Forex VS Stocks

Why is forex your preference?

If someone wants to give me 100:1 leverage to trade stocks then I have a plan.

I think Ill have to reword that part, but I Hear ya. short gbp/usd.

24Hr Market.

not sure that forex IS my preference anymore.

reasons for initial interest :

- easy to get into (mt4)
- free up-to-the-moment charts / data
- nano-lots
- 24hr
- mql (not so much initial interest, just really great to have nowadays)

reasons for maybe tossing-it and moving back to stocks if enough capital saved :

- pretty-much all of the above due to their relative consequences for existing
- forex market is quite a beast that is difficult to understand / too much information, wrong information, obscure information, hidden information
- forex is quite likely that most significant and 'real' movement are purely day to day businesses doing their day to day things which can not be predicted with charts, darts, or farts
- forex has a smaller 'pool' of 'real players' (we are not real players. we don't move the market and do not even actually exist in the market... purely players in a shadow-game). how can one expect to predict the intentions of a handful of players who may, or may not, be influencing each other in various random ways. stocks have 'real people' 'really playing' and the volume is actually readable, and potential crowd behavior can be gleaned and chart patterns actually possibly found. you can even move the market all by your little self if so inclined with your more realistic capital.
- cost of trading in forex is a pure ratio of the amount leveraged. play with more money, the cost goes up to match. cost of trading in stocks diminishes as capital increases (which is why a minimum balance is required to even bother attempting stock trading, else commissions chew you out)
- all movement is constrained between a set open and close, therefore all business must be completed between the open and close (or risk holding overnight if so inclined). unless you sleep-in there is no sleeping-through some random spectacular movement like can happen in forex, and if something is going to move it HAS to move between the open and close i.e. less data to wade through and movements are 'real' due to their time-constraints to get moved and be over and done with.
- influences on price movement are more relative and relevant, and not some random butterly turning left instead of right somewhere on the other side of the world.

i think there are other reasons that i forget for now. at this time i have a better chance of fluking a winning penny-stock than picking a good forex trade. i'm getting itchy to crack-open some intra-day stock charts and have a peek after staring at forex charts forever. forex still intrigues me and i have different things i want to try with it, though. i think there are quite a few key things i'm completely missing which would change my whole view on everything forex-related. damn puzzle!

no problem with that.

Very informative post, thanks.

There it is. Watch for the "business" and get some "business" - prediction not necessary. Just don't try to take too much "business"...

personally i like both. i do stock trading but more a buy and hold trader rather than intraday. with regards to forex i like the challenge - i live for it. the harder it is the more i want to learn to master it. forex for me is like a wild horse that needs to be tamed but once it is tamed the returns it gives you is better.

For whatever it's worth, I posted some thoughts about stocks vs forex here.

Market makers like CMC Markets and IG Index allow that kind of leverage: you can trade CFDs or spread bet stocks and indices of most major world exchanges. Or you could choose an MT4-based broker like Active Trades who allow spot trading of some international indices and commodity futures.

Hi Hanover, i've read your post on stocks, very objective observations.

I've been buying stocks since my lates teens and only started forex much later. It really depends on the individual's approach. Personally I think one has to be very clear of their strategy and approach and be very clear about the markets differences.

Eg, those who bought into the post sub prime market could have easily doubled their money by now, where in forex, I have to constently keep tabs on the movement, both are a very different game for me.

Stocks I go over 100 to 300 charts a week, buying only average once or twice per quater. In forex I only have to keep tabs on the majors and trade tenures are much shorter.

I love both, just that in forex, I get my crave for daytrading statisfied there.

Hanover, do you have any experience on ausssie cfds, they have a centralized clearing...

regards.

I prefer stock options because that's the only way I've found so far to make consistent money.

Forex has an allure but I haven't worked out a consistently profitable "bread and butter" method yet.

Forex is way more vollatil, and I believe it are two different worlds, so the world where you have put the most effort and learning in is also the one that has my preference..

And the profitpotential is way higher in forex then in stocks.

One of the most primary reasons is liquidity. Governments, central banks, investment banks, corporations, hedge funds, etc.

But I think my most primary reason for trading currencies is the flexibility I have in controlling risk.

I can risk 5% of my account over exactly 28 pips if I choose - on a multi-million dollar account. I can risk the same 5% over exactly, say 355 pips, on an account of just a few hundred dollars.

pretty much forex for me. i like a true 24 hr market with no gaps. more liquid so it moves quicker for sooner profits. and leverage is cool too i guess.