Stocks or Forex?

[wasupnow14]

I've been involved with the stock market for awhile now. Typically, i chose to invest in undervalued smallcap companies and hope for big returns. However, the consistency was not there and I found it very hard to keep up with all the companies press releases.

Someone told me that forex is a much safer play and, if you learn it well, can be a very consistent investment vehicle. What are the benefits of trading forex instead of stocks? Im not asking about obvious benefits (leverage, only a few currencies to keep track of, etc...), but was wondering if anyone else out there made the switch from stocks to forex as their primary trading tool. If so, what is your take on it?

[universal]

Yea I have also heard that forex is the better way to invest.

[pipgod]

Most definitely FOREX. I had a friend who was watching the price of a stock go down, down, down. He got in long at $1.25 for ten thousand shares. Another friend who was a doctor got in long at $.71 for one thousand shares. I'm sure you can figure out what happened. Pump and Dump. They lost all of their investment. Again I say "do the forex thing".

[sausagerocket]

Forex all the way. I've been trading stocks for years with limited success... Market Makers drove me nuts! what they are doing is absolutely criminal especially in OTCs. I got myself into forex maybe a year ago and I'm not even looking back. I had a lot more 'luck' with it. It is much more stable and predictable! Forex is much more active so you can make money much faster (and potentially loose a lot faster too! ).

Education and money management is the key, you can loose every other trade and still make money if you trade correctly!. Don’t be greedy - forex isn't Get rich quick program! get yourself into a get rich slow program and 10 pips a day will make you a millionaire in 10 years or less!

my best advise to you is open a Demo account and play around with it, or even better... Open yourself an Oanda account with like $50-$100 so you can get the feel of playing with real money.

Technical analysis basically the same as with stocks, but better ... (this site looks like a great place to start)

download MetaTrader 4 ... its a great (free) platform for technical analysis with a lot of backing up (lots of indicators to download)

[trinat]

Originally Posted by wasupnow14

I've been involved with the stock market for awhile now. Typically, i chose to invest in undervalued smallcap companies and hope for big returns. However, the consistency was not there and I found it very hard to keep up with all the companies press releases.

Someone told me that forex is a much safer play and, if you learn it well, can be a very consistent investment vehicle. What are the benefits of trading forex instead of stocks? Im not asking about obvious benefits (leverage, only a few currencies to keep track of, etc...), but was wondering if anyone else out there made the switch from stocks to forex as their primary trading tool. If so, what is your take on it?

Hi,
I didn't make the switch from stocks to forex...I went for forex right away. So, I will refrain from giving you a full list of benefits as I am sure you did a research of your own on this subject, but maybe it's worthwhile to point out a few less obvious benefits.

In forex the "Inside trading" is nearly non-existent, since currency fluctuations are largely connected to a variety of global macroeconomic swings, such as GDP growth, inflation, interest rates, budgets, trade deficits and others.

In Forex you can benefit from Bear and Bull Markets and you can make money on the difference of interest rates.

Basically, you can analyze a nation as if it were a single corporation, since currency pricing to some extent reflects the stregth of country's economy. For starters, you can try trading on a demo account and see how you are doing

[topgun]

Take a couple of days to go through the schoo here at babypips and that should help you decide. They have a section on stocks or forex where they describe the differences.

Topgun

Originally Posted by wasupnow14

I've been involved with the stock market for awhile now. Typically, i chose to invest in undervalued smallcap companies and hope for big returns. However, the consistency was not there and I found it very hard to keep up with all the companies press releases.

Someone told me that forex is a much safer play and, if you learn it well, can be a very consistent investment vehicle. What are the benefits of trading forex instead of stocks? Im not asking about obvious benefits (leverage, only a few currencies to keep track of, etc...), but was wondering if anyone else out there made the switch from stocks to forex as their primary trading tool. If so, what is your take on it?

[xmsr33]

I reccomend most of your portfolio in quality small caps, such as those advocated by the Motely Fool's Hidden Gems newsletter.

History shows that small caps, over the last 60 years averaged 17% annual growth.

Definetly the best equities category.

The key is to have a long time horizon, use only discretionary funds and buy and hold a diverse porfolio of companies.

I myself an up 27% so far in the 15 months I have been trading.

I may be completely wrong, since january backtracks of Cowabanga US/JPY shows 173 pip profit, or 3.1% profit which, if indicative of regular monthly cycles means 25% annual profits are possible. Even with taxes Forex may prove to be better than small caps.

However whether or not this is true will largely depend on one's system, trade discipline and money management.

I am willing to accept the logic of Forex superiority since 1% losses are better than stock market crashes, however I will need time to verify whether I can beat my own stock market results.

[universal]

Yes fxcm, which is forex capital markets, has a test demo that you can try and get the feel for it. I would definitely look into that.