I often think: is it possible to trade forex like stocks?
If you looked at UsdJpy or UsdTry you can see longer trends in certain periods, where you coild have just held on to one position and built positive equity. Because there is no underlying asset to currencies, like companies for stocks, this kind of long-term trend in currencies is a rare find. If you look at UsdTry for the last ten years, however, it did simply that: move in one direction.
This brings the question: is day trading profitable for people like you and me? There is anecdotal evidence that it can be, but for the majority it is not…
If you and I were to save money up and then decide whether to park it somewhere with the hope of good, compounded returns made on that money, would we:
day trade it ourselves?
buy stocks with it and hold those positions long term?
put in an ISA account?
Option 3) seems to be the one with the least risk and demanding no time/effort from us: the bank would do the investing and we would be guaranteed a return; option 1) would be the one with the most risk and demanding a lot of time/effort from us. Option 2) would be somewhere in the middle…
Finding trends in forex is a little trickier, as there are so many factors influencing possible changes in direction. After years of trying I personally failed to find a way to make trend-trading work for me, partly because I like to approach things from a fundamental perspective and currencies do not always tie in with fundamentals like stocks.
What do you think about the three options above? For example, if you saved up something like £5k yourself, would you think to park it in a high-savings (ISA) account or trade it yourself?
Oooh tricky question. Well I already own some shares and thats kind of like stock right?? I would like to invest more money that way.
I also have an ISA but there’s not much money it haha!
If I had £5000 today in my current situation I would trade it myself… however if I had no other savings I would definitely put in an ISA. I think it’s important to have those safe investments in place before taking riskier ones. What do you think? X
A few months ago I read an academic study (one of those long .pdf files!) that went through a lot of
data to show how money managers, e.g. hedge fund managers, were often unsuccessful when trying
to take advantage of short-term opportunities in the market by attempting timing of positions according
to their analysis: in other words, even those top-fund managers, with their professional expertise and
some of the best tools/minds, were much more profitable when following buy-and-hold strategies than
when trying to swing/day-trade the markets according to their own analysis.
If those money managers repeatedly fail at timing good entries for shorter-term profits in the markets,
what chance do small-time, untrained people like us have?
Close to zero, of course, which is why a lot of brokers have popped up like mushrooms in the last few years,fuelled by people’s greed to make a quick profit: the brokers have the upper hand and have done really well by the repeated failure of traders to keep their accounts from going to zero.
Hmmm. Yeah. I get what you mean. This sounds really discouraging. BUT. If we were to stay positive and look at it from a different perspective, we could say that even the experienced ones win some and lose some! So it’s normal to experience losses too. Btw, thanks again for these articles PipMeHappy!
@ria_rose I guess so. After six years of mostly getting it wrong, I would say that I am not so optimistic, and it never gets easier, not even for a month.
its been couple of months since i developed interest in market and its plausible that you held yourself back for 3 years. Its been a challenge to hold back and learn first before putting your money in.
It’s odd that people think like this with money. It’s like starting med school and saying it’s really hard taking a scalpel and cutting into people before you learn what you’re actually doing. Just as dangerous too for different reasons
Haha. 
I shall have a good read of them this evening xx
Yeah. I get what you mean. 
This sounds really discouraging. BUT. If we were to stay positive and look at it from a different perspective, we could say that even the experienced ones win some and lose some! So it’s normal to experience losses too. 
Btw, thanks again for these articles PipMeHappy! 