Why do great financiers not like to trade Forex?
More than once reading the stories of traders, you come across the fact that almost none of them trade on the Forex currency exchange.
Yes, every financier deals with currencies, but the main bet is always placed on other markets.
Why is it that huge fortunes are mainly made on the stock or commodity exchanges, and you almost never see a billionaire who made a fortune on Forex?
Perhaps, indeed, the foreign exchange market is intended only for transactions with currencies necessary to support the company’s activities and is not entirely suitable for speculation.
Stock market – it is much easier to make long-term and medium-term investments here, since you can calculate the real value of a company’s shares taking into account the value of its assets.
It is also quite possible to predict the financial result based on information about the company’s work. And the publication of financial results directly affects the share price.
An important role is also played by the fact that on the stock market the price changes not only for individual shares, but also for entire segments of the economy. For example, if in general there is a development in the IT sector, then most companies operating in this industry will rise in price.
In addition, there is an opportunity to make transactions not only with shares of companies, but also the opportunity to purchase bonds, and they provide stable profits on long-term investments.
Commodity markets - where everything is even simpler, that is, simpler for those people who have been trading on the commodity exchange for several years.
Moreover, we are not talking about transactions with oil, since the price of oil is not particularly constant and predictable. And about trading in assets such as beans, coffee, cotton, grains, the prices for which are more predictable.
Therefore, a person who knows what affects the price of wheat and what seasonal pattern is being monitored can quite accurately determine the trend.
Of course, not everything is so simple on the commodity exchange; there are a lot of nuances in trading, for example, the same expiration dates for contracts, but still everything is more predictable than with exchange rates.
Commodity exchanges are most often used to make money on medium-term transactions.
Opening hours - unlike forex, which works 24/5, and for cryptocurrencies 24/7, stock and commodity trading have certain opening hours.
That is, they leave time for rest and mental reboot if trading is your main activity.
In fact, the only advantage of Forex trading is the large leverage that allows you to make money on short-term transactions. Therefore, most beginners choose this segment of trading in the hope of making quick money. In addition, the simplicity of the trade itself is captivating at first. But professionals still prefer other markets.