Forex or Penny Stocks?

TODA.1

Newbie
6 0
Guys, my situation is as follows;
Small account, c.$5k.
I am very willing and able to invest my time to learn and practice.
Academically very sound, can pick up new concepts quickly.

In terms of growing a new account, which of either Forex / penny stocks, bearing in mind my account size would be the best option?

Kind regards!
 

timsk

Legendary member
7,348 2,139
Guys, my situation is as follows;
Small account, c.$5k.
I am very willing and able to invest my time to learn and practice.
Academically very sound, can pick up new concepts quickly.

In terms of growing a new account, which of either Forex / penny stocks, bearing in mind my account size would be the best option?

Kind regards!
Hi TODA.1,
In some regards, they are equally risky markets to trade in as much they both require high leverage multiples to take advantage of tiny price movements. Take a look at the plethora of threads here on T2W started in the aftermath of the SNB fiasco from the week before last to find out what the implications of that are regarding forex. On the penny stocks front, even if your holding doubles in value from say, $0.10 to $0.20, you will still have $0.01 spread which accounts for 10% of your profit and then you have to find a buyer for your shares as they hit fresh highs. No prizes for guessing what happens to the price when you (along with everyone else) tries to offload tens - or hundreds - of thousands of shares of a stock that no one really wants - other than a handful of penny stock enthusiasts like you. Penny stocks are (in)famously illiquid, meaning that even though the price has gone up 200%, 300% or whatever - managing to sell them to realise the gain is next to impossible. If you want to take a wild punt and are prepared to lose all your money - you might just get lucky. Personally, I'd play the lottery.

Of the two, most members would probably counsel forex in favour of penny stocks. I'd say go here and consider if there are other options which might suit your trading objectives and personality better: Which Should I trade - Stocks, Futures or Forex etc.?
Tim.
 

Atilla

Legendary member
19,443 2,875
Hi TODA.1,
In some regards, they are equally risky markets to trade in as much they both require high leverage multiples to take advantage of tiny price movements. Take a look at the plethora of threads here on T2W started in the aftermath of the SNB fiasco from the week before last to find out what the implications of that are regarding forex. On the penny stocks front, even if your holding doubles in value from say, $0.10 to $0.20, you will still have $0.01 spread which accounts for 10% of your profit and then you have to find a buyer for your shares as they hit fresh highs. No prizes for guessing what happens to the price when you (along with everyone else) tries to offload tens - or hundreds - of thousands of shares of a stock that no one really wants - other than a handful of penny stock enthusiasts like you. Penny stocks are (in)famously illiquid, meaning that even though the price has gone up 200%, 300% or whatever - managing to sell them to realise the gain is next to impossible. If you want to take a wild punt and are prepared to lose all your money - you might just get lucky. Personally, I'd play the lottery.

Of the two, most members would probably counsel forex in favour of penny stocks. I'd say go here and consider if there are other options which might suit your trading objectives and personality better: Which Should I trade - Stocks, Futures or Forex etc.?
Tim.

Agree totally Tim,

I spoke to my aunt Marjorie and she suggests try doing all three for a get rich quick scheme.

Alternatively, get a real job and work your socks off - educating yourself in the art of gambling in the financial markets over time.

I'd know what I would do. Go and spend my £5K on a good pair of socks. (y)
 

Jack o'Clubs

Experienced member
1,554 342
Forex. If you don't know what you're doing, you'll at least lose your money more slowly there.
 

CityMasterTrader

Member
77 2
Guys, my situation is as follows;
Small account, c.$5k.
I am very willing and able to invest my time to learn and practice.
Academically very sound, can pick up new concepts quickly.

In terms of growing a new account, which of either Forex / penny stocks, bearing in mind my account size would be the best option?

Kind regards!

It’s up to you. I used to trade Forex but found it too volatile so started to look at individual stocks.

It’s your choice really as everyone will have their own opinions/preferences.
 
 
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