Forex Or Cryptos | The Right Choice For You Is Here!Jesus
Before you start trading, you must answer five simple questions. Don’t Trade if You Don’t Answer Them first.
Trading forex or cryptos?
As a rule, forex exchanging implies security, regulations, and more options. Despite, crypto trading might represent to you a more significant return and faster than trading forex. Forex liquidity Vs crypto volatility force traders to use different strategies. When it comes to trading these markets.
What is Forex: It is the exchange of foreign currency between parties. The parties determine the value of the currency and its purchasing power. Individuals or businesses do it.
What Are Cryptos: A cryptocurrency is an electronic payment system. Cryptos gets backed by a decentralized database. Cryptocurrencies got designed for use by the general public. But they can also exist used by specific people and organisations.
Is Trading Cryptocurrency the Same as Forex?
Cryptocurrency is no different than any other financial asset. Yet, its nature and risk profiles are different. So, the same way you trade forex you trade cryptos. But the market information you need, funds, strategies, and trading tools are different.
Cryptocurrency and Forex can sometimes get confused. It is not a bad idea to start by understanding the differences. In the context of this article, we will be using the term Cryptos to refer to Digital Assets. They get created with cryptographic and mathematical processes. But are differs nt and risks. Forex gets broken down into three major categories: Majors, Minors and exotics.
Which is better crypto or Forex?
Here we have a great question to ask yourself. Because Forex is not about gambling; instead, it is an investment strategy. An investment that you can use to generate a financial gain or profit. The same approach you can take with cryptocurrencies.
As you can profit from them too, but you can mine cryptos, not forex. So, in this context, the difference between crypto and Forex lies in the fact that Cryptocurrencies gets created using mathematical processes, but forex is not.
in conclusion, if you know nothing about cryptos, then for you the best is to trade forex. If you are an expert miner, knowing cryptos markets, technics and strategies. then for you, Cryptocurrencies might be more suited to you.
How much are you able to make?
How much you earn depends on several factors. Such as your skills, knowledge, and experience, your portfolio, and the trading market. Forex trading is volatile. Don’t trade it without care, strategy and preparation.
Forex is not a safe investment for anyone with little to no experience. Learn the basics of forex trading and before trying to trade cryptos or any other digital asset.
If you want to know more about Forex trading and crypto trading check the following two videos:
Advantages of Trading Cryptocurrencies.
Before you venture in, know what you’re getting yourself into. This will help guide you along the way. It’s an online trading environment where you can trade cryptos. As well as invest in cryptocurrencies. You need to decide which type of trading are you going to do and where you will trade. You have two main options:
- You invest in the real asset
- You can speculate on the price of the asset
The above two trading options comes with their own advantages and disadvantages.
The following advantages are unique to trading cryptocurrencies:
If trading the real crypto asset:
- They are one-to-one transactions.
- The blockchain ecosystem facilitates transfer methods.
- You can add the third party for transaction approval.
- Minimizes fees involved in asset transfers.
- Each transaction is unique between the two parties.
- Transaction fees usually don’t apply.
- Services are available to anyone with a data connection.
- Cryptos are not subject to exchange or interest rates, transactions fees, or alike.
- You are the sole owner of the crypto.
- Flexibility and adaptability to all financial networks.
- Strong security against fraud.
If speculating the price of the crypto asset:
When you trade cryptos with a broker, you speculate on-trend your chosen crypto will take. Uptrend if the price goes up, or downtrend if the price will go down. Called CFD, trading (contract for difference). It is implicit with CFDs that you will not own the asset. You will trade on its trend.
The advantages of trading cryptos CFDs are:
- Fast intraday price actions.
- You can trade cryptos against fiat currencies.
- More accuracy on technical analysis.
- Spread betting stays tax-free.
- You can use leverage to increase your trading funds.
- No need for crypto-wallets.
Consider Trading Cryptos if…
- You want to own the cryptocurrency.
- You can pay the full value of the asset.
- You’re good at paying taxes over your profits.
- You can afford direct exposure to one exchange per account.
- You can wait for an exchange account before you can trade the crypto.
- You want to pay a minimum entry.
- You care not giving extra fees for deposits or withdrawals.
Consider Trading Cryptos CFDs if…
- You’re ready to speculate on the price of crypto without owning the crypto.
- You know how to use the leverage to trade CFDs.
- You like the advantage of tax-free on spread betting or CFD trading.
- You know how to be exposed to multiple assets from one account.
- You know you are ready to start trading now.
- You don’t want maximum deposit caps.
- You want to avoid paying funding and withdrawal fees.
Source: IG Markets
Disadvantages of trading cryptocurrencies.
There is always a risk that the value of a cryptocurrency might get inflated. Due to speculation, but the reward will generally outweigh the risk. still, there are certain cons we must consider when trading cryptocurrencies:
- You should never use cryptocurrency as your only investment option.
- Cryptocurrencies are volatile, and the prices can fall.
- It’s tough to predict the future value of any cryptocurrency.
- The trading volume gets limited, and so is less diversified.
- You have no guarantee that the market will be transparent, or that there won’t be any bubbles.
