More stable than a stock, a currency doesn't often lose 50% or 80% of its value, unless you have the misfortune to live in Zimbabwe. One of my stocks IMP which is one of the biggest platinum mines in the world did exactly that last year.
Also, you're not going to get a CEO who gets pissed in the company bar and say the wrong thing and the next day the stock is on the floor. I lost money like that.
In fx a 10% move is big. But a block is so expensive and credit so easy to get through margin accounts that people tend to over leverage the trade.
So I think it's more stable than stock, but quite likely you'll over leverage it and get a more volatile equity curve than stocks, where margin accounts are a lot less common.
There is one very big difference though. Stock is 100% predictable where fx 100% unpredictable. A stock will always go up. If it's not going up now, then it will go up later. Unless the company goes bankrupt, the stock will go up eventually. Same is not true for Fx, which is bi-directional. Makes it very difficult to trade...
The last resources rally we had was actually all about dollar weakness. So if I want to buy say Implats shares (platinum) I have to be relatively sure that both the dollar will weaken and demand will pick up, otherwise it be dead money.
All part of the puzzle.
I see it as a pyramid in terms of gains, property the slowest, then equities, then derivatives on equities and then FX. From there I cascade my investments down, as they are also affected by changes in market conditions in that order, property being the last to be affected, fx first.
To me we all trade fx anyway, no matter what we trade.
Well, I measure the stability of any currency pair based of the market context, I mean trendy market or not! Yes, I am interested on only trendy market! For determining market trend I mainly use high time frames like Weekly and Monthly.
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