Is Forex Riskier than Stocks – We will answer this question the long way because we cannot stress enough the importance of having the right education before even risking a single cent on either Forex or Stocks. If you are venturing out to the business world or anything that promises gains or profit, then there is always an element of risk. In general, trading is considered risky by most people because more traders lose money than make money. In fact, 96% of all traders lose money. Hence, the trading world has a bad reputation as a high risk profession.
As the old saying goes, “If you fail to plan, you plan to fail.” Traders lose money because most of them over estimated their trading ability. Most traders enter into the trading world without proper education and understanding. Let’s not even cover risk management because most of them don’t even bother with this. For this type of traders, there is really no difference what they trade. They will lose eventually.
Trading can be lucrative and need to be treated like a business. A pilot does not fly a Boeing 747 without first having to clock up hundreds of flying time on a flight stimulator and smaller aircrafts. The same is true for traders. Trade on a demo account first. Only when profitable then move on to the real thing.
Is Forex Riskier than Stocks?
Now to answer the question directly “Is Forex Riskier than Stocks” there is no real answer to this one. It all depends on the trader. To us, the risk is the same as long as you know what you are doing. Sure – Forex has leverage of something like 400:1 but that serves as a double edge sword. In the right hands, such leverage is a profit magnifier. In the wrong hands, it’s financial disaster waiting to happen.
In fact, we trade both stocks and Forex and we use different strategies for both. We treat stocks more like investment and we buy into the business and enjoy the dividends while Forex is real “paper” trading to generate constant cash flow. If you are considering if you should be a Forex Trader or Stock Trader, then our suggestion is you probably should be both because they are entirely different financial strategies. We have a comprehensive course that covers Stocks, Options, and Forex that will bring your trading to the next level. For more information, learn more here.
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