General Question

andrechan's avatar

Is it safer to trade in forex then in stock?

Asked by andrechan (4 points ) May 23rd, 2009

I am thinking of setting an account with a broker which give option in the instrument that I going to trade. Which instruments is safer to trade on most of the time?

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9 Answers

Jack_Haas's avatar

Currency trading is attractive on paper but it is extremely volatile. Conventional wisdom says you should only invest pocket money in it.

Traditional stock trading still has the best risk/reward ratio in my opinion. Especially now that tthe stock markets are chock full of stocks trading for far less than their real value for someone who’s in it for the long haul.

zaphod's avatar

Your risk would depend entirely on what stock or currency you pick to trade on. Large cap companies would obviously be more stable (unless they’re talking about filing for bankruptcy, of course) when compared to an emerging firm. Same goes for forex – if you trade on currencies that are backed by stable governments, the volatility risk is reasonably low.

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