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Last week we saw a massive drop in the stock market. Dow jones drop by almost 500 points.
It was the latest biggest drop in a single day after the lehman brothers episode.
Many of my friends who were trading stocks were caught out unaware resulting in a massive dip in their portfolio.
Some of them who knew that i am a forex investor asked me if i was affected.
The answer is and always will be: No.
That’s one of the reasons on why i choose forex over stocks.
Forex vs Stocks Reason No.1
-> Forex traders are not affected by massive news affecting the economy.
- At most, we only lose the single trade that we are in when the news happened. Which is only a small percentage of our capital (with the right money management skill)
Forex vs Stocks Reason No.2
-> Generally there is no leveraging for stock traders. (not including margin traders – which is very risky)
- The rich gets rich with leveraging and compounding.
- Whats the point of investing if there is no leveraging.
- Therefore, stocks will probably not make you very rich.
Forex vs Stocks Reason No.3
-> Forex is a 24 hr market. We forex traders usually enter a trade and are out either in the same day or 2. (depending on which time frame you trade)
- Generally, if you hold a stock. It is at least for a few months.
Forex vs Stocks Reason No.4
-> There is no shorting in the stock market. (Not including options)
- Meaning you can only buy it up/long.
And if you notice, the market usually goes up a little with a good news, but drops massively with a bad news.
Forex vs Stocks Reason No.5
-> There is no commission in the forex / currency market.
- The commission may not seem a lot for a single trade, but if you are a full time trader or one who trades a lot. This commission expense will accumulate to a relatively significant figure.
Forex vs Stocks Reason No.6
-> Instant buy/sell in the forex market.
- As the trading volume is so large in the forex market, we do not have to wait for a buyer to take up the lots we are selling (like the stock market).
- Eg. when the stock market is massively falling, you can’t sell even if you want to as there is no buyers who will buy your lot.
The list can go on and on..
But the point i want to make is:
The reason that we invest is to make big money.
Forex vs Stocks at the end of the day are just investment vehicles.
So why choose a investment vehicle that will probably not make you very rich? and yet heavily affected by the news in the economy?
Just my 2 cents. I may be wrong.
Check out our online forex trading AFM winning Price ActionForex Course where i teach you the exact FULL Forex Day Trading Systems & Strategies that i personally use to be consistently profitable.
See you on the other side my friend,
Asia Forex Mentor
Ezekiel Chew
Asia #1 Forex Mentor
www.asiaforexmentor.com
Next Beginner Article: Forex Robot – Do They Work?
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Clara Yul
August 9th, 2011 at 3:18 am
This is such a good link site Forex’s education and mentoring Strategies.
Thank you for the tips and news, Sir.
Cheers
Ezekiel
August 9th, 2011 at 10:04 pm
You are very much welcome. =)
Remember in forex trading, it is your discipline and perseverance that will pull through your success.
Vladimir
August 10th, 2011 at 5:43 pm
Ezekiel, good point!