Forex Trading vs Cryptocurrency Trading. Which should you choose?
Today, I will be discussing something very fascinating. This podcast will really favor those that are about to venture into trading. But I will be considering only two types of trading which is Forex trading and cryptocurrency trading. Just like there are many similarities between Forex trading and cryptocurrency trading, there are also plenty differences too. Please note that this podcast will not reveal everything you are supposed to know about both types of trading, but I will point out a good number of outstanding points that will lay a solid foundation for you.
There are many parallels between these two markets such as the fact that they both deal with currencies, both markets are volatile and both require a smart phone or computer with an internet connection to get started and both types of trading require a good understanding of the market.
Foreign Exchange often referred to as Forex is the largest trading market in the world with a daily trading volume of about $5 trillion deals with international government-issued currencies usually open for 24 hours a day and 5 days a week, from Monday to Friday. It is also the oldest trading market in the world which comprises individual investors, banks, institutions and businesses.
In Forex trading, middlemen usually referred to as brokers are involved and they collect fees at every step in the trading process. Trading in the Forex market involves smaller risk because the market is more stable than that of the cryptocurrency market. The Forex market is affected by global events which will require traders to scan news headlines more often to make good decision on their trades.
On the other hand, cryptocurrencies which are decentralized assets are a relatively new entry in the financial world and despite rival currencies and tons of scams, bitcoin still remains a powerhouse in the cryptocurrency world. Cryptocurrency trading deals with digital assets such as bitcoin being the first digital currency, including Ethereum(ETH), ripple and many others. Recently, the market deals with about $100 billion daily trading volume and most of the trades go through cryptocurrency exchanges.
The cryptocurrency market is always open for trading and it is a new player in the scene compared to Forex. There is no middleman in cryptocurrency trading and that’s probably the biggest draws to it. The cryptocurrency currency market is more volatile than the Forex market which implies that there is potential for higher returns and also there can be great losses without proper risk management. Cryptocurrency traders pay more attention to charts and technical analysis because the market is less affected by the economy.
At the end of the day, the decision of whether to trade Forex or cryptocurrency depends on your personal goals, resources and risk tolerance. In addition to what I have said, you should be mentally prepared to cope with losing trades and prevent emotional trading as there are psychological risks in both types of trading. I hope that this podcast gave you some insightful information on both markets and will help in your decision making or form an opinion for future discussions. Regardless of what I have said, I suggest you spend time to do proper research before making your choice.
