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Stocks vs Forex - Is everyone suited for forex?

  • Post #1
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  • First Post: Apr 16, 2007 1:38am Apr 16, 2007 1:38am
  •  permanentjaun
  • | Joined Oct 2006 | Status: Member | 655 Posts
So here is my story. I've been trading markets for several years now, primarily stocks. I came to forex trading roughly 6 months ago. In that time I have lost money unfortunately. I have taken myself out of the market and, because of my brokers rules, had my account closed. This isn't because I hated forex and wanted to quit, but because I will be traveling for the next two months and don't want my money stashed away in an online account. I will come back to trading, but I'm not so sure I will come back to forex.

This is partly because I have a theory that it could actually be harder to trade the currency market than stocks. Maybe harder isn't the correct word. I'll say it like this. There will never be a Berkshire Hathaway of the currency market. No currency will gain value indefinetely or as linear as stocks such as BRKA. In that idea is why I find myself questioning if I really want to continue trading forex.

My theory of forex being harder/different than stocks is based on the idea that currencies have a happy medium. The pound can not raise in value indefinetely against the yen. The Japanese government and banks would not allow it. From that I'll say that currencies are much more likely to reverse direction more often based on that premise. While stock industries can be correlated that the majority will rise with good news and fall with bad news together, they are all more or less independant of one another. When trading competing stocks such as APPL and MSFT, if they both release good news they both will rise. They do not have to be in any balance and so, when APPL rises, MSFT too can rise even though they're competing companies. APPL doesn't care if MSFT is worth $400 or $50 a share. The link between two stocks is not as direct as that between trading currencies against another. This sounds like a "well no sh!t" comment since forex inherently involves trading currencies against one another.

Proponents of forex try to sell forex by saying it's great because instead of having to scan 10,000 stocks; you only need to trade 10 currencies. Really you only need to trade 3-5 currencies since at some point you're just hedging or doubling your risk without knowing it. I see this as a problem for two reasons. The first is that while we may not have to scan 10,000 stocks, we do have to know how to trade every environment. When scanning 10,000 stocks what are you doing? You're scanning for the trading scenerio that suits you best. Having thousands of stocks to scan through it is likely you'll find at least one good play. When you only have a handful of currency pairs to trade you're stuck with what you've got. You need to understand how to trade ranging markets, trending, and all other scenerios in between. I don't find that very appealing.

The second reason I find having only a handful of currencies to be a problem is again about pairs being correlated. Even if you only trade gbp/usd; it would still be unwise to not know what is happening with the yen. Hypothetical situation - The yen raises interest rates and since gbp/jpy is one of the big carry trades, the pound falls in the majority of it's pairs. You were long gbp/usd and now you're screwed not because of news from britain or the US, but because of the japanese government. I'll then say that from simple correlations such as this that every different currency will always have a hand in your success or failure even if you only trade one pair.

To get back to one of my earlier points about currencies being in a happy medium, I'll say that because of this, one needs to read indicators differently for stocks vs. currencies. In the stock market if RSI crosses 50 from below, it is a strong sign that momentum is north. This is true with currencies, but is it as true? (My attempt at a Yogism) If I believe that currencies have a happy medium of balance, then the RSI crossing 50 from below in a currency is good, but not a great thing because the currency is more likely to reverse to balance the two currencies. There is more of a push/pull acting on a currency to keep it balanced. I'll try to put it simply by saying, I would trust an MA cross system more with stocks than I would in the currency market. I believe stocks are more inclined to trending and growth than currencies which I now believe are inclined to reverse so as to balance themselves.

I believe all of these add up to a terribly different trading environment that probably isn't well suited for the casual investor. All of that is then multiplied when you bring leverage in to the game. It is my new opinion that leverage is useless and pointless. If forex excites you because of the profit potential presented by leverage, then you're already using it incorrectly. In my opinion it is only a tool to allow you to be able to play in the market since international bank trading requires a standard; one standard lot. I view leverage now, just as I view martingale trading. To survive you have to use a very small amount of your balance to use it effectively. At that point it's not worth it or it's too dangerous. With no leverage in the stock market I feel no threat of having 100% of my account in play so long as I have diversified the balance and the trades are situations I feel confident in playing.

