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What do you guys think about currency trading as opposed to stock trading? I used to want to get started in stock trading, but, the idea of currency trading sounds more appealing now. It seems more profitable and easier since there aren't millions of stocks you have to be looking at, just a number of currencies. How do I get started and with about how much money? Do I need a broker? Thanks.
The volumes of trades in the currency markets are VERY MUCH stacked against the "little guys". Even people that make HUGE MONEY for their parent firms rarely trade their personal accounts in currency plays -- very very very easy for little guys to get squashed like bugs on a hot summer Peterbilt's windshield...
I agree with chet everett. You need to be young, have an iron stomach, great intuition, and deep enough pockets to potentially lose tens of thousands (usually of other people's money) a day or be nickeled and dimed to death by whipsaw movements that play havoc with short-term positions.
In short, it is a guessing game if the objective is to make a living at it as a day trader.
It is not much easier either if you have a productive business that takes on natural positions in a currency pair: it is possible to lose money on hedging too; no matter what happens you have to guess right on direction at one point or another.
Yes, I agree, it entails a high degree of risk, but so do stocks. In both, you can't win if you don't risk. I have about 4k I'd like to invest but I have no idea where and how. If I want to play in the stock market, I'd have to wait a couple of years until I learn about it better as I was adivised not to get a full-service broker, and with currencies it just seemed more appealing and something I can get started on now as long as I find a good broker. I don't know.
No, there is NOT higher risk with stocks. The brokers are selling you shares in a real company. Many companies are paying dividends that makes the yield on quality stocks far greater than all but the riskiest bonds. The market is large, the liquidity is huge, the transparency extreme.
Currency trading is a VERY different. You will get wiped out with $4k very quickly.
You can and should do a LOT of research on any sort of financial efforts to "make money" -- the discount brokers that do online stock trading can be used to acquire shares that you wish to "hold" for a long time or "play" for a short time and I would suggest that the "play" is very risky, and if it is not a stock but a currency it is even riskier.
You really need to decide what you want to accomplish. You could go to Vegas or Atlantic City and double your money on single hand of Blackjack, or play craps for several hours and maybe do even better. Such an activity would NOT be considered "investing" and neither would most people consider moving into and out of positions rapidly to be a way grow an investment...
What do you guys think about currency trading as opposed to stock trading? I used to want to get started in stock trading, but, the idea of currency trading sounds more appealing now. It seems more profitable and easier since there aren't millions of stocks you have to be looking at, just a number of currencies. How do I get started and with about how much money? Do I need a broker? Thanks.
First of all currency trading is the farthest thing from easy you will ever attempt in your entire life. Most likely. You will be directly competing against some of the smartest people in the world who have 1 goal: to stick their hands in your pocket and take as much as they can.
You need a broker. If you are seriously considering this I recommend Oanda or GFT. You can open an account to trade with only $500 or so, and you will be trading mini-contracts. It will probably take you at least 3 years of hard work to become consistently profitable, so if you decide to trade anything but mini-contracts I'd consider you an absolute fool.
With that all said, you may be some type of prodigy or have a lot of experience. But it is a huge insult to traders to assume making money is easy. You'll find out you are dead wrong.
I agree with chet everett. You need to be young, have an iron stomach, great intuition, and deep enough pockets to potentially lose tens of thousands (usually of other people's money) a day or be nickeled and dimed to death by whipsaw movements that play havoc with short-term positions.
In short, it is a guessing game if the objective is to make a living at it as a day trader.
It is not much easier either if you have a productive business that takes on natural positions in a currency pair: it is possible to lose money on hedging too; no matter what happens you have to guess right on direction at one point or another.
First off, it is an educated guessing game. If you disagree and trade, please continue because that would be good for me.
However you are right that the markets do swing back and forth a bit, though I would not classify such movements as "whipsaws."
And day-trading currencies (spot market, AKA Forex) is a disaster waiting to happen with the spreads the brokers will charge. Futures you can day trade, Forex no.
No, there is NOT higher risk with stocks. The brokers are selling you shares in a real company. Many companies are paying dividends that makes the yield on quality stocks far greater than all but the riskiest bonds. The market is large, the liquidity is huge, the transparency extreme.
Currency trading is a VERY different. You will get wiped out with $4k very quickly.
You can and should do a LOT of research on any sort of financial efforts to "make money" -- the discount brokers that do online stock trading can be used to acquire shares that you wish to "hold" for a long time or "play" for a short time and I would suggest that the "play" is very risky, and if it is not a stock but a currency it is even riskier.
You really need to decide what you want to accomplish. You could go to Vegas or Atlantic City and double your money on single hand of Blackjack, or play craps for several hours and maybe do even better. Such an activity would NOT be considered "investing" and neither would most people consider moving into and out of positions rapidly to be a way grow an investment...
He did not mention anything about investing and there is a difference between investing and trading. And trading is not similar to blackjack or craps, but poker. That's assuming you have an edge. The reason I see them as different is because in blackjack and craps the house has the edge. In trading and poker, a proficient participant will have the edge.
Also, if you have 4k that is a great starting size IF you trade mini-contracts (about $1 per tick). But you need to learn a lot on money management and psychology before getting started, or else chet here is right. You'll be wiped out quickly.
What do you guys think about currency trading as opposed to stock trading? I used to want to get started in stock trading, but, the idea of currency trading sounds more appealing now. It seems more profitable and easier since there aren't millions of stocks you have to be looking at, just a number of currencies. How do I get started and with about how much money? Do I need a broker? Thanks.
Do you have any idea what drives currency valuations?
I more or less don't. I certainly don't have enough of a grasp of it to invest in currency markets.
Do you have any idea what drives currency valuations?
I more or less don't. I certainly don't have enough of a grasp of it to invest in currency markets.
Global economics drive currency prices over the long term, over the short run it is mostly based on psychological factors.
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