Not sure about trading stocks vs Forex? This video shares 6 reasons why I have switched from day trading the US stock market, to day trading the forex market.
Starting out day trading can be very confusing at the beginning. With so many options to choose from, it can be overwhelming to know where to start. I started day trading the US stock market about a year ago. Whereby I traded the stock market as there was a lot of volume and trading opportunities. However, to start day trading the stock market requires quite a lot of money in your account. If you want your account to survive the many fees and commissions.
Read on because, in this article, I share why I have switched from day trading the US stock market, to day trading the Foreign Exchange market. Which is also known as Forex.
6 Reasons Why I DAY TRADE The FOREX MARKET
Please note: This article contains affiliate links.
As a beginner trader, I have been in the world of trading the stock market for only a few years and I love it. Previously a Warrior Trading student, I carried out the Pro class with Warrior Trading, and I focused on learning to day trade penny stocks, aka small caps stocks.
This video shares my personal day trading journey and why I have switched from day trading the US stock market, to trading the Forex market. In this video, I share 6 reasons why I have decided to day trade the Forex market. Along with why I feel that it is more accessible for a beginner trader, to day trade the Forex market.
6 Reasons Why I DAY TRADE The FOREX MARKET- Script
If you don’t know me, my name is Emily from the channel Mindfully Trading. I started trading with Warrior Trading in 2018, day trading the stock market. I share videos on YouTube sharing my journey becoming a successfully profitable trader. If you want to follow along my journey, don’t forget to hit that subscribe button.
1. The Forex Market Is More Cost Effective For Beginners
Firstly, I find the Forex market much more cost effective as a beginner trader, than the stock market. As a beginner, I started with a small account, about £1000. I started trading stocks with the broker TradeZero. The main issue I experienced was with funding.
To begin with, Tradezero charged me a fee for depositing money into my trading account. Following that, I was charged monthly commissions from Tradezero, which equates to around $80 per month. As a beginner trader with a small account and using low risk, it takes time to grow the account. Therefore these commissions had a big impact on my account. In addition, I was getting charged commissions per trade.
E.g. buying 1000 shares cost $4 in commissions, and selling 1000 shares cost $4 in commissions. Which also means smaller wins and bigger losers.
Finally, Tradezero also charges for withdrawing money from a trading account.
In contrast, with Forex I find it very cost effective as a beginner because I can deposit money into my account free of charge. Also I am not paying any monthly commissions. Furthermore I do not pay any commissions per trade, I only pay the spread of the trade.
2. Long or Short
What I love about trading the Forex market is that I can either go long or short for trades.
With Tradezero, although they allow you to short trades, shorting is only limited to a certain number of stocks. In addition, you need to reserve your shorts and also pay for short locate fees. I find this quite long winded and restrictive.
Whereas Forex gives a lot more flexibility and it is a simple as buy or sell, go long in a trade or short.
3. Flexibility
I find it much more flexible to trade Forex, as the Forex market is open 24 hours per day, 5 days per week.
Whereas the strategy that I learnt for trading the stock market meant trading the open, which is 9:30-12:00 EST. Which for my time period is 14:30-17:00 GMT. Also, with Forex, there are different time frames available to trade. These are;
London: 8:00 -17:00
New York: 13:00 – 22:00
Pacific: 22:00 – 7:00
Asia: 00:00 – 9:00
Consequently, I have been trading the London breakout which allows me to keep a better time schedule day trading.
4. More Trading Opportunities
Although the stock market can be extremely volatile and can certainly provide trading opportunities. There are times when the stock market can be quiet such as in the summer months. This can be quite a slow difficult time to trade due to the lack of volume.
Whereas with the Forex market, I find that currencies are constantly moving, which provides consistent trading opportunities.
5. Better Software
An important point for me in trading Forex over stocks is the software. I have been using the MetaTrader 4 platform with the broker Oanda, and it is brilliant. Metatrader is a white label software, used by many different brokers. Which is why, in my opinion, it is so efficient, because it is kept updated.
It allows you to carry out many different orders such as; buy, sell, stop, buy limit, sell limit etc.
MetaTrader allows you to set both a stop and a profit target, which makes trade management much more effective. Metatrader also provides charts, however, I prefer to use TradingView for chart analysis, as they have much more drawing tools and a better interface.
In addition, MetaTrader is also available to use on mobile, which makes it easier to manage trade on the go or longer held positions.
6. Easier Account Management
This links with point 1 regarding account fees, whereby I personally had to use TradeZero for trading stocks, which are a broker based in the Bahamas. This was because they were the best broker available for non-US residents under the PDT.
In addition to the fees involved with depositing money into that trading account, I also had a time issue. As I had to arrange an international payment transfer, this was quite a process.
Whereas with trading Forex, I use a broker based in the same country as I am. Which means that it is a lot quicker for me to transfer funds to and from my forex trading account. In addition, my trading account is the same currency as my personal account and I can make transfers which arrive on the same day.
Furthermore, withdrawing from my trading account is just as easy, as well as it being free which is a huge bonus.
6 Reasons Why I DAY TRADE The FOREX MARKET- Conclusion
These are my personal opinions but I hope they help you out. If you are new to trading and you are not sure where to start, then I would certainly recommend considering the Forex market. Here is a link where you can trade forex for free in a demo account.
A summary of 6 reasons why I day trade the Forex market:
- The Forex Market Is More Cost Effective For Beginners
- I can trade Long or Short
- Forex Market is open 24/5
- Volatile market
- Better software
- Easier account management
TRADING RESOURCES
💻 TRADING LAPTOP – https://amzn.to/2Xyp1If
💻 PORTABLE TRADING SCREENS – https://amzn.to/3e7LUI2
FOLDING STAND FOR SCREENS – https://amzn.to/2JQsJER
TRADING SOFTWARE
TradingView | The BEST trading CHARTING platform I use – http://bit.ly/2lYrmeI
TRADING BOOKS
MASTER Trading Psychology – https://amzn.to/3cpilks
Trading in the Zone by Mark Douglas – https://amzn.to/33FihJp
How to Day Trade – https://amzn.to/2UuzPUC
CANDLESTICK TRADING BIBLE – https://bit.ly/2JG1rAY
FURTHER READING
How to find the best stocks for day trading
Trading View Tutorial for beginners
Day Trading Setup for Beginners
I hope you found this article useful!
