Weighing the Benefits of Forex and Crypto Trading

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When it comes to choosing between getting into forex trading or crypto trading, there are a number of things traders should consider before choosing one over the other. Although there are traders who tend to do both, many traders still choose one over the other to focus on. This report examines the unique offerings provided by 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 most important forms of trading available today. Simply put, it is the conversion of one currency to another for the purpose of making money when one currency gains or loses strength against another currency. So a trader buys one currency, say the USD, waits for it to go up or down, depending on their position, and then sells for another currency. Here are the advantages of forex trading.

Liquidity

One of the most important things when it comes to trading any type of asset is having enough liquidity. Since the forex market is the largest in the world, recording an estimated daily trading volume of $6.6 trillion, there is plenty of liquidity in the market. This means that there is good market depth among the trading pairs available.

Leverage

Leverage is something that is abundant in the forex market. Forex brokers are able to give incredibly high leverage to forex currency pairs due to low market volatility. In some cases, the leverage can reach 30:1, allowing traders to trade larger amounts than they have in their accounts. Thus, by 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 called a ‘spread’ and/or a ‘commission’ of around 1 pip for each trade made. This 1 pip translates to approximately 0.08% of the trade.

Various options

There are an abundance of trading pairs to choose from in forex trading. Traders can choose to trade major pairs, minor pairs or lesser known/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 risks, but since it is not as volatile as cryptocurrencies, there are no big swings that can quickly wipe out an entire portfolio in minutes or seconds, thanks to the large volume. transactions recorded in the foreign exchange market.

Benefits of Crypto Trading

The crypto market is still relatively new but has rapidly gained popularity among investors. Assets in the market are produced by a wide variety of individuals and entities and in some cases are completely decentralized using blockchain technology. The attraction of the crypto market to traders is growing stronger every day, and here are the reasons why.

High volatility

The high volatility present in the crypto market has made it very attractive to traders who want higher margins when it comes to trading. Many assets in the crypto market are not regulated by any entity. Therefore, their price tends to fluctuate wildly. These fluctuations provide traders with the opportunity to make a lot of money in a short time. However, it also greatly increases the risk of traders losing their positions all at once.

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 simply open an account at a centralized exchange, deposit some money, and get started. Traders can also have direct market access 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 so-called “trading hours”. Simply put, the market is always open and traders can execute trades regardless of the time or day. This “always open” feature is a huge plus for traders who don’t want to be restricted to certain hours or days of the week.

Conclusion

The choice between crypto trading and forex trading is usually at 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 hone their skills before upgrading to a live account.

The platform is one of the fastest and most reliable forex trading sites out there, with over 65 popular indicators to help traders identify forex price trends.

Image by Sergei Tokmakov, Esq. Terms.Law from Pixabay

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