After all that it sounds like I've already made my decision to leave forex. I probably have. I just figured I would throw this out there for others to give their opinions on. Are my assumptions about forex correct or not?

The ultimate question is, is everyone suited to trade forex? A lot of people come to these forums looking for systems on how to trade. Perhaps some people aren't suited to trade forex though. People blow through account after account some times before finally "getting it." Since I can ask the question, 'are some people just not suited for forex,' then there have to be people that it just isn't for. Are the points I detailed above enough to say I probably won't make it in forex even if I master some of the most popular systems such as the james16 thread? I will be looking forward to the discussion before I leave for my trip. TIA. Matt
  • Post #2
  • Quote
  • Apr 16, 2007 2:17am Apr 16, 2007 2:17am
  •  blueruby
  • Joined Feb 2007 | Status: Stock Broker, October 1987 | 1,299 Posts
Here is why I'll never buy another stock or stock option. Mutual funds, sure. Let the big boys play their games, they're good at it and have the money to play. I suppose I could sit all day and watch stock investments the way I do forex, but that still wouldn't save me from overnight gaps on news, and manipulation, and the rest of the time I might as well watch paint dry.

http://videoplayer.thestreet.com/?clipId=1373_10329438&channel=Cramer+On+Demand&puc=&ts=1174597076960&bt=NS&bp=WIN&bst=FF&biec=false&format=flash&bitrate=300
 
 
  • Post #3
  • Quote
  • Apr 16, 2007 2:21am Apr 16, 2007 2:21am
  •  blueruby
  • Joined Feb 2007 | Status: Stock Broker, October 1987 | 1,299 Posts
Besides that, what the H-E-double toothpicks would you do at 2 am?
 
 
  • Post #4
  • Quote
  • Apr 16, 2007 2:25am Apr 16, 2007 2:25am
  •  snowman
  • | Joined Sep 2006 | Status: snowman | 28 Posts
The first question you must ask yourself is: Do you have a "passion" for FOREX? This is the first pre-requisite to being successful in this market.
Is FOREX for the casual investor?Definately, no way....You must be willing to
invest a considerable amount of time educating yourself. Most casual investors I know have no interest in learning the way FOREX works. I find that I cannot even have a casual conversation with most people who consider themselves investors.

You seem like a very knowledgeable guy and I believe you can do very well
in this business. Don't get discouraged.... Another suggestion for you, go to
Don Steinitz's thread and read about his HAS method. It's great for beginners
and it's definately profitable. Good Luck......
just trying to make a little on a lot.....
 
 
  • Post #5
  • Quote
  • Apr 16, 2007 2:54am Apr 16, 2007 2:54am
  •  CWH
  • | Joined Feb 2007 | Status: United We Buy, Divided We Sell | 249 Posts
I never tried stocks so I never know which is better. Forex is my stepping stone as a novice & as a matter of fact, I heard that stocks are riskier than forex. That's why a lot of people get their fingers burnt.

I hope you won't leave this market because you need to diversify your investment portfolio. There's no point to put all eggs into one basket...
"If, at first, you don't succeed, try, try, try again" - Winston Churchill
 
 
  • Post #6
  • Quote
  • Apr 16, 2007 3:03am Apr 16, 2007 3:03am
  •  Darkstar
  • | Membership Revoked | Joined Nov 2005 | 1,429 Posts
I wouldn't agree with your assessment at all, but that doesn't mean it isn't perfectly valid for YOU. Remember, we all trade our beliefs about the market. If you believe that stocks are superior to forex, then I don't think you should force yourself to believe otherwise. Just take your beliefs and combine then with whatever strengths you possess to build a methodology that makes you money. At the end of the day as long as your belief can accomplish that for you, it doesn't matter whether it was truly a valid belief or not.
 
 
  • Post #7
  • Quote
  • Apr 16, 2007 3:17am Apr 16, 2007 3:17am
  •  Mr Trend
  • Joined Apr 2006 | Status: Mmmm pips. | 1,418 Posts
Trading is really all about finding your niche. There are so many ways to trade, that if you don't feel comfortable with forex, than don't trade it.

