Penny Stocks Vs. Forex - Is Tim Sykes Wrong?

Yesterday, I published a guest article by Tim Sykes, an expert trader of Penny Stocks (Click here to learn more about Penny Stocks).

In the article, Tim praised the virtues of Penny Stocks trading in relation to Forex trading and claimed that the former is much better than the other. It’s a controversial article which you can read fully here: Tim Sykes on Forex.

Today, I want to state my views on the 5 main reasons that Tim says penny stocks are better than Forex. I would also like to recommend that you check out the free video series he released on penny stock trading as I agree with him that it’s a way to make a lot of extra money. Click here for the free penny stocks trading series.

However, I don’t agree with what he said about Forex. Let’s go over each of his 5 points and tell it like it is:

1. Tim claims that Forex is like a lottery and the facts are that most people blow away their account and actually end up owning money. This is not true.

You can’t owe money unless you borrow it. Your broker will shut down your account as soon as you don’t put more money into it in case your trades go sour. It is up to you to ensure that you apply strict Forex risk management techniques to reduce and control risk. If you do, there’s no reason why you should lose your entire account.

2. Tim claims that to succeed in Forex you need to be a market wizard and have tools and analysis skills and resources of a major investor. In Penny Stocks trading, you don’t need all of that. You can do quite well as an individual.

This is both true and not true. You can do quite well in both markets as an individual. In both markets experts and institutions with plenty of resources have bad trades. It’s up to you to be smart with your money and it works in both fields.

3. Forex is too volatile, much more than Penny Stocks are.

I agree that Forex can be quite volatile. However, you don’t have to be part of the day trading game if you don’t want to. In that case, you won’t care about minute-by-minute volatility.

Click here to see Tim Sykes’ Penny Stock Trading Videos

4. Penny Stocks are simpler than Forex.

This may be true, although you do need to judge this on a stock by stock basis. However, you can become good at both markets and it gets simpler with time.

5. Penny Stocks are easier to succeed with. Tim says he has a 75% winning average. This is awesome and it’s certainly a high figure, but some people are just better at Forex than at stocks, so I don’t think this is a general rule.

In conclusion

Forex is a market you can profit in and so is the Penny Stocks market. You need to be good and educated in either market to succeed. Penny stocks are an excellent money making opportunity if you’re good at trading them. I recommend that you check out Tim Sykes video series as it can teach you a lot about a new way to make money other than Forex. Click here to view the Penny Stocks videos