Is forex trading more profitable than stock trading?

[talhayousuf]

To answer this let’s consider, leverage and margin requirement for both. Leverage is higher in FX, in the US it is 50–1 in the UK and Europe it as high as 1000–1. These leverage ratios make FX appear to be very profitable as you can make money on a large amount of burrowed liquidity. This high leverage and implied volatility means that you will still need a lot of capital to truly take advantage of the leverage. In stocks there is no leverage so you need the cash upfront, this creates a barrier to entry. If you wished to buy Boeing stock you can buy 1 share for a little over $100, if you wanted 1000 shares then you need $100,000. You can however trade stock CFD’s but these are rare with many retail brokers. Stocks are more volatile so the profit potential is higher. As an example I purchased Cosan shares (CZZ) at $2.83, they are now worth over $5 a share and that was under 3 months, so a 100% return in under 3 months. This is not really feasible in FX, volatility is just not the same but none the less this can be done if you trade Option derivatives for example.

At the LiveTraders.com we talk a lot about PROFITS AND LOSSES. If you are interested in Live Trading and other forex trading methods then take a look at the LiveTraders.

 

[doss]

if you have the right system and money management both can be profitable

 

[deryas19]

indices pay more than the forex

 

[talhayousuf]

if you have the right system and money management both can be profitable

yeah right you are

 

[Chee Wee Tan]

They are two different market altogether. both can make a lot of money and can lose a lot of money. You need to have an edge to win. So choose the market which you have an edge in

 

[george cuyno jr]

protect the capital is important for this matter. trade only of what capital are you willing to lose

 

[webertt]

safety first man what do u say for this?

 

[Wikus]

Do your own research and make your own decisions regarding where to invest your money wisely, both have upsides and down sides.

 

[Alex1055]

It depend on money managment,on forex(CFD),you can empty acc.very quick,

 

[Hugo Berg]

If you want to be a trader – trade on Forex.

If you want to be investor – buy shares.

 

[Benny G]

indices pay more than the forex

This is true, but requires more capital too.