How hard is forex trading?

[Ken]

Just a question.

How hard is it to profit from forex trading?


Is it glorified gambling?
Can you do it 24/7 or is it a matter of just picking your moments?

Can you accumulate currency to average out your price?

Does the use of leverage make it attractive for short term swings?

Not looking for easy cash, just considering something other than the stock market as I beleive at some point the Aussie Dollar will ease against the US dollar.

any good books worth reading to lear forex trading??

 

[prawn_86]

How hard is it to profit from stock trading?


Is it glorified gambling?
Or is it a matter of just picking your moments?

 

[Timmy]

I love it when, after outlining a challenge (such as building an amphibious car) Jeremy Clarkson (Top Gear) looks into the camera and says "I mean, how hard can it be????"

Its always harder than it looks, and this is a roundabout way of saying FX is harder than it looks too.

I would think, though, Ken, given you have so many posts under your belt and been on the site much longer than me that you have plenty of trading experience in stocks, which is a great headstart, much more than for a rank beginner. The principles of supply and demand and so forth are exactly the same.

One thing to be careful of is that, when coming from a stock trading background, it is often possible to come up with a valuation for that stock ("How hard can it be????") and then analyse the price in reference to that valuation. Doing such a thing in FX is much more difficult. There are plenty of theories of exchange rate valuation, but there is much more disagreement on each ones accuracy/usefulness.

In answer to your specific questions..

How hard is it to profit from forex trading?
See above


Is it glorified gambling?
Depends on the individual - certainly easy to view it as gambling ... but for a well researched and disciplined trader, no it isn't.


Can you do it 24/7 or is it a matter of just picking your moments?
5am Sydney time Monday to 5pm NY time Friday are the regular hours.
Liquidity varies enormously throughout the trading day and depending on what currency pair you are viewing.


Can you accumulate currency to average out your price?
Yes.


Does the use of leverage make it attractive for short term swings?
Yes (results may vary between individuas depending on skill etc.).



any good books worth reading to learn forex trading??
There are probably some good introductory texts on FX around, but there is good info on various websites (ForexFactory my favourite - but a good intro is the FX forum right here on ASF) too (I am not talking about 'how to trade FX" info, just info on how the market functions, theories of exhange rate valuation and so forth).


Some general observations on how FX differs to stocks:
There is no central exchange, prices can vary between brokers (held in check somewhat by arbitrage opportunities but discrepencies can and do occur, all the time). Thus you may get set on an order in one broker and not in another.
Regulation of FX is nowhere near as tight as that of stocks. Investigate your broker thoroughly. US or UK/Western Europe-based is usually best. Different brokers have different access to liquidity channels too.
Most newcomers trade with WAY too much leverage.
Prices can gap, liquidity can disappear ... this can happen more than you think (does happen more than you think). Be especially wary around releases of significant economic reports. London timezone is generally the most reliable for ensuring liquidity (but will vary with currency pair).

Thats all I can think of for now.

 

[tayser]

Would equities be considered more of a gamble owing to the increased difficulty in shorting them as opposed to FX?

Equities: prevailing way to make money is only up.
FX: prevailing way to make money is up or down.

food for thought anyhow.

 

[wabbit]

FX trading is extremely easy! Just place an order!

but seriously...

Every form of trading has its pros and cons. FX trading is no different. I like trading FX because I can trade when I want to, but I tend to avoid the times when the market is volatile (when the markets are overlapping each day) as this is just "too scary" for amateurs like me! I prefer to trade in the quieter parts of the day, but I am writing an expert advisor that will eventually trade for me 24 hours per day (within limits) including the volatile times.

Have a look at groups like InterbankFX and many, many others that allow you to have demo accounts. Open a demo account and place a few trades. See how you go. Its actually good fun when you are just playing around learning the markets and how the trading platforms work...

Once you go live, it becomes work...


wabbit

 

[Kauri]

Hard... easy... it's just another commode to trade...
If you follow fundementals,, a nightmare,, in my opinion...
If you anticipate news... good intuition.. or insider.. is needed..
If you trade technicals..well..I don't even know which pair I'm on..
most of the time..
Have my MT4 EA trading on 2 pairs so far..
only about 12 or so left to set up..
I think..
Cheers
..........................Kauri

 

[Kauri]

and as forexeasy.. note... second version... ammendedment 9.. yep I'm a slow learner..

Cheers
.............Kauri

 

[Naif]

Hello..
when i start to learn about forex that was in 2002 and i was veryexciting to start trading. I thought it easy but after i started trading in real account i knew that it is different and its not like it looks.. everyday u will learn new things, and when you think that you finally understand and can expect easily this market then you will fall again.. you must have your own strategy, must improve it, have to learn from your mistakes... need to learn about phsyology, news, technical and fundemental analysis also money management which you can not increase and protect your wealthy without it.

i started trading almost five years ago and i was learning and by the time , i improved alot and afterthat i had the confidence that i will not lose because i know alot about this market, and before 6 months ago i heavily invested most of my money in eurusd and did not care for risk management because i was soo sure that my analysis is correct 100% but i lost and that was a great lesson for me to follow forex rules to make money and be a good trader.

Wish you all the best