I have decided that forex is a losing game - moving to stocks

Justin,

there is much to say on this matter so bear with me if I seem a bit long winded...First, my impressions from what I read in your messages here. You sound like you may have found a method of interacting with the markets but there is something that is causing what you deems to be "unnecessary" losses, or failures, and that those failures are the result of manipulation and NOT your method. I do not KNOW this to be true, but I am concluding that from your tone and the message you write about market manipulation. It would seem a logical step that to prove your theory that you move to a different market to see if you find the same results...the frustration you must be feeling can be at time overwhelming...I understand completely.

I applaud your desire to change things in an effort to improve and agree that if your are a retail FX trader you most likely ARE the victim of some manipulation of prices on your broker's platform. While the US market is a bit more regulated than it was, the retail FX industry is still greatly flawed and no amount of regulation (short of elimination) will fix it...this is why:

The retail space is not the 'real' market. It is a "bucket shop" for lack of better terms because even 100 or 1,000 retail traders all combined rarely make enough volume to buy even 1 or 2 standard lots of currency. So the broker takes the other side of your order and waits until enough traders have the volume to transact in the actual market and the offloads the whole "bucket" of orders. Until that happens you are trading an "imaginary" market inside the retail broker's platform with the broker as your counter party. Only this counter party knows where your stops are and can control not only the price he quotes you, but also the spread...thus you are literally gambling with all your cards exposed. This will not change unless you have enough money (usually 10's of millions) to open a "real money account" and can trade the actual FX market.

If you move to a regulated stock or futures broker (in the US anyway), you will be part of the actual market. This industry is heavily regulated, and if you enter an order your broker does NOT take the other side, it must, by law, send your order to the market and allow it to be filled by another party. Thus your broker only makes money on the commission...If you are quick enough you can actually watch your order go up on the exchange and get filled. Thus the idea that your broker is working against you, is no loner an issue...your broker simply doesn't care, as long as you have enough money to cover your margin or trade.

In this sense, YES, there is less manipulation of prices and therefore if your method was getting knocked about by this previous manipulation, you may not see that on an actual market. HOWEVER...

Don't think that there are not other people (sharks) in these markets also using computer algos to manipulate prices to their advantage. We all know this to be true. Thus if your method does not account for this you will not be any better off....but there is good news in all of this.

In the actual market, those that manipulate price MUST (by law) do so the same way we all interact with the markets...by buying and selling. Those orders MUST (by law) be transacted through the markets the same way all our orders are done. AND those orders leave "footprints" behind in the price action that indicate their intentions. If your method is robust enough to detect these footprints you will do well. If not, you will succumb to the same frustration (or worse) that you feel now.

Bottom line, you will never know unless you try. So here is a checklist (if you didn't already have one) for you to think about before you put any more money on the line...no matter which market you chose:

1. Is my method strong enough and/or robust enough to work in ALL markets? (or is it 'fine tuned' to just one market)
2. Is my trading psychology robust enough to keep to my method in ALL markets?
3. Can I verify (to my satisfaction) that manipulation is responsible for my current limitation in success?
4. Will other markets (more or less regulated) be the type that my method can exploit?
5. Will this market cost more money to transact than my current market?
6. Do I have sufficient capital to exploit the new market?

​Hope this helps!! I wish you the best of luck!!

Let's face it, there are some people who are just not cut out to be traders. They are their own worst enemy when it comes to trading successfully. These are the ones that should be using a successful account manager to trade for them. Trading is a stressful way to make a living. Chances are that changing what you are trading will not make you better at it. Yes the markets are "manipulated" meaning that someone somewhere with more money than you have, knows more about what's going on behind the scenes and on the trading servers and is able to take advantage of what they know. This does not mean that it is therefore impossible for you to be profitable.

After years of trying to guess which way the price is about to move based on any variety of means, whether it be some indicator or chart pattern or candle pattern. Whether it be elliot waves or fib lines or gann lines or you name it....(insert your favorite here)... I have finally realized that it is an exercise in futility and a big waste of time to try and discern market direction. Even if you knew what the news was going to be that is about to be released, that does not necessarily mean that you know which way the market is about to move. We have all seen many times when the market seems to defy logic and move the wrong direction that the news would indicate that it should.

