Difference between stocks/index and Forex

[TheMordy]

Hi there, I'm a commodities trader, looking into Forex.

What's the main difference (is there any) between stocks and forex.

Or easier, any major difference between trading (with TA or PA) the ES-mini and FX ?

As example, I see so much talk on FX threads about money management, why not just use the 2% rule, what's the big deal ?

Or, so much talk about 'casino', 'gambling', ppl lost all their money. What's different than ES or NKLA or BBAI, can gamble and lose there as well.

Is it just because FX is full of BS ppl, who wan't very high leverage and dream about getting rich overnight?

Btw, I'm a trend trader, so don't care about manipulation, or drawdowns.

 

[Bad_Badness]

FX is unregulated. Let that sink in. Cross country (international) brokers- "market makers" who do not answer to anyone.

The only FX I would trade is through a regulated instrument like the CME pairs.

Don't take for granted what the OTC (Nasdaq), NYSE, TSE, etc. do to make sure it is "fair", up to a point. None of that really exists or enforced in FX trading.

Only fools trade FX at the amateur level where your counter party is essentially anonymous.

PS: You will care when your fills and stops are hit very very far from the market because the "they" decided to just do it.

 

[TheMordy]

FX is unregulated. Let that sink in. Cross country (international) brokers- "market makers" who do not answer to anyone.

The only FX I would trade is through a regulated instrument like the CME pairs.

Don't take for granted what the OTC (Nasdaq), NYSE, TSE, etc. do to make sure it is "fair", up to a point. None of that really exists or enforced in FX trading.

Only fools trade FX at the amateur level where your counter party is essentially anonymous.

PS: You will care when your fills and stops are hit very very far from the market because the "they" decided to just do it.

Thanks for that.

So trading FX on CME Exchange through InteractiveBrokers (~33x leverage) is just regular business, as ES-mini ?

 

[PPC]

@Bad_Badness
Those “fools” who trade FX make very nice living from spot FX with better fills than one can get with futures, absolutely no slippage, no stop hunting, and dealing with regulated FX brokers with no issues whatsoever.

@TheMordy
FX trades differently than stocks. FX patterns up differently than stocks and indices. FX oscillates between consolidating in ranges and impulsive moves, which works quite well if one enters with limit orders.

“V” reversals occur far more in FX then they do in stocks.

News releases and geopolitical events can trigger FX into impulsive moves, you need to keep an eye on it.

The majors and main crosses respond very well to levels (S/D, S/R, fibs/App).

Banks tend to deal at certain dealing ranges, being able to recognize those ranges is key for intraday traders.

Even though the ATR in FX is less than a decade ago (when we had higher spreads), the current very low (zero spreads on some pairs) offers a very good travel range for scalpers (even on M1) on EU, UJ, and AU. On other pairs are you’re better off trading >M15.

I avoid Swiss Frank pairs, too choppy.

I think that FX is harder to master than stocks, but once you get in synch with the order flow and the rhythm of the price, then you’ll find that FX (intraday) trades quite predictably from zone to zone. It is suitable for ‘set & forget’ approach with limit orders, and can be traded more predictable than stocks. However, this is just my own opinion.

If you’re a trend trader, you might find FX more difficult, especially intraday, but do not listen to me, pull out some charts and do your own investigation.

PS: I would not recommend IB for FX, their fills are too slow. But if you want to trade currency futures, then IB is fine. It is 2023, we now have many very reputable, regulated FX brokers, just do your due diligence on the various regulations, it really is important to chose your FX broker well, there are still some which I would not use myself, but there are plenty of good ones which have overall better conditions that trading CME futures.