Stocks/ETFs vs Forex: Why I flipped to Forex, and why I feel I made the right choice.

During the meteoric popularity of “risk free”, “free flowing passive income” REITS in the past decade, REITS sprouted out of almost nowhere, even though they were not a new type of financial instrument. Then, naturally, after their successes, books, seminars, wealth academies quickly jumped in to take advantage of this increased popularity to teach people about REITs and how they are possibly the best investment you can make.

Taglines like “be your own landlord” or “imagine owning a piece of Junction 8” were certainly tempting, and to an extent, certainly true. If you’ve never heard of REITs before, here’s a good example of a REIT gone bad, that revealed the loopholes in the way REITs are structured and managed. I personally had large holdings of Sabana REIT when it was just under $1 a unit, giving a very attractive yield of 7%. It’s now worth $0.42 per unit.

Sure, that means that the yield would be even greater wouldn’t it? Yeah about 8.4% according to this website based on last year’s price, which..hasn’t moved much, which is exactly why it’s in kind of in trouble.

I won’t talk much about Noble and FSL trust because they all have their own stories. And that is exactly why I switched to forex instead. The common adage that value investing in stocks is the “Intelligent Investor“s method to wealth, in my very honest and personal opinion, is no longer true in our current financial environment. We live in a very different time from Warren Buffett, when companies were structured simply, and business was honest and simple to understand. Not so anymore.

People of a generation older would be strong proponents of stocks and definitely would have made a great decision to invest in the blue chips that have lasted through the ages.

But my faith in stocks is gone for a simple reason: It has become complicated, manipulative, and as a stock holder, you are nothing. Companies go IPO not for your own good. They go IPO to raise funds for their own major stockholders so they get rich first, and do what they want, within regulations, which again, has flaws and loopholes that cause problems for the small time investor.

Ok enough about stocks. Why forex, the demon, the high risk gamble, the unknown?

2 words: Massive liquidity.

The forex market is so huge and decentralized, to a large extent, no one single force can manipulate it without blowing up a whole country and destroying a whole currency. A major one at that. HOWEVER. It is not to say there are NO manipulative forces in the forex markets. But it is extremely difficult, even for the regulators and central bankers, who control exchange rates through controlling supply of their own currency and by manipulating interest rates of their currencies, to jolt the market more than a even less than a percent in a day, except only in exceptional events.

eurchfdepeg

27% in one day is akin to a country blowing up. I was in a long USDCHF trade when in happened. I lost $200. Thanks to my broker, and thanks to my stop loss. Some brokers just went straight bankrupt. (Most of the drop has recovered by the way)

Liquidity is key to trading successfully. It means there are more traders, participants in a market. Imagine being in a pasar malam the size of Singapore. You will get very tight competition, and very good prices, and chances are, you are going to make a trade without anyone even bothering to control the madness. If I want to sell Roti John for $100 and a mad man says YES I WANT, you got a sale.

And there are mad people, in the forex market, for sure.

The last reason why I flipped to forex is really an afterthought. It’s not about the money. It’s about Singapore being in the right place, and in the right time(zone) for forex trading.

You can trade all major forex markets, from Japan, Aussie, London, Europe, and finally the US, in a single day in Singapore, because of the near perfect timezone we live in.  Of course, if you strictly want to trade the US time zone when is it more active, you’d have to stay up late, a misconception that turns many people off forex. In fact, the advantage is in the control of your own hands:  You can see the run up in the market before US traders wake up. The same goes for US traders who want to trade the London session, which used to be the most hot forex market. Who said you needed to trade through the night to make money? I sleep soundly at night and let the market do its thing. My position are already placed, and I don’t micromanage.

Without taking daylight savings into account, you, holding a full time job, can just spend some moments after your dinner, putting your kids to sleep, having a nice romantic time with your spouse, and just spare maybe an hour or less between 9pm-12am trading the market when it is most active. Instead of playing Overwatch or Mobile Legends.

During your afternoon tea break about 3-4pm, check out the London open, and get a  head start before the UK traders start work.

If you really want to trade the Asian session (which is the quietest), it’s no problem to just open the charts while having some coffee, to see how the US market did overnight, and see if there are interesting moves in the JPY and AUD and NZD.

(Check with IRAS as well. Profits/losses from forex trading are considered investments, and thus…ahem. Go find out yourself)

And these are just some of the reasons why I’ve switched to forex. It may not be for everyone, but everyone can learn how to trade it without much effort. And, that’s why I’m here, to help you.


Thanks once again for popping by my blog. Please give me feedback on what else you’d like to know/read about my own opinion on forex. I tend to write long stories, because I love writing. It may not be as attractive, but it’s certainly no clickbait.

Sharing is caring. 🙂

Happy trading!

And remember to drop me an email to join the ever growing email list!

james@smartcasualtrading.com

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One thought on “Stocks/ETFs vs Forex: Why I flipped to Forex, and why I feel I made the right choice.

  1. Pingback: One week of meeting folks interested in Smart Casual Trading Forex and I’m the one getting coached | Smart. Casual. Trading.

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