Cryptocurrency Vs Forex Trading- What Should Beginners Choose And Why

 

If you’re a beginner who wants to start a trading career, you might have found it perplexing to decide whether to choose crypto trading or Forex trading. This question is asked in terms of practicality, profit, and ease of trading. So, in this detailed blog, I am going to tell to a clear opinion about both of these options. Make sure not to skip the details to clear all your doubts.

1. Know Your Trading Preferences

Trading Forex or crypto depends on what kind of person or trader you are. If you’re more of an organized person who believes in earning through skills like technical analysis and fundamental analysis, then you should opt for Forex trading because it demands trading skills and experience.

On the other hand, if you are a risky player and you can endure losses for big rewards, you can think of investing in cryptocurrency. Cryptocurrency is now being more acceptable across the globe and can be a game-changer. Cryptocurrency is a high-risk and high- reward market. The more risk you can take, the more rewards you are going to earn.

2. Your Expectations from Trading

This is another question that you need to answer while choosing between crypto and Forex. What is your expectation in terms of profit and loss? Do you expect big returns in a short time or short and consistent profit throughout your trading career?

In crypto, big opportunities come to you and you can make millions by investing a very little amount of money. But again, you can’t predict when is that going to happen. Price can go up exponentially in a matter of hours or days or you may have to wait for months, weeks, or even a year to make really big profits. This is because the crypto market is more volatile and your trades can go both ways- profit or loss.

But in Forex, things are different. The forex market is more stable and offers a consistent but relatively short percentage of profit.

Wondering why?

This is Because, in Forex, you trade with different currency pairs like Dollar and Euro that are more stable than cryptocurrencies and are regulated by national and international banks and this is the reason stable currencies don’t fluctuate much in price over a short period of time. If you have a larger trade volume, you can expect a safe and big turnover because the Forex market is less volatile.

3. Capital Investment

When it comes to small capital investments and ease of doing trade, crypto-trading wins because, in cryptocurrency, you can expect a good profit even with small investments like 100 dollars. In Forex, however, you have to be patient with the small profits until you have big investments.

Also, there’s less fee charged while trading crypto-currencies as compared to the Forex. But this also depends on your Forex broker.

4. Difference Between Trading And Investments

Most people confuse investments with trading and vice versa. Daily trading or short-term trading is when you buy a stock, commodity, or currency for a few hours or days and then sell it. On the other hand, if you buy stocks, currencies, or commodities and then hold them for months or years, this is called investment. Now both of these are profitable but in different time frames. Since cryptocurrency is a high reward market, you can expect an incredible percentage of profits in crypto investments. if we look at the history, bitcoin was trading around $1 back in 2009 and now it’s around $64k. This means bitcoin had an insane growth rate in past years which is practically impossible for any currency or commodity.

5. Time Required

Since trading Forex or Crypto is a high-risk business, you have to dedicate some of your time to fundamental and technical analysis to avoid losses. For Forex, you have to know the world economy and keep an insight on news. Likewise in crypto-currency, you have to watch crypto news and learn the basics. Forex trading demands more attention and care as you can’t trade without proper signals or your knowledge and experience.

In crypto-currency however, you can hold your investments and take profit from pumps and dumps. Speaking from my experience of trading crypto, you actually can see 2-4 big investment opportunities in cryptocurrency every month.

You would rarely see such pumps and dumps in the Forex market as it is more stable and predictable.

So, if you want to trade in crypto-currency once or twice a month, then wait for some big events and news to get the right entries.

6. Safety And Security

Since the Forex market is big and regulated by central agencies and banks, it is more secure than crypto. But you ultimately have to pay the cost of this security in the form of taxes and broker fees. Your profits are trackable and taxable. That means you have to pay taxes on your Forex profits.

Cryptocurrency is admired for its privacy and high-end technology that is now being widely accepted by society as well as many institutes. But since crypto-trading is illegal in many countries, you can’t file a complaint against scammers or get back your money in case of wrong transactions. You have to trade crypto at your own risk.

So far, we have discussed why and why not to trade Forex or Crypto as a beginner. Now I want to share my opinion on this question.

Well, I believe learning is the most primary investment than any other investment. So, if you’re confused between the two, you can simply test both of these trading methods for free. You can open your demo account with a beginner-friendly Forex broker like XM or practice cryptocurrency with free money provided by sources like tradingview.com, you can see the market, analyze charts, execute trades and observe what happens and why. You may change your mind after checking both these options as everybody has a different strategy for trading.

That’s all about today’s blog- if you learned something new, share this information with others and let me know your opinion on this matter in the comment section below.