“Should I start with forex or stocks?” is one of the first questions new traders in Canada ask. It’s a reasonable question. The two markets look similar on a chart, but they’re driven by different forces, trade on different schedules, and suit different people.
Here’s how they compare, what each one teaches you, and what I’d actually recommend as a first step.
What moves forex
Currencies are driven mostly by macroeconomics: interest rates, inflation, jobs data, growth, and central bank decisions. A currency is essentially a vote on a whole economy.
Because of that, the major pairs often spend long periods consolidating on the higher timeframes. Economies don’t change direction overnight, so currencies tend to move in ranges punctuated by moves around big data releases and central bank announcements. For Canadian traders, USD/CAD is the obvious example; our guide to what moves USD/CAD intraday shows how much of its daily rhythm is tied to scheduled data.
Forex also trades around the clock, five days a week, which makes it easier to fit around a job.
What moves stocks
Stocks respond to the economy too, but individual companies have their own drivers on top of it:
- Earnings results and guidance
- New products and launches
- Hiring, expansion, and layoffs
- Lawsuits and regulatory issues
- Management changes
That means trading an individual stock, like Apple or Tesla, requires good sources of company news. Something can move a single stock sharply that has nothing to do with the wider market.
If you’d rather not follow individual companies, you can trade an index instead, such as the US100 (Nasdaq 100) or US30 (Dow Jones). Indices are easier to monitor: you mainly need to watch earnings season and major US economic data, rather than news for one company. They can be more volatile than major currency pairs, though, which we explain in stock trading courses in Toronto.
And if you’d prefer to stay close to home, you can trade Canadian stocks on the TSX.
A Canadian angle: the big banks
When it comes to Canadian stocks, my own preference is for conservative blue chips, like the big Canadian banks such as TD and Royal Bank.
One useful feature of the banks for anyone learning to follow stocks: they tend to report earnings around the same time each quarter. Their fiscal year ends October 31, so results typically arrive in late February, late May, late August, and late November or early December. That predictability makes it easier to learn how earnings affect a stock, and how one bank’s results can move the others.
That’s a personal preference, not a recommendation to buy anything. Do your own research, and if you’re investing for the long term, understand which account suits you; our article on TFSAs and RRSPs explains why shares can go in registered accounts but leveraged forex generally can’t.
Forex vs stocks at a glance
| Forex | Individual stocks | Indices | |
|---|---|---|---|
| Main drivers | Interest rates, economic data, central banks | Earnings and company news, plus the economy | Earnings season and economic data |
| Trading hours | 24 hours, 5 days a week | Exchange hours: 9:30 a.m. to 4:00 p.m. ET | Varies by broker; most active during US hours |
| Typical behaviour | Ranges on higher timeframes; moves on data | Can gap sharply on company news | More momentum; sharper sell-offs |
| News to follow | Economic calendar | Company-specific sources | Earnings calendar and economic data |
| Registered accounts | Leveraged forex generally not allowed | Shares can be held in a TFSA or RRSP | Index ETFs can; leveraged index CFDs generally can’t |
What each market teaches you
Forex is a great teacher of macroeconomics. You learn how interest rates, inflation, and central banks move markets, and those lessons apply everywhere, including to stocks.
Stocks teach you how businesses create value, how earnings move prices, and how to separate company-specific news from the wider market.
The chart-reading skills, support and resistance, risk management, and position sizing are the same in both. That’s the real point: the foundations transfer.
So which should you learn first?
My honest answer is that the market matters less than the foundation. Learn to read charts, understand what moves prices, manage risk, and follow a plan. Then you can apply those skills to whichever market suits you.
For a complete beginner, the path I recommend is to start with the free online lectures on the Academy of Financial Markets website, then move into the one-on-one mentorship program to build real skills with professionals reviewing your trades.
In the spirit of being transparent, as we wrote in our article on free vs paid trading courses: I founded the academy, and those lectures are free because they introduce people to what we do. I’d rather say that plainly than pretend otherwise. If you go another route, our beginner’s roadmap shows what to learn, in what order, wherever you study.
The bottom line
Forex is driven by economies and trades around the clock. Stocks are driven by companies as well as the economy, and indices sit in between. Each teaches you something useful, and the core skills transfer between them. Start with the foundation, then pick the market that fits your schedule, your interests, and your temperament.
Disclosure: The author, Mike Harding, founded Academy of Financial Markets in Toronto and teaches its mentorship program. Mentions of specific companies reflect the author’s personal preference and are not recommendations to buy or sell any security. This article is educational and is not financial advice. Trading carries a high level of risk.