For a while, I have had an intense interest in the stock market, and while I still do, I noticed the great advantages to forex such as 24/7 , no commissions, etc.. I'm curious..whats a typical day for all your forex traders ?. I asked the stock traders this, and now its your turn oh.. I dont want this to sound like a lazy attitude kind of question, but because there is so much liquidy in the fx and the fact that its open 24/7, does that make trading the fx easier than stocks?
When i start trading forex i also thought that 24/7 is advantage for forex , but now i think the opposite(coolweb thread start me to think about this). I think it`s easier to daytrade 6.5 hour trading session and wait for trend to developed because i missed to many intraday moves in forex. Trading 7 hours in 24 hours session you are in mercy of randomness of catching more whipsaws and less trends.
The retail industry often touts liquidity as one of the reasons to trade fx, which is misleading for small intraday traders since they're forced to trade at an artificially wide spread and a requoted bid/ask (granted, it may be a fair price to charge for the ability to trade micro size lots for those who need to). If you're trading 50MM at a clip, then sure, you will appreciate the depth of the market (as you should when you pay up a few ticks each way). But for an individual short-term trader the depth of the market should be far less a concern than the immediacy of liquidity available, which is optimized with 1) a single-tick spread, and 2) tradeable bid/ask quotes at all times. The ECN model (ie, globex) is therefore much more advantageous on the majors for the smaller trader than a "requoted" or negotiated market, which only makes sense for larger orders or illiquid currencies. As for "easier to trade", fx is nothing if not volatile, so if you're used to trading nasdaq names with nosebleed p/e's, you will be in your element.
Illiquid, I agree with what you are saying, that liquidity of the FX market is deceptively advertised, to unsophisticated speculators, as an advantage in their trading; when in fact, it is not, if they are trading through a bucketshop which deprives them of access to this very liquidity. The only liquidity that matters is the liquidity to which a particular trader has access, and in a bucketshop, liquidity is extremely poor. The only problem with what you have said is that the people victimized by this scheme are so unsophisticated, that many of them will have no idea what you were talking about, because you used the vocabulary of an experienced trader, and you didn't dumb it down for the newbies! I think that we all benefit, as traders, if we help to protect newbies on EliteTrader. If we do this, then we create more of an incentive for brokers to offer better retail services, and less of an incentive for brokers to rely on deceptive advertising, bucketing, and other forms of mediocrity.
The other point that prospective retail trades think is a massive 'advantage' i the 100-200 leverage on offer. Some advantage that, more like a quick way for the brokers to transfer your wealth to them........