stocks vs forex which is better online investment?

hello DP
i 'm a webmaster run some websites and my business is doing fine
and i have some money i want to invest iy on online business other than websites
i really very newbie to the world of stocks and forex i don't even know how both work
i'm ready to learn and read a tutorial or a book about one of them
but i want someone to just guide me to the better
and i'm not american but i'm interested to buy some stocks of an American company is that possible for non American...
and if yes how that
best regards,

 

i just started using forex, i like that you have fake money to learn...and i dont think stocks have that.

 

But trading with fake money is like playing football game on computer. If you are good at the computer game it doesnt mean you will be good live and with real money its a different ball game all together. However I would suggest stocks as your loss on investment (if it happens) would be less and you can have a good steady growth in profit. However you need to make sure that you are buying into to a good and stable company. There are also other factors you need to consider like true value of the stock,
company growth, news regarding the company etc stuff like that. But I would still say that stocks are a better option than forex.

 

This industry is very complicated. If you are not ready to spend 3-5 years living stocks/currencies, you are better off just leaving these things to investment banks or other institutions. Do not waste your time.

 

you will earn much more in forex trading if you know what to do but forex trading is more risky also than stocks

 

i just want to invest the money in my pockets i don't like to give my money for banks and they invest in my behave

i 'll start reading about stock investment hopeing to get to know the basics

 

You cant "invest" in forex. but you can start trading forex to get some experience in trading. It is easy to start and you don't need a lamp summ in the begining.
Start with a $100 micro account...

 

Some of the other advice is good but I thought I would chime in. The stock market is very complex. Most people think you can just put in some money and all of a sudden make money for nothing. This is definitely not the case in the stock market and the Forex market is even more difficult. Unfortunately it does not work this way except if you invest in index funds and plan to hold for 5-10 years+ in which case you will most likely earn a market average return of about 10%. 95% of people that get involved and try to time the market lose money. This includes the so called professionals that work for mutual funds.

Fortunately it is possible to learn to make money in the market but you must learn to trade stocks, not invest in stocks. You also should not try to jump right in immediately. You must educate yourself first and find a strategy that works. Besides news events such as and earnings announcement or a merger, etc., stocks and the forex markets move off something called technical analysis. There's thousands of books written on this subject however the problem is basic technical analysis no longer works like it did 20 years ago. For the most part what you read about will cause you to lose a lot of money.

I personally trade penny stocks for a living. Penny stocks are very risky in general, much more so than higher priced stocks but I started trading in 2004 and have devised a technical trading strategy for making money in the penny stock market. The thing about penny stocks is that you get to compete with two groups of people since trading is like direct hand to hand combat because you are trying to take money from somebody whom is less informed than you. (1.) the general public who are most likely uninformed individuals that have no clue, kind of like yourself (no offense). 2. The smart money a.k.a institutional traders and large money managers like hedge funds that deal with lower priced stocks. You can't compete with the latter group, but you can learn to profit off the suckers in the first group as I have.

To learn you either need a mentor or you need to find someone with a legitimate strategy. 99% of the people that offer products for sale on trading do so because they can not make money trading for themselves. I would not suggest purchasing anything about learn to trade unless you are sure the information is coming from somebody that knows what they are doing. I can give you more information about how to learn. Try to pm me.

 

@beatstockpromoters so you are saying that trading is a better option than investing and its less riskier?

 

If you are talking about a few hundred dollars or thousands bucks it does not matter. You will probably lose it either way if you do not learn how to trade or invest first. If you are talking about a larger sum of money it really depends on something called risk management or money management. Successful traders use stop losses to limit their risk. Novice traders do not stick to their stop losses and lose more than they planned to risk. Investors don't use stop losses in general and just hope that the market will go higher and there stock will rise with it, or hope that they analyzed the numbers correctly and the company will beat analysts expectations for earnings numbers, sending the stock higher. It's a lot more difficult to choose the direction of a stock as your length of time decreases however you are not going to lose all your money or half your money in a few hours or a couple weeks if you are wrong on a trade (other than if you hold through earnings announcements). But if you invest that means you will hold for months or years and stocks make much larger price movements during this length of time.

The bottom line is if you think you are going to just throw some money into the market without any research and a solid understanding of what the market really is, you will be disappointed. Making money in the market beyond the average market return is one of the most difficult things to do in life, but if you spend the time to really learn, it can be extremely gratifying and lucrative.

 

That's true, you cannot trade or invest without a bit of knowledge but what I would prefer is investing cause to trade you need more knowledge. Also when trading you would not know how the bigger fishes would make game plays to eat off the smaller and less knowledge able fishes and most of the times you would not know when to buy or short. One thing for sure when trading if people dont have the stomach to take losses then they should not even bother to try because trading is always riskier.

You can at least invest in some good companies whose downside risk is very very less. You might not be able to make rapid money but yes that actually a more safer thing to do.