The only thing you have to consider is that, typically, if you can't make money in securities, then you're not going to make money in any other market, which is why people often jump from market to market. Just something to consider and be truthful with yourself.
Mr. Trend
 
 
  • Post #8
  • Quote
  • Apr 16, 2007 3:44am Apr 16, 2007 3:44am
  •  WHTenn
  • Joined Nov 2006 | Status: Member | 1,758 Posts
Unfortunately, with stocks, in most cases your limited to the number of shares you can short. A big disappointment trading the stock market.
 
 
  • Post #9
  • Quote
  • Apr 16, 2007 4:04am Apr 16, 2007 4:04am
  •  Goose007
  • | Joined Dec 2006 | Status: Follow the money | 21 Posts
Like everything in life there is a learning curve for forex. Yes, some people blow a couple of accounts before they start learning. That's why brokers have demo and mini accounts - so the learning process isn't too painful.

The fact that the markets have to reverse is part of the nature of forex markets. It doesn't matter which way it moves, so long as it moves and the more it moves the better.
Follow the money. Follow the money. Follow the money.
 
 
  • Post #10
  • Quote
  • Apr 16, 2007 4:23am Apr 16, 2007 4:23am
  •  snowman
  • | Joined Sep 2006 | Status: snowman | 28 Posts
Below is the thread for Don Steinitz system....Good luck



http://www.forexfactory.com/showthre...ewpost&t=21899
just trying to make a little on a lot.....
 
 
  • Post #11
  • Quote
  • Apr 17, 2007 12:45am Apr 17, 2007 12:45am
  •  permanentjaun
  • | Joined Oct 2006 | Status: Member | 655 Posts
Quoting snowman
Disliked
The first question you must ask yourself is: Do you have a "passion" for FOREX? This is the first pre-requisite to being successful in this market.
Is FOREX for the casual investor?Definately, no way....You must be willing to
invest a considerable amount of time educating yourself. Most casual investors I know have no interest in learning the way FOREX works. I find that I cannot even have a casual conversation with most people who consider themselves investors.

You seem like a very knowledgeable guy and I believe you can do very well
in this business. Don't get discouraged.... Another suggestion for you, go to
Don Steinitz's thread and read about his HAS method. It's great for beginners
and it's definately profitable. Good Luck......
Ignored
I wouldn't consider myself a novice. I have a very good understanding of a lot of the main components of technical trading. Chart patterns, S/R, I've looked at nearly every indicator, fibs, grid trading, break out systems, the list goes on. You then note that I need to learn how forex works. Well isn't the content of my original post somewhat about how forex works?

My post was not about learning a system that works for me. It was more in line with, I have systems, but maybe forex just doesn't suit my style of trading. I believe it behaves differently than stocks, as I've outlined above. It's like asking someone if they prefer to race cars or motorcycles. It's racing none the less, but motorcycle and cars vary vastly in how they handle and feel. That is why I put this thread out there. I wanted to see if anyone else out there felt the same way I do and perhaps that trading in one market won't make you a successful trader in another. Of course the people I should really be hearing from no longer trade forex and probably won't ever see this thread.
 
 
  • Post #12
  • Quote
  • Apr 17, 2007 12:49am Apr 17, 2007 12:49am
  •  permanentjaun
  • | Joined Oct 2006 | Status: Member | 655 Posts
Quoting Darkstar
Disliked
I wouldn't agree with your assessment at all, but that doesn't mean it isn't perfectly valid for YOU. Remember, we all trade our beliefs about the market. If you believe that stocks are superior to forex, then I don't think you should force yourself to believe otherwise. Just take your beliefs and combine then with whatever strengths you possess to build a methodology that makes you money. At the end of the day as long as your belief can accomplish that for you, it doesn't matter whether it was truly a valid belief or not.
Ignored
Not out of any lack of respect, but why would you not agree with my assessment? I may also believe that the earth is the center of the universe, but it doesn't make me right. If I'm wrong about forex, then I should be corrected. I've given my thoughts on forex and I'd like to hear yours. What am I missing? TIA. Matt
 
 
  • Post #13
  • Quote
  • Apr 17, 2007 6:22am Apr 17, 2007 6:22am
  •  AggieTrader
  • | Joined Apr 2007 | Status: Little and often makes much. | 178 Posts
I've been trading stocks for about 10 years (give or take). I found FX a couple of years ago... and like you... have mostly lost money. I've taken a few months off here and there to regroup after a major losses and found that the hardest part about the FX market (for me) is that is NEVER STOPS.