I would suggest that... know matter what you decide to trade, whether it be currencies, stocks or commodities... that you stop trying to discern which direction the price of that thing is going to move. Instead I think you will find your time much better spent in discerning WHEN the market is about to move some substantial amount in SOME direction. I can not tell you where the EurUsd will be this time next week but I can say with a high degree of certainty that between now and then it will have moved 100 pips from where it is now.. It may have moved back to this same price that we see today but nevertheless.. the market will have moved. Whether it be from manipulation or real news or a bad or good piece of information I do not know nor do I care, but I do know that it IS going to move.

When the time arrives for the market moving event on the calendar, make your best guess and enter but don't believe that you know which way it is going to move. If it moves against you more than the normal noise level, reverse your position. Just stick with the idea that when the market is 100 pips or some substantial amount away from your original entry price that you are still going to be in the market in that direction. Let your studies now be in discerning the details such as when is too soon to reverse and how much move you really need to be profitable and which news events in the past have caused the most "manipulation". I wish you the best in your trading endeavors... PipPip...Jimdandy

as I mentioned I feel a problem in forex is that there are too many crossed pairs and this could account for the "randomness" in price movements.

I feel that in stocks you're basically dealing with 1 force when you're looking at the price chart and this in turn will create less "randomness".

I accept losing a trade. I don't accept a losing environment and it may not even be the fault of manipulation but I think maybe there are too many forces as I said that move pairs around and this accounts for randomness.

I'm not enough of a noob anymore to attribute or listen to "psychology" issues for why trading doesn't work in forex.

I've studied enough charts past and present.

I've seen enough of how price moves to come to my conclusion.

I know why I say that it's a losing game and it's not because of my attitude or anything regarding my psychology game lol

I truly do feel the manipulation is more contained in stocks.

I need to refine my know how is all and know what stocks to screen and have a little experience in that aspect and that's about it.

I've already made up my mind. I'm sure you're all good traders but forex isn't for me. If anyone here trades stocks please let me know or help me out either way I'll do my own research.

I believe someone here made a point about forex being a very ranging market and therefore isn't a good place to trade breakouts. This could perhaps work better in general in stocks for example.

call it manipulation like i do or call it whatever you want. I say manipulation and it seems most assume I'm of the paranoid dillusional type lol. Not at all I've just come to the conclusion that THE WAY THAT PRICE MOVES and it's patterns is too random in forex. It's just not a pure way that price moves for a very large percentage of the time.

Hi Justin, hope you're well otherwise.... Sorry to hear...

There may be some randomness, but there are an awful lot of patterns too. The outcomes are always the same. They become second nature and jump out of the screen to smack you across the face . I look at correlations; I look at all pairs, though at times for weeks on end I will only trade what's "hot," but then again I can multi-task . Seriously though, I can talk you through a few things if you like. PM me if you're interested.

I've traded for a very long time stocks and forex.

The only reason I'm sticking with fx is because of the bigger leverage and cost advantage.

Besides that it's all numbers.

But see for yourself.

Good luck.

I just need to know what to look for in selecting my stock picks lol

Let me put it this way. In the back of my mind I truly feel that the randomness of price movement (I'll call it that instead of manipulation) is less in stocks because you're dealing with a single entity. When you're dealing with an fx pair you're not only dealing with the pair you're watching you're dealing with a variety of pairs.

Please read my post here:

http://www.forexfactory.com/showthre...36#post8337836

Good Luck with whatever your decision is !

4x

Well, what the different then ?

I think forex and stock was the same, just different at TF and you can do trading forex at big TF too

I'll toss in a few points :-)

1-Get a broker with low trading costs. You'd be surprised how much a difference it can make in the long run. My most active year trading equities & options I spent over $10,000 in commissions alone. That is not a typo. If I was using my current broker I could have saved over $7,000 of those commissions.