- Cryptos remains unregulated.
- Short historical price-chart.
While trading cryptocurrencies presents to us some significant advantages, there are certain disadvantages as you can see above. In the following lines, we’ll cover the main advantages and disadvantages of trading forex, so you can have a full overview of these two industries when it comes about what to trade and how to trade it.
Advantages of Trading Forex
When you trade forex CFDs with a broker. The broker will usually show you all the different types of trades you can make on their platform. Where you can trade against other people and place bets on the direction of the market or against.
Forex CFDs can be challenging to understand, and sometimes they may be confusing. In the remaining parts of the article, we will go through the basic principles, advantages and disadvantages that you should know before you start trading. When it comes to trading forex, you must know the basics of currency pair trading. It’s important to know a couple of key concepts before you start trading.
- Currency pairs are like stocks. They both have different types of prices that fluctuate.
- You are no buying or selling the actual fiat currency. You are trading the price of the currency pair you had chosen, explained above.
Forex exchange, as well as cryptos takes place under two scenarios. You can buy the real currency with your currency, and use the exchanged currency when you are travelling abroad.
The other scenario takes place when you trade with a broker. In this case, the brokers provide you with a contract, which enables you to trade on their platform without needing to own any actual currency.
Both scenarios need two things: a market, and an arbitrator.
Market: is the place where buyers and sellers come together to trade their currencies. The market is where the arbit decides the outcome of a trade and if a trader is correct in their predictions.
Arbitrator: Is an agent acting as a neutral party between two parties. Deciding whether a trader is right or not in a trade. In Forex exchange the arbitrator is the broker. Are all brokers neutral? Well, they should!
Now, lets number some of the most relevant advantages of trading Forex.
Top 10 Advantages of Trading Forex
- Forex represents the world’s largest financial market of the world.
- When you trade with a regulated broker your money is protected.
- You have lots of tools available for trading.
- You can trading by copy other expert traders.
- You can use algorithm trading or expert advisors.
- Each region of the world own its own Forex market.
- You can take advantage of the volatility.
- You can use leverage.
- Some asset have low transaction fees.
- You can trade 24/7 Monday to Friday.
Now, Do you need money for a trip or do you want to trade in the Forex markets?
If trading the real fiat currency:
- You can give your home country cash in exchange for the currency you need.
- Relatives of friends can make the exchange with you or for you.
- Most international airports include currency exchange offices.
- Buy and sell of foreign currencies are also available in many major cities.
- Many people will be able to help you with the exchange.
- Depending on the currency, sometimes you make money when saving the currency note bill.
If speculating the price of the currency:
Here we enter in the realm of the forex market on CFDs. It is not something everybody should do. Thou you can, but is not advisable without a proper preparation.
- You can have a position open as much as you want when the markets and brokers trade on reasonable conditions.
- You can check different brokers offering different fees and spreads, which give you the option to choose the best for you.
- You can create your personalized strategy.
- You can trade per minute, per day, per month. It is up to you and not the broker.
- You can make money really fast (or lose it too).
- You can hire an expert trader to trade for you.
Consider Trading Forex if…
- You understand the Financial Markets.
- You have a trusted broker and regulated.
- You have money you dont care to lose.
- You can control your emotions.
- You know when enough means enough.
- You can forecast the sentiment and trading conditins of the markets.
- You have tested your strategy before.
- You have an strategy.
Not everything is Forex trading is flowers and roses. Sometimes, too many times. You will find yourself exposed to the “sharks of the financial markets”. You cannot tell which is one until you do research. Even after analysis, you might be a victim of a shark. So, here you have the most critical cons we have encountered when trading forex.
Top 10 Disadvantages of Trading Forex
- High risk of losing your money
- Conflict of interest with brokers (they are all market makers, no matter what they say)
- Too high leverage offering
- Some brokers play around with the regulations to offer bonuses and leverage to increase the chances of clients losing their money.
- Funding time is instant, withdrawal time implies weeks or in some brokers eternities.
- Most trusted brokers minimum deposits are too high.
- Customer support is not always as expected or as it was when you were about to fund your account.
- Traders education too many times comes from ill-educated traders.
- Fear and overconfident burns traders account fast.
- The roll-over fee is charge twice in one night.
How would you like to trade now?
Will you trade forex or cryptos?
You found useful and verified information in this article. Putting you in the solid ground to make a decision. Yet, if you are looking for information on how to build an effective trading strategy. You are better off reading my article on the best forex trading strategies for beginners.
Are you looking for the best bitcoin exchange or exchange for cryptocurrency trading ?
If you are, then you have come to the right place. I will be listing the best Bitcoin exchanges for beginners.
Top 5 Best Bitcoin Exchanges for Beginners:
Notice that none of the link above are affiliates links, so you can visit the sites on your own discretion.
My closing words are simple, trade but trade informed. Don’t ever go trading if you are not well prepared of the industry you are about to invest your money. Always remember what happened to the man who took the long way of trading, he went bankrupt and never traded again, don’t follow his example, trade cryptos, trade forex, yes but trade informed!