The stock market has a built-in start and stop each day... it was a built-in "cooling off" period. If I have a profitable day, the markets would still close for that day and not allow me to trade... same rule for a loss. I could return to the table clear-headed and able to exit or maintain a trade with a non-emotional, clear mindset.

With FX, if I had a profitable day... well... one day just ran into the next so there was ALWAYS trading available. I know this sounds like an addicition of sorts, but for me it's just like going to school. FX has had PLENTY of lessons to teach me.

My trading in the FX this past 2 years HAS made me a better stock player as well. It's FORCED me to mature as a trader... faster than the stock market could have.

Trading stocks I was successful... but making serious errors that would've eventually hurt me. I couldn't really admit these errors until the FX markets "magnified" them by 100x!

With FX, I could see my tendency to initially place a string of profitable trades and then continue to "ride the wave" as I quickly convinced myself that I KNEW where the currency was headed.

With FX, I could see my tendency to remain stubborn and stick with a losing trade down to the bitter end.

Sure, with Stocks you can learn the same thing... but for me, the FX markets are a more intense teacher. There are no safety nets here... no one protects you... you want to blow your life savings in a 30-second overleveraged trade... go ahead! You learn to swim or you are bait. Either way it is your choice.

Good luck with whatever direction you choose (and incidentally, the majority of my time is spent trading FX, but I do still have a couple of stock accounts).
 
1
  • Post #14
  • Quote
  • Apr 17, 2007 6:32am Apr 17, 2007 6:32am
  •  WTB
  • | Commercial Member | Joined Sep 2005 | 1,118 Posts
One thing that pisses me off on stocks: massive gaps at market opening can occur and you never know whether your stoplosses will be respected should something crash overnight. How can people sleep peacefully or go on holidays knowing that no stop can be guaranteed?
 
 
  • Post #15
  • Quote
  • Apr 17, 2007 7:53am Apr 17, 2007 7:53am
  •  hilmy83
  • Joined Jun 2006 | Status: Do NOT tilt | 5,708 Posts
i don't like stocks for few reasons

1. not 24 hr

2. uptick rule.

3. corporate scandal and lies to investors (i.e Enron)

4. thousands of stocks. It's a double edge sword

5. You make money BOTH ways. Naturally you buy stocks and wait for it to raise in value and sell prior to your expected downfall. It's not straight forward to short a stock when you don't own it previously. You end up borrowing money for that or something

6. forex makes stocks look like a midget in terms of volume and liquidity

7. forex sounds better than stocks.

8. costs (commissions!).

9. Stocks is not for the low start ups because of 8. Since that would place more risk on a single trade.

10. Volatility
Working towards CME membership
 
 
  • Post #16
  • Quote
  • Apr 17, 2007 11:48am Apr 17, 2007 11:48am
  •  WTB
  • | Commercial Member | Joined Sep 2005 | 1,118 Posts
Answers below in red

Quoting hilmy83
Disliked
i don't like stocks for few reasons

1. not 24 hr

Which, if you ask me, is a bless. Trading Forex through late US or Asia is a pain in the ass, and sometimes your system fires signals off at the wee hours and you miss it cause you cannot be at the screen 24/7. I'd much rather have the market activity exclusively focused on 8 hours/day.

2. uptick rule.

3. corporate scandal and lies to investors (i.e Enron)

Agree. But then again, what happens when the Bank of China is rumored to open the yuan to fluctuation or Bernake uses this or that unexpected word in his speaches? But yes, having your stock plummet because the corporation's CEO was caught getting intimate with a sheep sucks.

