According to experts, the Russian traders prefer to work in the foreign exchange market as more favorable to them. Meanwhile, the stock market and can offer no less favorable trade practices.
Old love
Historically, foreign exchange market more attractive for Russian traders, rather than futures market, much less the stock market. This situation is largely due to strongly enhanced in the minds of Russians believe that almost any man in his time in the kitchen okunuvshiysya items of exchange and checks Vneshposyltorga (if anyone still remembers, and such), is able to correctly and competently assess the prospects movements of currency pairs in the world market.
Perhaps, the most popular foreign exchange market due to strong pressure on the consumer (in this case, the potential client) of the brokerage firms of all kinds, ranging from quite odious, pochivshey in 1995 IFTN, and ending with today's more or less civilized brokers inside and outside camps borders. The aim of this paper is not an analysis of the activities of brokerage firms - have already written a lot. Our task in the other - try to analyze all the pros and cons of currency trading, compared to trade in shares.
1. Leverage
A long time, the currency market was especially attractive to traders through the use of so-called margin leverage, in other words, a sort of credit leverage. Leverage allows you to use when trading amounts to a few tens (sometimes hundreds) times higher than their own funds. This fact at first to warm up much interest in the foreign exchange market. Stock, the market until recently, offered the maximum intraday trade on the shoulder of 1: 4 and transfer the positions require a minimum of 50% of its value. Thus, the obvious indisputable, at first glance, the advantages of trading in the foreign exchange market. In fact, these benefits constitute a two-edged sword - the opportunity to maximize profits in this case translates into a very high probability of losing equity. But that's not the essence - in recent years, many Western and Russian brokerage company began to offer trading in the stock market with the use of leverage (with the use of contracts for the price difference - CFD), similar to that used in the foreign exchange market, but smaller in size . And taking into account the ratio of leverage and the volatility of the stock market, this fact must be more to increase interest in the shares, rather than margin for FOREX.
2. Predictability
To say adherents of fundamental analysis, technology today is ranked first when deciding on the deal on the market. In terms of technical stock market predictability, in our view, can score a hundred Handicaps currency. Indeed, most of the methods and principles of technical analysis developed specifically for the stock market (and, of course, for merchandise), and if we recall that the currency market - the youngest of the current, it becomes clear our assertion concerning the predictability. Moreover, the foreign exchange market because of its globality is not always possible to examine the application of technical indicators correctly. In fact, under a single currency market has the sense to understand a few significantly different currency sessions - European, American, Asia-Pacific. Because of this division use the same indicators may not lead to the desired result. When you trade the same shares, whether American or European corporate securities, the trader is always tightly bound to the session. And it is strictly fixed beginning and end (except in very rare cases of force majeure).
3. Versatility
Under the flexible here refers to the opportunity to do trade in the market the main occupation. So you can have your own business (or work) and in their spare time to trade in the market. Those who tried to do the same in the foreign exchange market very quickly realized that this was impossible, because the non-stop nature of the market leads to the need for a permanent presence there. In effect described in paragraph 2, it causes the stock market allows you to combine trade with other classes. Although I would like to note that the market - this is still lot of professionals.
4. Ability to hedge positions
Often you can hear what the sessional nature of the stock market does not allow time to fix the result, or to cut losses. This is true, but only partly. It is no coincidence that at the very beginning of this article, reference was made to the futures market, which, in our view, could serve as almost ideal instrument insurance open positions in the stock market. This is due to the same round-the-clock trading in futures markets. Moreover, for traders who are looking for an opportunity to insure their futures, there is a great opportunity - traded on the stock market share contract for QQQ, which is actually the equivalent of NASDAQ. Naturally, and currency and stock markets have their adherents and admirers. I do not aim to tarnish the currency market and gloss stock, but, as stressed in the beginning of the article tried to compare the pluses and minuses of trading on any stock exchange or off-site.
Old love
Historically, foreign exchange market more attractive for Russian traders, rather than futures market, much less the stock market. This situation is largely due to strongly enhanced in the minds of Russians believe that almost any man in his time in the kitchen okunuvshiysya items of exchange and checks Vneshposyltorga (if anyone still remembers, and such), is able to correctly and competently assess the prospects movements of currency pairs in the world market.
Perhaps, the most popular foreign exchange market due to strong pressure on the consumer (in this case, the potential client) of the brokerage firms of all kinds, ranging from quite odious, pochivshey in 1995 IFTN, and ending with today's more or less civilized brokers inside and outside camps borders. The aim of this paper is not an analysis of the activities of brokerage firms - have already written a lot. Our task in the other - try to analyze all the pros and cons of currency trading, compared to trade in shares.
1. Leverage
A long time, the currency market was especially attractive to traders through the use of so-called margin leverage, in other words, a sort of credit leverage. Leverage allows you to use when trading amounts to a few tens (sometimes hundreds) times higher than their own funds. This fact at first to warm up much interest in the foreign exchange market. Stock, the market until recently, offered the maximum intraday trade on the shoulder of 1: 4 and transfer the positions require a minimum of 50% of its value. Thus, the obvious indisputable, at first glance, the advantages of trading in the foreign exchange market. In fact, these benefits constitute a two-edged sword - the opportunity to maximize profits in this case translates into a very high probability of losing equity. But that's not the essence - in recent years, many Western and Russian brokerage company began to offer trading in the stock market with the use of leverage (with the use of contracts for the price difference - CFD), similar to that used in the foreign exchange market, but smaller in size . And taking into account the ratio of leverage and the volatility of the stock market, this fact must be more to increase interest in the shares, rather than margin for FOREX.
2. Predictability
To say adherents of fundamental analysis, technology today is ranked first when deciding on the deal on the market. In terms of technical stock market predictability, in our view, can score a hundred Handicaps currency. Indeed, most of the methods and principles of technical analysis developed specifically for the stock market (and, of course, for merchandise), and if we recall that the currency market - the youngest of the current, it becomes clear our assertion concerning the predictability. Moreover, the foreign exchange market because of its globality is not always possible to examine the application of technical indicators correctly. In fact, under a single currency market has the sense to understand a few significantly different currency sessions - European, American, Asia-Pacific. Because of this division use the same indicators may not lead to the desired result. When you trade the same shares, whether American or European corporate securities, the trader is always tightly bound to the session. And it is strictly fixed beginning and end (except in very rare cases of force majeure).
3. Versatility
Under the flexible here refers to the opportunity to do trade in the market the main occupation. So you can have your own business (or work) and in their spare time to trade in the market. Those who tried to do the same in the foreign exchange market very quickly realized that this was impossible, because the non-stop nature of the market leads to the need for a permanent presence there. In effect described in paragraph 2, it causes the stock market allows you to combine trade with other classes. Although I would like to note that the market - this is still lot of professionals.
4. Ability to hedge positions
Often you can hear what the sessional nature of the stock market does not allow time to fix the result, or to cut losses. This is true, but only partly. It is no coincidence that at the very beginning of this article, reference was made to the futures market, which, in our view, could serve as almost ideal instrument insurance open positions in the stock market. This is due to the same round-the-clock trading in futures markets. Moreover, for traders who are looking for an opportunity to insure their futures, there is a great opportunity - traded on the stock market share contract for QQQ, which is actually the equivalent of NASDAQ. Naturally, and currency and stock markets have their adherents and admirers. I do not aim to tarnish the currency market and gloss stock, but, as stressed in the beginning of the article tried to compare the pluses and minuses of trading on any stock exchange or off-site.
Eugene Rybachuk
1 comment:
Forex Trading is very hard to understand.
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