Weighing the Benefits of Forex and Crypto Trading
23 Septembre 2022 - 09:34AM
NEWSBTC
When it comes to choosing between going into forex trading or
crypto trading, there are a number of things that traders must take
into account before picking one over the other. While there are
traders who tend to do both, a lot of traders still go the route of
picking one over the other to focus on. This report takes a look at
the unique offerings provided by both crypto and forex trading, as
well as the benefits associated with these highly sought-after
markets. Benefits Of Forex Trading Forex trading is one of the
oldest and largest forms of trading currently available. Simply
put, it is the conversion of one currency to another in a bid to
make money when one currency gains or loses strength against
another currency. So, a trader buys a currency, say USD, waits for
it to go up or down, depending on their position, and then sells
for another currency. Here are the pros of forex trading. Liquidity
One of the most important things when it comes to trading any type
of asset is having enough liquidity. Given that the forex market is
the largest in the world, recording an estimated $6.6 trillion in
daily trading volume, there is a lot of liquidity in the market.
This means that there is a good depth of market across the
available trading pairs. Leverage Leverage is something that is
abundant in the forex market. Forex brokers are able to give
incredibly high leverage to forex currency trading pairs due to the
low volatility in the market. In some cases, leverage can go as
high as 30:1, allowing traders to trade larger amounts than they
have in their accounts. So, using leverage, traders can open larger
positions than they hold in their balances. Photo by Marga Santoso
on Unsplash Low Trading Cost Another important thing when it comes
to forex trading is the significantly low trading costs associated
with it. Forex traders tend to pay what is known as a ‘spread’
and/or a ‘commission’ of about 1 pip for each trade completed. This
1 pip translates to roughly 0.08% of the trade. Diverse Options
There is an abundance of trading pairs to choose from in forex
trading. Traders can choose to trade across major pairs, minor
pairs, or lesser-known pairs/exotic pairs. There is simply
something for every trader in the market. Stability The stability
of the forex market is also a big draw for traders. Now, the market
carries its own risk, but since it is not as volatile as
cryptocurrencies, there are no wide fluctuations that can quickly
wipe out an entire portfolio in a matter of minutes or seconds,
thanks to the large volume of trades recorded in the forex market.
Benefits of Crypto Trading The crypto market is still relatively
new but has grown rapidly in popularity among investors. The assets
in the market are produced by a large variety of individuals and
entities and, in some cases, are completely decentralized using
blockchain technology. The pull of the crypto market towards
traders gets stronger each day, and here are the reasons why. High
Volatility The high volatility present in the crypto market has
made it very enticing for traders who desire larger margins when it
comes to trading. A lot of the assets in the crypto market are not
regulated by an entity. Hence, they tend to fluctuate wildly in
price. These fluctuations present an opportunity for traders to
make a lot of money in a short time. However, it also significantly
increases the risk of traders losing their positions in one fell
swoop. Photo: Pixabay Low Barrier to Entry Unlike forex trading,
traders do not need to go through a broker to be able to trade.
Instead, they can just open an account in a centralized exchange,
deposit some money, and get started. Traders can also have direct
access to the market through decentralized exchanges where they can
deal directly with other traders without interference from a third
party. The Market Is Always Open Cryptocurrencies do not have what
is referred to as “trading hours.” Simply put, the market is always
open, and traders can execute trades no matter what time or what
day it is. This ‘always open’ feature is a huge pull for traders
who do not wish to be restricted to certain hours or days of the
week. Conclusion Picking between crypto trading and forex trading
is usually up to the discretion of the trader. However, platforms
such as Oanda have made forex trading easy, even for beginners. The
platform offers a demo account where traders can learn and sharpen
their skills before moving on to a live account. The platform is
one of the fastest and most reliable forex trading sites, featuring
more than 65 popular indicators to help traders pinpoint forex
price trends. Image by Sergei Tokmakov, Esq.
Terms.Law from Pixabay
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