Monday, June 9, 2014

Stock Trading vs Forex Trading, Which Is Riskier?

Stock Trading vs Forex Trading
Last weekend, attended a wedding lunch of a soccer game friend, while on the way home, inside the MRT train, gone into a constructive debate with another soccer game friend. The topic in question is : Stock trading* vs Forex trading, which is riskier?
Being newbie in stock trading and completely zero knowledge on Forex trading, I have the impression that Forex trading is riskier than the stock trading (in view of its volatility), but my friend beg to differ. He is involved in both stock and Forex trading (but more active in the latter in the recent months), he viewed that the risk level of both instruments are almost the same but Forex trading has the upper hand as it needs smaller size of capital.
Following are some of our debating points :
Me : "For stock, we can assess the financial health of a company but the same cannot be said for Forex"
My friend : "Not true, for Forex, you are actually evaluating the economic health of a country, so there is still a basis of assessment and comparison"
My friend countered :
My friend : "Forex trading can be done with smaller capital (in hundreds) and the commission per trade is not as high as stock trading"
Me : "....." (I can't argue with this point as I have no knowledge in Forex trading)
I countered :
Me : "For Stock trading, I can actually focus on dividend investing and trade on those dividend stocks with high dividend yield"

My friend : "Forex trading do also provide interest returns which is equivalent to the dividend in stocks"
Of course, at the end, we agreed to disagree (with each others' viewpoint).
Are you involved in both the stock and Forex trading? What is your view and rationale on the following?
Stock Trading vs Forex Trading, which is riskier?
*Stock trading here refers to investors whom are trading and not investing i.e. focus in on short term gain and NOT long term returns.


  1. Only when you lose money then it is risky. Do whatever you want but just don't lose money. LOL!

    1. Uncle 8888, Hahaha, what a wise advice! Any tips to be the in the "don't lose money" league ? lol

    2. Tip?

      Sure have!

      Donate $2.7m like Andy Chua to have lunch with Warren Buffet.

      Learn from Buffet himself his two rules during the lunch.


    3. Uncle 8888, u win! But can I lim kopi with you with $2.70 kopi and get some tips instead? hehe

    4. I have no tips so no bidding.

      Tips? Go to the coming investment event for more tips and tricks. Bring your wallet, CC or ATM card with you.


    5. Hahaha... Which specific investment event are you referring to? ;-)


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