Difference between forex and stocks trading to take note?

Discussion in 'Forex' started by helpme_please, Oct 9, 2019.

  1. 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?
  2. a successful professional trader told me that stock and future observes support and resistance, while forex does not. so he only trades futures. do not have first-hand experience.
    VPhantom likes this.
  3. MattZ

    MattZ Sponsor

    Leverage is what makes the difference in many cases.
  4. That's true but not a big issue if the trader sizes his position accordingly with the built-in leverage of forex.
    MattZ likes this.
  5. gaussian


    huwhat? The financial statement is the country's financial statement!

    Forex is scaled with leverage.


    Spot forex is more-or-less an OTC market (interbank). There's no regulated contract sizes, no regulated data feeds, no regulated anything. You are at the mercy of your dealer (broker).

    This makes forex a spotty and very dangerous business. There's a reason the requirements tend to be extremely high on places like Interactive Brokers. Whereas most accusations of stop running can be blamed directly on the skill of the trader, it is not uncommon (and I'd say, probably the average) to run into a fly by night "forex" shop that is either a bucket or running stops on their users.
    VPhantom and Peter10 like this.
  6. Sticking with regulated, reputable forex brokers is important since forex is not regulated and scam brokers is a high risk than stocks.

    I have read that forex is a very liquid market compared to stocks, so it is very hard to manipulate. Stocks are more easily manipulated than forex due to lower liquidity. Hence, stock market is more rigged than forex. On the other hand, I read that interbank trading is huge in forex and banks manipulate forex markets because they can see the order flow. Hence, forex market is more rigged than stock market. Which is more likely to be true?

  7. R123


    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.
  8. May I ask do you prefer price action or indicators? You mention most indicators, technical patterns can be thrown into the trash. Do you think indicators don't work well in forex compared to stocks?
  9. R123


    Price action. Did best with range trading away from Big announcements, and reverting to mean. Always use a stop, a tsunami, missile test, etc out of the blue can cause a real black swan effect anytime of the 24 hour day.
  10. expiated


    My advice would be completely different depending on whether you are a day trader, a swing trader, or a position trader.
    #10     Oct 10, 2019