What has the most risk: Stock trading, forex or…roulette :)?
Well, apparently there is some element of "gambling" in the stock exchange/forex, but still such events are considered to depend on economical events…so fundamental analysis + technical should help you. I guess, the biggest mistake would be trading on margin/ or at least high such.
Speaking of the gambling itself, it’s really hard to predict the outcome of a random event, if not totally impossible, but still the gambler could make decisions based on static events, rather than just watching how her/his money are getting down, due to unfavorable trend…
Last, but not least, one can’t predict economical events such as a large bank buying huge amounts of EUR/USD, thus changing the trend.
I was even thinking on how to apply, paradoxes such as Parrondo or St. Petersburg in the stock trading, but the logic behind them leads me to negative conclusions.
my opinion?
Start with gambling -> forex on low margin -> stock indices(again low margin, if any).
Thanks!
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Roulette is riskiest because over the long term you always loose to the house.
Forex is the next riskiest because currency trading is so much more complicated then regular stocks.
Stocks have the least amount of risk among your three choices but are still very risky.
To an economist, roulette has no risk. Roulette, as played in most Las Vegas casinos, has a house advantage of 5.35%. Over a large number of tries, you will pay $5.35 of every $100 bet. No uncertainty = no risk.
Forex is riskier because of the leverage involved. You could reduce this by converting your money and depositing it into a foreign bank. No leverage. On the other hand, currencies tend to trend more than stocks do. Your strategy will determine the risk. There is more than one way to trade forex and there is more than one way to trade stocks. Your example of "a large bank buying huge amounts of EUR/USD, thus changing the trend" won’t happen. The EUR/USD market is so deep that no one order will change anything. Note: this would be a technical market event, not an economic event.
They are two different concepts. In investing there is underlying value in your investment. You have equity. There is no underlying value in roulette and now ownership or equity. Gambling is all or nothing. You win or lose what you bet, with no chance of recovering that money, except by betting more. In investing you may lose all, or some temporarily with an opportunity of recovering your loss, and gaining more, without investing more. Also the expected return in investing is positive Expected return in gambling negative. Of the two investments though, forex carries the most risk.
Try to always look for the competition rank, offer competitive prices against the ones that are selling the same clothes, offer deals, combined shipping and be able to attract more customers with these types of things.
http://hubpages.com/_yaans/hub/Tips-for-ensuring-a-successful-ebay-sale_1
All three can be equally risky, when your bets depend on chance only. It’s possible to improve you odds of winning through money management. But in the long run, chances are good that you will loose everything when you depend on luck only.
In stock trading and forex it’s possible to improve your odds through research and extensive knowledge of the economy and the markets. But stock trading probably can benefit more from such research and knowledge than forex. Because currency exchange rates are more often manipulated by governments and financial institutions than are stock prices. And such manipulations quite often are unpredictable.
Stock trading can be less risky than both the roulette and forex, provided that you do your research and choose your stocks well.