Stocks Vs Currency

[Pony 10]

At first, when I decided I wanted to be a day trader, stocks were really the only thing I was thinking you could make money off of (I knew about futures and currency, but didn't know you could day trade them). I started reading a lot of books so that I had somewhat of an idea on where to start (I tried a couple of other times, just trying to use intuition, thinking it was easy. (though I still didn't risk much). Anyway, I'm on my fourth book, "Day Trading the Currency Market," -Kathy Lien. Anyway, it really showed me quite a few of the benefits of trading the forex.

 

Now, say that I do decide to trade forex instead of securities. I was planning on starting out with $30,000 originally with stocks, but apparently there is no day trading regulations in the forex market, is that correct? And you can have 100-200 times leverage? What is the typical amount of capital a trader would have in his account with that kind of leverage?

 

Lastly, I looking at a few currency charts, it moves in fractions of a cent. This may seem too general of a question, but would 10k have the same profit capabilities in the forex as it would a stock (specifically symbol: BAS). Let me be more specific. I went long and short 600 shares (roughly 17k worth) of BAS, and there were several movements of .40 (intraday) which made $240 each forty cents movement. (I'm just testing the waters, I don't trade everyday)

[SIUYA 11]

stocks are very different to FX - while the general principles to trade them may be the same they have different characteristics and its worth learning them before committing too much money.

As I understand it depending on where you live and the account you hold, 100-200 leverage is not as likely to be possible. Plus just because they offer you leverage does not mean you should use it....its a good way to go broke.

The other thing is as a suggestion - dont think in terms of cents and dollars when it comes to currencies - think in terms of pips or ticks and percentages. The moves are generally smaller than for stocks, but the liquidity is generally better, the leverage greater (but see suggestion above) and they trade around the clock.

If you manage your trades for risk return as in the standard format of risking a percentage of equity to trade each time, then you should be able to work out if your leverage is excessive, OR you PL is not going to be sufficient as the moves can be reasonable small in percentage terms.

Run the numbers yourself - its the only way to learn what suits you.

 

Also check out threads regards FX brokers, and who you are dealing with, what their reputations are like, their spreads, commissions etc; the FX world has more sharks than goldfish in it.

hope this helps somewhat

[cornixforex 10]

I tried stocks, SIF's etc but ended up trading Euro, because it is the #1 world's market, which is active during my trading hours (6-10AM UTC).

 

For a trader who trades European hours, IMO the best choice.