferences.

 

[Alan Salih]

Forex market is the most difficult market to trade because of:

1) lack of volatility.
2) lack of directional movement.
3) institutions will not take any view on the market only they use it to hedge the currency risk.
4) Since the market don't move that much any position you take there is high probability that your SL will be taken.

>> This why most of CFD brokers promote FOREX to much because your lose are their gain and in FOREX there are a huge probability that you will lose money.

And IBs promoting FOREX and educating people about it because they are not making money in trading it and brokers give them a huge amount of percentage gain, and teach the people how to scaple because they make more out of the commission.

 

[Axesinger]

A clear understanding and separation of such concepts really succeeded in more knowledge and opportunities.

 

[Raheel Shaikh]

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?

Hey man i have been trading consistently for over 2 years now
there are a lot of things that you mentioned which aren't true
ill just point them out
- There are mainly 32 pairs that are traded widely out of which the top pairs are EUR, GBP and JPY
- Technical analysis are better on forex compared to forex as the the market moves 24hours a day and there are lesser gap, fundaments are driven by news and other big events
- forex has 3 trillion$ turnover on an daily average
- yes the gaps are definitely less and price follows mechanicals well

An Advice that i could give you is
80% psychology
10% Risk management
10% Trade plan
follow this and you're ready to rock forex

 

[Ahmed Solaiman]

Have traded both at same time for years. No longer trade forex, not because it is not profitable but there is to much to stay on top of around the clock. I really did enjoy trading it.

Just to much to stay on top of both markets, so I choose equities, I also like to sleep at night. Its easier to turn off equities after the market closes and have a life, but forex never sleeps, and your mind never leaves it, even when your away from the screen.

If you do trade forex, only trade one or two different pairs until you learn the beast. Prepare for long periods of low volatility, interrupted by sometimes huge moves .
Most indicators, technical patterns you can throw in the trash. Avoid all gurus.

Good Luck.

nice post with good information , thanks for your nice reply.

 

[Bree98]

Well this is something I am reading for the first time. Great!

 

[JimmyChoo]

Hey man i have been trading consistently for over 2 years now
there are a lot of things that you mentioned which aren't true
ill just point them out
- There are mainly 32 pairs that are traded widely out of which the top pairs are EUR, GBP and JPY
- Technical analysis are better on forex compared to forex as the the market moves 24hours a day and there are lesser gap, fundaments are driven by news and other big events
- forex has 3 trillion$ turnover on an daily average
- yes the gaps are definitely less and price follows mechanicals well

An Advice that i could give you is
80% psychology
10% Risk management
10% Trade plan
follow this and you're ready to rock forex

its a nice post with so many good information , got some fine lines.

 

[kroxobor]

Forex market is the most difficult market to trade because of:

1) lack of volatility.
2) lack of directional movement.
3) institutions will not take any view on the market only they use it to hedge the currency risk.
4) Since the market don't move that much any position you take there is high probability that your SL will be taken.

>> This why most of CFD brokers promote FOREX to much because your lose are their gain and in FOREX there are a huge probability that you will lose money.

And IBs promoting FOREX and educating people about it because they are not making money in trading it and brokers give them a huge amount of percentage gain, and teach the people how to scaple because they make more out of the commission.

Yeah it's probably the most efficient market too many factors affecting prices movements and also fundamentals are lagging even the Fed or other central banks meetings are usually priced in well before the actual event.

 

[dorcaslugo]

Stock market is very stable as compared to forex. Unlike the forex Market, it has a stable price pattern that can be easily tracked. In forex the frequency of fluctuation is more and random.

 

[PeterNguyen]

Leverage in forex trading is much higher compares to stock. Also the volatility between forex and stock differ as well. There are few volatile pairs but usually not as huge movement as volatile stock like tesla.