Forex vs stocks

[darvas_trader]

Is forex more suitable for TA than stocks? Why? I would like to hear the opinions of experienced folks who have dabbled in both and have tried to apply TA to both. How do you deal with the absence of volume information in forex?

 

[Rhody Trader]

TA is equally applicable to both markets. Chart patterns are chart patterns. Indicator readings are indicator readings. You could use futures volume as a proxy in the forex market, but I think most folks just skip it. I personally use comparable methods when trading both markets.

 

[darvas_trader]

Thanks for your answer. I am especially curious that because of the liquidity and the scale of the forex market do you find that swings are less fickle than in stocks where you have small parties with vested interests controlling factors like news, upgrades, naked shorting, bear raids etc?

 

[Rhody Trader]

Exchange rates trade more akin to the way equity indices do in that micro elements tend not to have much impact, but macro ones certainly do. You don't have the potential of big player/small market manipulations in forex, but then in stocks you don't have central bank intervention.

 

[darvas_trader]

yah but they still come out on predictable dates, at least (isn't it?). I haven't traded forex yet but my experience with technicals on stocks shows that individual stocks are very often guided more by extraneous unpredictable events than support resistance, although I must admit the money I have made so far was solely based on technicals.

 

[Rhody Trader]

Take a look at the chart for EUR/CHF over the last year and you'll see a number of spikes in either direction thanks to SNB intervention, the rumor of it, or the central bank not acting. The timing is hardly predictable.