Forex less volatile than stock market??

Discussion in 'Forex' started by mounafia, May 22, 2008.

  1. mounafia


    for years I have heard how the forex was the most volatile market in the world.

    I know trade the forex for 2 years and I am beguinning to turn some profit.

    However my strategy of daytrading work like a charm days where the volatility is strong that allow me to take some money in the 15 min charts

    however I have the impression that there are more and more days where the markets stays at the same place in a small range with litle up little down and do not move that make me enter trade that get stopped and stopped and stopped.....and that kill my account.

    So it got me thinking : maybe I should try the stock market....every morning, i would do my research and find the stocks who have important data this day and folllow them for the day like I follow the Eur/usd. By selectionning the stock with a strong fondamental news this day, I am garantee to have good moves everyday..(there are hundred of stocks that moves more than 3% everyday in the SP500)...while with the forex even with days with news, you never know if the market is gonna be moved by them....(except the very big news)

    It seems to me that in a month in Eur/usd, you get maybe 8 days where the move is consequent while the other days, I am just taking very small profit or (most of the time) losses.

    does anyone droves the same conclusion than me with a market with a less and less volatility? what do you think?

    sorry for the english mistakes / i am from France
  2. sg20


    Forex is awesome when volatility is high, it's the thrill seeker's paradise, and it’s the time when contestants brag about their 700% ROI in a month; you can practically trade 16/24 hrs a day when it's active; it's trading like no other. On the other hand, when the market slows down, it feels like a snooze, nothing is moving except during London market hours such typical market for this year.

    I think most stocks are moving too slowly, but if you like to diversified then stock should be a big part of your portfolio since they are more stable and fundamentally sound. In the different context, forex is always forex, it’s highly rewarding but at times unpredictable so don’t lose your account trying hard over it, just try and trade as slow as you can.

  3. I don't know much about stocks or how they move but from what you've said about your forex trading it sounds like you need to recognize when the market is trending or ranging, the two require totally different strategies but both can be traded profitably.

    Bonne chance!
  4. yeap.

    compadre cabletrader tells it to the core again!

    if you're using a trending strategy on 15minute charts chances are that the last month and a half have been real snoozes for you.

    however, your last month and a half, if you used reversal at S/R techniques on 15minutes would have been heaven.

    and it's pretty clear why. for a month now, about all pairs (majors) have been in a sideways-not-sure-about-direction market.
  5. The only reason forex looks like there is alot of money to be made is because of the high lverage you can get . Stocks are 2:1 futures 10:1 forex 100:1 . It takes alot of experience to trade that high leverage. It great when your winning but terrible when your on the wrong side.
  6. aren't you supposed to risk a certain amount as a percentage of your account?

    if so, what difference does leverage make when you are risking 2% of the account on futures, stock or forex?

    this is getting really old with the FX leverage stuff.... Leverage only helps you because forex deals in 0.0001 and it would really suck to gain the 10th part of a cent on a trade....

    It magnifies the potential for profit. But it doesn't make you lose more than you put on the table....
  7. furthermore, losing is terrible any way you put it...

  8. sg20


    If you want cut down on the loses stay on the right side of the trade, always go with the trend direction especially in a typical swing market like now, and always use the longer TF for your guide.

  9. if you want to cut down losses, cover them.... has nothing to do with being right or being wrong.
  10. sg20


    I think everyone has different MM plan, I tend to include loses as part of the winning strategy. You win some you lose some; you’ll be okay in the end if you’re not in the red column.
    #10     May 23, 2008