which is more difficult to do and less of risk, stocks or currency trading?
Saturday, July 18th, 2009 at
7:27 am
Fred R asked:
my friend went to a 1 hour workshop to learn this, was he scammed on to believe that its so easy to do this?
my friend went to a 1 hour workshop to learn this, was he scammed on to believe that its so easy to do this?
Tagged with: Currency Trading • Risk Stocks • Stocks Trading
Filed under: Forex
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Currency trading is extremely risky. Far more risky than stocks.
The main reason is that all currency trades use leverage – like options, where a small amount controls a big amount. So you can make many times your investment – or lose many times your investment.
I strongly suggest that you do not consider currency trading. You can go totally bankrupt within a few days if the trend is strongly against you.
You can also use leverage in stock trading, but most brokerages do not allow inexperienced people to do that, so there is at least SOME protection.
Currency trading can be very risky. Over the course of time stocks have been a pretty sound investment if you are looking for the long haul. Currencies are volatile. The value changes drastically daily. So many little things can cause a big change. Yesterday the Fed said that it would not be lowering interest rates for a while and the dollar went up right away. A foreighn government in turmoil or a natural disaster can devalue the currency almost immediately.
Both are risky but currency trading is riskier because it is using margin.