In this episode of Truth About FX, Walter digs into probably the one of the most asked questions in forex trading: what are the pros and cons of trading live? He talks about the positive and negative aspect of different trading types, in general, and what might be the most beneficial for you in terms of your beliefs and lifestyle.

And do you know what monkeys and bananas have one thing in common with trading and charts?

Download (Duration: 07:52 / 9.00 MB)

In This Episode:

00:42 – not the best

01:18 – training wheels

03:02 – ugly charts

05:50 – tangible

07:13 – great to start

Tweetables:

Leverage is like fire. [Click To Tweet].

Start with share trading.  [Click To Tweet].

Forex charts are beautiful. [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. Here’s a question that somebody wrote in recently. What are the pros and cons of forex trading?

Walter: Well, that’s a big picture to view, isn’t it? I mean, it sounds like someone is getting into trading for the first time. In a lot of ways, I have to say it’s probably not the best place to start trading.

That might be weird to hear that but I actually think that share trading — or stock trading as they call it in different countries — I think that is easier to trade I think because most stock traders are just buying, they’re not selling. That immediately removes half the decision. That makes the decision twice as easy.

Hugh: And complications.

Walter: Yeah. And, they tend to go up like most stocks tend to go up in a rising markets when the markets are really strong, if the Dollar’s strong, the NASDAQ or whatever — the Footsie — a lot of stocks will tend to follow. It’s not always the case but it’s kind of like forex trading with training wheels because you only want to buy.

Typically, it’s easy if the market is really bullish to ride that trend and take a buy out of it. To me, I would say the pros of forex trading is that you have leverage which can of course burn you.

Leverage is like fire. It can cook your food or burn your house down. You’ve got to be really careful on how to use it. You can move a small account to a large amount of money rather quickly with forex trading because of the leverage.

You could also blow up your account and owe your broker money quickly because of the leverage. The pros is you have more leverage typically than you’re going to get in stock trading or share trading. But, share trading is easier because it’s usually just the question is where do I buy and where do I put my stop loss.

I mean, that’s usually the question. Whereas, in forex, it’s “Do I buy, do I sell and where to put my stop loss?” And of course, “How am I going to take profit” and all that comes to it as well and that’s really critical.

I would say that the pros of forex trading and all that, you can trade it at any time.