Hi, In todays high level of volatily in the markets it's really difficult to trade stocks, (for me) because of much higher level of false signals... So, I was thinking.. Why not try Forex trading.. -It seems to be less risky, ( a stock can go bankrupt overnight, a currency can't) - nice access to liquid instruments.. - and a 24 hour market, no time stress.. any thoughts, lessons, opinons.. Any forex traders?
I can't compare stocks to fx for you but I think your thoughts are distorted. FX trading offers plenty of risk -anything is possible as a currency could certainly become worthless. You're right about the good liquidity, but regarding the trading hours, it can be a double edged sword because 24 hours can easily become one continuos treadmill for 6 straight days. I do not want to discourage you from the joys of forex (I certainly love it); just don't treat it naively.
Forex is great but like the above poster said, it does have its downfalls. Firstly, most brokers are bucket shops since there is no exchange. Secondly, the hours. If your a day trader it can get very stressful because the hours are long. I think if I were to get back into forex it would be to swing trade only. Also I recommend using an ECN broker because the spreads are much better and they seem to be much more legitimate. Good luck.
Yes, anything is possible, but if you trade the major currencies like Usd, swiss,jpy,euro the risk of one of these beeing worthless overnight is almost zero.. I dont think It's smart to daytrade Forex, any statement og info can make any currency jump 2 or 3%, and if you are datrading and making money on 0,04 % etc, a 2% move can be wipe out you entire capital.. So, I think my time range will be 1 to 30 days.. finding short tem trends, and reverals.. Yes, there is noe exchange, so is itr safer to use big brookers, because they may have lower spreads etc..?? And what is an ECN broker? thanks..
ECN = Electronic Communication Network. Interactive brokers and MB Trading are two brokers that I know of that offer ECN for forex. It's not like other forex brokers which manipulate spreads and prices, you are directly connected to major banks to get you the best spread and most accurate prices.
Andretrader, Same here. Got out of trading stocks because of same reasons you stated. I now trade currency futures and forex pairs. I paper-traded for months to find a strategy that suits me (and to sharpen my eye for good setups) and produces a nice profit like when I was trading stocks in the better, steadier days. I settled for 60 min charts using EMA20, CCI 15, Stoch 7,14,3 and MACD 24,52,18. I prefer trading the pairs with nicely moving prices and I avoid trading, when the moves are unsteady. This amounts to about 3 trades a week and produces approx. 600 pips a month. Not bad on a leverage of 50 or even 100. I look at the charts about twice a day. Drawdowns are minimal and the success rate is >80%. Happy trading - Felix
You can trade FX with bucket shops all you like the biggest problem is you have NO way of knowing whats really going on in the market. You dont see whats on the real books in the interbank markets and they're what moves the currency markets.
Is'nt itraday trading i Forex very risky, I mean if a sudden news come, a 2 or 3% move can really be a lot when your using a lot of margins intraday?? Have anybody here experience with SAXO trader?? Got a offer from them, seems very stabile..
I traded the eminis for about a year with no success. I switched to forex because it is much cheaper to learn on. So far I dont see much difference between the two. Both are subject to erratic moves caused by news, etc. Both have erratic intraday moves. The advantage for forex, imo, is that you can trade much larger timeframes for less money and it appears to me that the larger timeframes are where its at.
Most erratic moves of 2 - 3 % come back, at least to some degree to give you a chance to enter or exit at a favorable spot. Besides 60 min charts I also use 360 min to see the general direction. And if CCI and Stoch have not reacted before or after a gap, price is most certainly turning back.