4. thousands of stocks. It's a double edge sword

More options = good as long as you have a good filtering software. Wouldnt it be cool if you could ALWAYS find a number of trending forex pairs when you sit down at your computer? How many times you open your charting platform, check cable, yen, swissie, etc, all range-bound and whippy and scratch your head like "hhhmmmm I might as well go walk my dog today...". With stocks there is always a fistful of stock matching your trading style.

If it just wasnt for the [email protected] gaps...

5. You make money BOTH ways. Naturally you buy stocks and wait for it to raise in value and sell prior to your expected downfall. It's not straight forward to short a stock when you don't own it previously. You end up borrowing money for that or something.

Many brokers allow regular shorting just fine.

6. forex makes stocks look like a midget in terms of volume and liquidity

That's true.

7. forex sounds better than stocks.

100% agree. Telling your mates that you shorted the Sterling versus the Yen sounds much cooler than saying "I bought Walmart stocks"

8. costs (commissions!).

Not true AT ALL. Forex is ridiculously expensive to trade at a retail level. Check out those 9-pip spread currency pairs! Talk about expensive!

9. Stocks is not for the low start ups because of 8. Since that would place more risk on a single trade.

10. Volatility

Volatility is not the problem (properly speaking stocks are more volatile than currencies). Low leverage is the problem
Ignored
 
 
  • Post #17
  • Quote
  • Apr 17, 2007 12:14pm Apr 17, 2007 12:14pm
  •  Dopey
  • Joined Apr 2005 | Status: Dopey Bastard | 1,568 Posts
Quoting permanentjaun
Disliked

Maybe harder isn't the correct word. I'll say it like this. There will never be a Berkshire Hathaway of the currency market. No currency will gain value indefinetely or as linear as stocks such as BRKA. In that idea is why I find myself questioning if I really want to continue trading forex.
Ignored
Yes, there never will be a BH of currency pairs. We'll never see GBP/USD go from the current price of 2.0064 to 98.0000. But are you implying that the fx market doesn't trend? Look at EUR/JPY. It went down from 12/1979 to 10/2000. I'd say that's a fairly long trend, probably longer than most stocks.

Look at the GBP/USD. From 10/1980 to 2/1985 it went straight down. I'd say that rivals most major moves you'll see in stocks.

The fx market makes huge trends, and it seems to spend more time trending than equities. So, I'm not sure what your point is in comparing them to BH.

What you fail to mention is the flip side of it. Currency pairs don’t go to zero. How many stocks do? How many companies go out of business? How many countries go out of business?

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My theory of forex being harder/different than stocks is based on the idea that currencies have a happy medium. The pound can not raise in value indefinetely against the yen. The Japanese government and banks would not allow it. From that I'll say that currencies are much more likely to reverse direction more often based on that premise.
The examples I just stated show that currencies can fluctuate quite a bit. Yes, as I stated above, we will never see the GBP at 98:1, but it's all about the scale. The above-mentioned GBP move was for 14,000 pips, straight down. Add in the ability to leverage your money, and I’m talking 10:1 here, not 100:1, and you’re talking about huge opportunities to make money, on the same scale as the equity markets.

Will we see more huge moves like those of 20 years ago? Maybe, maybe not. But look at the GBP/USD from 6/2001 to today. After the initial pullback in 1/2002, it’s been nothing but 38% retracements all the way up to 2.0000, a 6,400 pip move. Yes, theoretically one currency will not rise indefinitely against another, but who needs that to happen to make money?

If you're implying that currencies exhibit a tendency to revert to the mean, then you can play them that way. There are some excellent techniques for doing so, with Pitchforks being the best, imo. The 4-hour chart is great for PFs.



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While stock industries can be correlated that the majority will rise with good news and fall with bad news together, they are all more or less independant of one another. When trading competing stocks such as APPL and MSFT, if they both release good news they both will rise. They do not have to be in any balance and so, when APPL rises, MSFT too can rise even though they're competing companies. APPL doesn't care if MSFT is worth $400 or $50 a share. The link between two stocks is not as direct as that between trading currencies against another. This sounds like a "well no sh!t" comment since forex inherently involves trading currencies against one another.