2-Stocks are pretty easy to manipulate. I could even manipulate the price of the smallest stocks. I'm not saying they ARE being manipulated but in reality they're easier to manipulate because the $ amount is so much smaller that many participants can manipulate the price. Not so easy in forex except for a few pips at each broker since the $ amount is so much larger it would take a large player to move the market. All brokers charts are nearly the same so the price similarity is surprisingly nearly the same at all times so saying your broker is "hunting" the stops can only happen if you're talking a few pips otherwise that broker's charts would look quite different from the other brokers. Stop hunting might take place but accross ALL brokers by the big players & not just your broker.

3-If you're going to day-trade stocks, you need to keep at least $25,000 in the account at all times. The account will be designated as a "pattern day-trading account" if you make more than 3 day-trades in a 5 day period. This is probably why many chose forex over stocks as many probably don't want to keep $25K in an account.

4-I'd suggest looking at stock charts & ask yourself if they look any easier to trade than forex. Unless you plan on swing-trading or holding long-term, you still need to know how to trade by just looking @ a chart even if it's not being "manipulated".

5-If you want to continue to try forex, I'd suggest sticking to US$ & Yen pairs only. I rarely look @ the cross pairs because the S/R-S/D levels are never as "clean" as the US$ & Yen pairs. As an example, I feel if you want to trade EA properly you need to analyse EU & AU to figure out when/where EA will turn. Too much "brain pain" for me :-)

Good luck in whatever you do.

the higher the manipulation..

more money u can make...

stocks are easy to manipulate which is why I would preferably stay away from stocks trading under $5 personally that may help and with a decent average trading volume. This fits into the knowing what stocks to screen thing I mentioned I just need.

1-A stock with a small price doesn't necessarily mean it's not good to trade. The stock price alone doesn't determine the size of the company or the liquidity. Stock price times number of outstanding shares = company valuation. As an example, Ford(F) is priced @ 15 with a valuation of $60 billion. Goodyear Tire(GT) is priced @ 31 but much smaller company with valuation of $8 billion. Ford has average volume of 25 million shares & Goodyear has just 3 million. The $5 price level has some significance as many of the institutional investors won't hold a company priced below $5. In my opinion, the smaller priced socks(below $10) are harder to day-trade because each tick is a larger percentage move so not as easy to give up a few ticks so have to be more careful about entry/exit. If the stock isn't moving much, you can sit for 5 minutes waiting for a 1 tick move.

2-There's different opinions as to which stocks to trade. Some say trade just the biggest valuation companies but others will argue to do the opposite & trade the smaller companies as long as they have good liquidity. Each stock has certain "market makers" so if Goldman Sachs is a market maker for Microsoft, do you think they'll have their best traders on a large, highly liquid stock or will they have a lesser seasoned trader on the biggest stocks? Also, who are you trading against? In the largest companies, you're trading against the best traders in the world because the large players must play the largest, most liquid stocks. The smaller companies have less activity so more retail traders that may not be the cream of the crop in traders. Trade against rookies & leave the biggest companies for the pros to battle it out.

Forex, Stocks, ...whatever...

you have to trade THE CHART!

If you was learning the Basics very well you can trade all: Soja Beans, Oil, Wheat, Forex or Stocks.

Not important if Candesticks, OHLC or a Line. It is all the same, and easy - if you want!

Justin

If your strategy involves breakouts you'll need to work on it harder and to pick the right day and time to trade
or you will need to have an alternative strategy for ranging days.

I'd concentrate on pairs that have a good daily range and perhaps only 1 or 2 max eg, EJ.
But being in USA, I think your other problem would be timing.
By the time US market opens, a good deal of the daily range is gone so you are likely to be going for a smaller range and the RR will not be as good.

If you are not prepared to change your strategy then perhaps you could try shares but I don't know how suitable they will be for your strategy.
If you just want to play with them for a while, many brokers offer CFD's on MT4 as well.
I hope this helps.

my strategy is whatever gives a consistent winning formula

Trading stock is definitely easy compared to forex, but making money is going to be slow in stocks, because in stocks you have to buy and wait and I am sure scalping is not really possible with stocks.

Well, since it hasn't worked for you so far then it isn't a winning formula so you'll need to work on it.

Analyzing your trades and seeing how you could have avoided some losers
and how you could have let some winners run for longer would help too.

Perhaps all you'll need is better money management.