 

Definitely FOREX! Its less riskier, just study the basics and practice on demo first. Forex is not risky, its just for newbies who can't trade and leverage the hell out of it. If a broker offers you a leverage 1:100, it doesn't mean you have to use it! Even the best trader in the world would blank the whole account within few hours leveraging 1:100. Start with 1:1, then you are at the same risk level as with stocks, but forex is much more predictable, because you will never know real company results, stocks are even more manipulated than forex, all the "official" stats companies show to people are a joke. The real numbers never leave the company...so you never know if tomorrow isn't the company's last day, no matter how big it is.

 

Forex is all about leverage, if you leverage right, the trade can go totally in the opposite direction, but you still only lose 1% of your account or even less. If people come as newbs and leverage 1:50, 1:100 or even 1:200, they will lose all their money in no time. I know, I did it before. But thats how it all works...the experienced traders simply take the money off the newbs, in forex, somebody has to lose money for you to make money, obviously.

Simplest way to make money is to read the forex forums, check what most people trade and then do the exact opposite.

 

Investing in stock doesn't mean you're buying today and selling in a month. That kind of investment, day trading nonsense, results in losses.

Investing means you're ready to throw your hat in and become part owner of a firm.

If you want to buy and sell a lot for profit, go into Forex or commodities. Have fun betting on bacon in the next 6 months.

 

Traditione you probably should get the facts correct before you post something. Day trading is the by definition opening a position some where between 8:00 AM and closing the trade some where by 6 pm on the same day (potentially 8 pm if your broker allows electronic trading past 6 pm). Holding a position for a 2 days to a month is called swing trading, and holding a position for several months is called position trading. Scalping is the term given to short term day trades of a couple seconds to a few minutes. Higher frequency traders fall under this category

As for investing there are various types of investment. The people that are most successful use advanced fundamental analysis and quantitative models to develop diversified portfolios. If you invest in one stock that isn't a Blue chip company like Walmart, Mcdonalds or Berkshire Hathaway, etc, there is always a chance you can lose your entire investment if the company goes bankrupt and as we saw in 2008 there's a sizable chance that blue chip companies like Bank of America or City Group to also go under, although our new modern socialist government is now on your side. In general you need to own at least 15 stocks to be diversified and even then you still could end up losing money if you choose companies with poor fundamentals. Don't try to let clowns like Jim Cramer fool you into thinking you can own jst 3-5 companies and be diversified. Stick to stocks with positive earnings, positive free cash flow, low P/E ratio's, and low P/S. I personally am a trader, but I worked as an analyst for a small billion dollar money management firm, so I have knowledge of how these type of companies attempt to generate alpha through longer term investing.

 

@Traditione you are absolutely right, people think day trading or buying and selling often will make them money big time and in a very short period of time. Forex and commodities are not for small fishes. They just dont seem to understand it.

 

@beatstockpromoters so you are sure in forex that the people wont lose as much money. Ex say I had bought INR in 2008-9 when US$ was around 40 or less you think I would have made profit? Or even now if I had do the opposite it would be good?

What Traditione is trying to convey is in stocks even if your stock value goes down a bit you always have time to recover but what about forex or commodities time frame? After which you will have to bare the loss.

 

forex investment is gettin more and more popular these days and i think forex trading is more advance and better these days.

 

Forex is not safer than stocks. Also in general Forex does not trend well. It chops are around and goes back and fourth. Forex basically is for trading, not investing. In the forex markets you can't just go to an exchange and purchase currency. They only allow banks to deal with currency since they can buy or sell large quantities, so you have to use a forex broker. Unfortunately this is not the same as in the stock market where you can be paired against another individual on your trade or investment. In the forex market you go up against your broker. Now considering dealing in forex is there business its pretty logical to realize they bank or broker you use will not stay in business if they allow individuals like you to take their money. Forex is a leveraged security so you are using borrowed money no matter what because currency is a standardized product. (For example:

Standard 100,000 Base Currency Units
Mini 10,000 Base Currency Units

This means if you want to trade 1 standard contract you will control 100,000 units of currency, for instance $100,000 EURO/USD. A mini contract would cost $10,000. The dangerous part is you don't have to put up $100,000 or $10,000 of your money. You can borrow $90,000 and put up $10000 or $9900 and put up $100. Since you are essential controlling a lot more money than you own, your are trading on leverage and your profit or loss will be magnified. It is much safer if you were to put up the whole amount or most of it and only use 1:1 or 2:1 leverage but forex brokers allow you to gamble with 500:1 leverage (This means you put up $20 and control $10000.) When you borrow money you put up margin. The margin requirements are different from broker to broker but in general you put up for instance a certain percentage of what you want to borrow and if the amount of "equity" in your account drops below a thresh hold level, you must put more money into your account to bring it back to the original maintenance margin level. If you do not they will close out your trade and you will suffer and immediate loss. In the stock market you can also trade on leverage the same way (2-4x leverage is the max unless you use a proprietary trading firm in which case 20:1 is offered), but you do not have to. This is why Forex is much riskier than the stock market.

 

thank you beatstockpromoters i want to invest not to tread so i think i'll read more about stocks and i'll try to invest small money firest n see how it works
thanks for your time to type such lines to explain the Forex vs stocks