Proponents of forex try to sell forex by saying it's great because instead of having to scan 10,000 stocks; you only need to trade 10 currencies. Really you only need to trade 3-5 currencies since at some point you're just hedging or doubling your risk without knowing it. I see this as a problem for two reasons. The first is that while we may not have to scan 10,000 stocks, we do have to know how to trade every environment. When scanning 10,000 stocks what are you doing? You're scanning for the trading scenerio that suits you best. Having thousands of stocks to scan through it is likely you'll find at least one good play. When you only have a handful of currency pairs to trade you're stuck with what you've got. You need to understand how to trade ranging markets, trending, and all other scenerios in between. I don't find that very appealing.
I've traded equities. The amount of fundamental analysis involved is huge. I used to spend hours each day going through IBD, each and every day, and that was being very selective at what I looked at and using their full suite of tools.. I don't agree with your example which seems to imply that all correlations between stocks and their groups and sectors is so straight forward. There are cascading effects, unexpected shocks, etc that are a fact of life in the equity markets.

In the equity market you have to consider most of the fundamental factors involved in the FX market as well, such as interest rates, job reports, Fed statements, etc. Both markets have correlations, both require certain amounts of fundamental knowledge and awareness. It doesn’t matter if the correlations are positive, negative, hidden, artificial or anything else. They’re just correlations which have no intrinsic value. If you decide that the correlations are “bad”, “wrong”, “hard”, or anything else, it’s your doing, not the markets’ doing.

As to not having a trade to make because you're only watching one or two pairs, so what? I sure as hell didn't make trades everyday when I did equities. I think people who make trades everyday either have an intraday system that gives them signals, or they just overtrade. If you want to trade everyday, there are plenty of intraday techniques that will allow you to do so in FX.


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The second reason I find having only a handful of currencies to be a problem is again about pairs being correlated. Even if you only trade gbp/usd; it would still be unwise to not know what is happening with the yen. Hypothetical situation - The yen raises interest rates and since gbp/jpy is one of the big carry trades, the pound falls in the majority of it's pairs. You were long gbp/usd and now you're screwed not because of news from britain or the US, but because of the japanese government. I'll then say that from simple correlations such as this that every different currency will always have a hand in your success or failure even if you only trade one pair.

See above. You're basically saying that you have to take into account factors other than those emanating from the countries of the pairs. This may be true at times, but so what? How many factors come into play with equities?

I'd venture to say that at least in the FX market, things are a bit more above board than they are in the equity market (I'm not talking about retail brokers here). Even with the regulation and enforcement, there is a huge amount of insider trading and manipulation going on in the equity markets. It's more localized so the effect can be more damaging to individual stocks, as well as longer lasting. In the FX market, if one or two banks try colluding with each other (which they do to a degree) they still have to contend with all the other banks out there that are trying to take their money. Even government intervention can be overcome by the banks. As a rule, gov't intervention is bloody hapless, but what do you expect from governments.

In equities, when the CEO and his buddies decide to give a royal screwing to the shareholders, who's there to balance them out? The mutual funds? Considering how mutual funds move in and out of stocks, they can't act quick enough and there aren't enough of them in most stocks to counter-balance things out. Equities are more of an old-boys club while FX is more like the Wild West. At least in the West, you knew everyone was trying to rob you, that everyone was a potential threat to your well-being. In the old boys club, you never see the knife coming because it’s always stuck in your back. People think of equities as being sophisticated and genteel. Only the crooks who work the system are.

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To get back to one of my earlier points about currencies being in a happy medium, I'll say that because of this, one needs to read indicators differently for stocks vs. currencies. In the stock market if RSI crosses 50 from below, it is a strong sign that momentum is north. This is true with currencies, but is it as true? (My attempt at a Yogism) If I believe that currencies have a happy medium of balance, then the RSI crossing 50 from below in a currency is good, but not a great thing because the currency is more likely to reverse to balance the two currencies. There is more of a push/pull acting on a currency to keep it balanced. I'll try to put it simply by saying, I would trust an MA cross system more with stocks than I would in the currency market. I believe stocks are more inclined to trending and growth than currencies which I now believe are inclined to reverse so as to balance themselves.

