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 UnsplashLow 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: PixabayLow 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