CRYPTOCURRENCY MARKET VS THE FOREX MARKET: SIMILARITIES AND DISSIMILARITIES
We have carefully analysed the cryptocurrency market and the forex market and determined which is better for would-be investors.
The currency trading and the cryptocurrency trading are different but with distinct similarities.
In this article, you will be shown these dissimilarities and Similarities to guide and help you know or make your decisions in choosing which of the trading you would want to invest your money on or learn in becoming a professional trader on.
The Foreign Exchange Market
The foreign currency exchange market and the cryptocurrency market are separate and have distinct features that attract traders. Forex is considered to be the most liquid, largest and decentralized market globally; where a diverse world currency is traded.
The Forex market is influenced by inflations, government policies, news, and various factors. It is estimated that over $5 trillion is traded daily in the Forex market.
The Cryptocurrency Market
The digital currency, popularly known as cryptocurrencies are not the same as the currencies used in countries. The cryptocurrencies are not backed by any government or any centralized body.
They are simply virtually hosted online and supported or backed by the Blockchain Technology which creates a restriction on double-spending of these currencies.
The network on which these cryptocurrencies are secured aids the generation of cryptocurrencies in exchange for work on done on transactions verification and confirmations by miners.
Cryptocurrency trading and Forex trading are both similar. They both involve the exchange of currency for another currency. The cryptocurrency market is estimated to be over $700 billion traded per day. The cryptocurrency market is highly unpredictable and volatile.
Forex trading vs Crypto trading Which is Better?
|Forex Trading||Cryptocurrency Trading|
|Unlimited supply. There is an unlimited supply of currencies for daily trading activities. These are so because trading involves global currencies (world currencies from all countries)||Limited supply. Limited supply increases demand. Since there is a limit to how many cryptocurrencies can be created in the cryptocurrency ecosystem, supply and trading are limited and restricted.|
|Leverage. losses can escalate rapidly because there are leverages of 50:1||Swift and Permanent transactions. Transactions done are fast and irreversible with a low or zero transaction fee.|
|Large market Traders in the forex market outnumber that of another market. Larger volumes can be traded.||Massive profit and loss The cryptocurrency market is very volatile. That is to say, an investor can make a huge profit in a short period of time and lose it as in a very short period.|
|Influenced by global news, announcements, earnings reports, etc. Signals or trading opportunities can be spotted easily. Traders can simply rely on news, economic report and so on to decide when and what currency to trade.||Influenced by everyone The price or state of the cryptocurrency market is influenced by everyone-The buyers and sellers and can also be influenced by news Open Market There are zero restrictions on whom and who is permitted in this market. Everyone can be a trader in this market irrespective of class or status.|
Forex trading vs Crypto trading(Similarities)
Online markets Both markets exist online and can only be used for trading online. Similar Exchange Features A professional trader in Forex can easily learn and adapt to the cryptocurrency market exchange. It is so because the cryptocurrency market feature and the Forex market Feature have similar features and deals with the trading of one currency against another. Volatility The cryptocurrency market and the Forex market are volatile. In both markets the higher the risk the higher the profits.
Investing or Trading in Cryptocurrency and the forex market involves a lot of perseverance, risk management, patience and emotional intelligence with the ability to learn. Not everybody can become a good trader overnight. It takes continuous practice and strategic planning to master trading in cryptocurrency and forex.
There are other similarities you will find out as you trade on. Please understand that the cryptocurrency market and the Forex market both have great risk and that your ability to manage these risks will give you great leverage in the course of trading.
It is also advisable to always note every trade initiated. Know what made you lose a trade and what made you profit in a trade. Be attentive to spot the mistakes you made while trading and always keep them so you never get to repeat them. Be precise and decisive.
Whether you are a cryptocurrency trader or the Forex trader it makes no difference. You are trading to make profits and learn. Be open and always, always stay positive no matter how many bad trades you have had for the day. As Always, your survival is greatly dependent on your emotional stability or control. Trade with Zero emotions!.
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