Once again, what's your point? You state that indicators work differently in the fx market. That's like me pointing out to a Brit that the driving wheel is on the other side of the car. He'd look at me and say, "Of course it is."

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I believe all of these add up to a terribly different trading environment that probably isn't well suited for the casual investor. All of that is then multiplied when you bring leverage in to the game. It is my new opinion that leverage is useless and pointless. If forex excites you because of the profit potential presented by leverage, then you're already using it incorrectly. In my opinion it is only a tool to allow you to be able to play in the market since international bank trading requires a standard; one standard lot. I view leverage now, just as I view martingale trading. To survive you have to use a very small amount of your balance to use it effectively. At that point it's not worth it or it's too dangerous. With no leverage in the stock market I feel no threat of having 100% of my account in play so long as I have diversified the balance and the trades are situations I feel confident in playing.

I agree. The leverage is dangerous and is used as bait to lure in retail traders. But it's nice to know it's there if you need it. Ramping up some trades is not a bad thing if you truly know what you're doing. This is not to suggest that one should ever use 100:1 but there are times to press a trade.

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After all that it sounds like I've already made my decision to leave forex. I probably have. I just figured I would throw this out there for others to give their opinions on.

Yes, it does sound that way.

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Are my assumptions about forex correct or not?

I wouldn’t look at it as a matter of being correct or incorrect. Let's say it seems to me you haven't considered all angles...but I'm sure there's a good reason as to why.

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The ultimate question is, is everyone suited to trade forex? A lot of people come to these forums looking for systems on how to trade. Perhaps some people aren't suited to trade forex though. People blow through account after account some times before finally "getting it." Since I can ask the question, 'are some people just not suited for forex,' then there have to be people that it just isn't for. Are the points I detailed above enough to say I probably won't make it in forex even if I master some of the most popular systems such as the james16 thread? I will be looking forward to the discussion before I leave for my trip. TIA. Matt

This is a two-pronged question you've raised. Firstly, not everyone is suited to trading...period.

Secondly, are you implying that if one were successful in equities that their success will not necessarily be replicated in the FX market? (I suspect this is your point). I believe that if one were biased against a market then they won't be successful. We find what we like.

However, I also believe that trading is about a skill set that is applicable across instruments. It's more a matter of being interested in the instrument. Do pork bellies make you giddy? Does owning shares of a massive company do something for you other than give or take money? If you're not interested in the instrument, looking and thinking about it everyday can be a drag, to say the least. It seems to me you prefer equities over FX. Ain't nothing wrong with that.

Whatever you do, do whatever you do (How’s that for a Yogiism?). Opinions are just that, and they have no effect on your bottom line.

Good luck.
 
 
  • Post #18
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  • Apr 17, 2007 1:36pm Apr 17, 2007 1:36pm
  •  FXOne
  • | Joined Feb 2005 | Status: Member | 24 Posts
permanentjaun,


You are right by saying that Forex is different from stocks, in fact it is a totally different monster than stocks. I think the problem with stocks traders trying to trade Forex lies in that they try to transfer their strategies from stocks to Forex......BIG mistake. It is possible to be successful in Forex and I tell you by experience. In my opinion (this is what works for me) you can not have preconceives ideas to where the Forex market is heading this will destroy you; instead just follow the market to wherever it goes. The good thing about Forex is that the mid-term trends are very stable. So don’t try picking bottoms or tops, just try grabbing a chunk of the middle of mid-term trends and with good money management in the long run you are going to be successful.
 
 
  • Post #19
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  • Last Post: Apr 18, 2007 4:18am Apr 18, 2007 4:18am
  •  de123
  • Joined Sep 2006 | Status: Member | 2,331 Posts
ok. here goes my point of view,...i do not hate anything what makes money...lol,....dont care if it is stocks, forex, oil, gold, mutual funds,...as long as i can make a profit....do you think that hedge or inv. funds are doing only forex,...no, they are doing evrything, so why in a hell shouldnt i do the same...at least ill try...:
its just money
 
 
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