Before deciding between forex trading and crypto trading, traders need to consider a few things. Although there are some traders who do both, many traders choose to concentrate on one. The report examines the distinct offerings of forex and crypto trading as well as the associated benefits.
Forex Trading Has Many Advantages
Forex trading, one of the oldest forms of trading available, is also one of its most important. Forex trading is, simply put, the exchange of currencies in order to profit from currency fluctuations. A trader might buy a USD currency and wait for the currency to rise or fall depending on where they are located. Then, they sell it for another currency. The pros and cons of forex trading are listed below.
When trading any asset, liquidity is a key factor. The forex market, which is estimated to be the biggest in the world with an average daily volume of $6.6 trillion, has a large liquidity. There is therefore a wide range of trading pairs available, leading to a deep market.
Forex market is rich in leverage. Because of the low volatility on the forex market, Forex brokers can provide extremely high leverage to currency trading pairs. Some forex brokers can offer leverage as high at 30:1, which allows traders to trade bigger amounts than the amount they hold in their accounts. With leverage traders are able to open more positions than the balances of their accounts.
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Very low trading costs
The low cost of forex trading is another important aspect. Forex traders tend to pay what is known as a ‘spread’ and/or a ‘commission’ of about 1 pip for each trade completed. The 1 pip represents approximately 0.8% of each trade.
Forex trading offers traders a wide range of options. Trades can be made across major, minor, and exotic pairs. Every trader has a place on the market.
A big attraction for forex traders is the market’s stability. Although the market is subject to risk, it’s not as volatile and can wipe out entire portfolios in minutes or seconds. This is due to large volumes of forex trades.
Crypto Trading: The Benefits
While the cryptocurrency market is new, investors have been gaining popularity rapidly. Market assets are created by many entities and individuals. In some instances, the entire market is decentralized with blockchain technology. Here are some reasons that the market is attracting more traders to it.
Very high Volatility
High volatility in crypto markets has attracted traders looking for larger trading margins. The crypto market is not regulated in many cases. They are subject to extreme price fluctuations. These fluctuations offer traders the chance to make large sums of money quickly. This also means that there is a greater chance of traders losing all their positions at once.
There is no entry barrier
Forex traders don’t need to have a broker in order to trade. You can open an account at a centralized exchange to trade, then deposit your money and start trading. Traders have the option of having direct access through decentralized markets, where they can interact directly with traders and avoid any third-party interference.
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.
The trader can choose between forex trading or crypto trading. Oanda, however, has made forex trading simple for even beginners. A demo account is available on the platform, where traders can practice their trading skills and learn before they move to a real account.
The forex platform features over 65 indicator options to assist traders in identifying forex price trends.
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