FX trading vs Commodity trading vs Equity trading?
i’ve somehow met a lot of people that trade forex. I trade the other 2 relatively well.
I’ve never traded forex before, but after looking at the charts for a few currency pairs, 2 observations:
1. There were many bear traps and other kinds of manipulations, almost as if some large fund / bank was triggering buy signals only to sell out.
2. It looked like there were many algorithms going off.
3. Common indicators didn’t really show much efficacy.
It could just be the particular pairs I was looking at during that point in time, but my impression was that it is a lot easier to make money from commodities, which has much more meaningful trends.
So why do people trade forex?
Do people actually find meaningful patterns to trade off of regularly?
It seems much more difficult.
thanks
3.
Id kind of like an answer to your question as well, as honestly I don’t think that I am the best person to provide an answer. However, I agree with you on your opinion on FX trading, and generally people consider Forex to be one of the more riskier forms of trading out there, perhaps only second the futures/derivatives. I have a similarly low opinion on Equity trading (not equity investing, mind you), stocks do not need to be particularly efficient in the short term (though I would rather trade equity than fore any day)
I would also assume that some of the FX trading is simply hedging against currency risk. I know a number of derivatives like currency swaps are meant to remove currency risk from the equation.
Out of the three, I think that commodities is the best, for precisely the reasons you stated,
Sorry for the kindof crappy answer
-Karmo, economics wannabie
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LikeDislikeWhen trading Forex, you’re trading against the huge financial institutions with banks and banks of traders. That’s gonna be difficult.
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