People are looking to grab every investment opportunity available to make more profit, which leads to a constant comparison between trading Forex and Bitcoin trading. Trading is a wide concept that covers a multitude of financial markets. While Crypto trading keeps gaining more fans, Forex trading isn’t losing either. They both have their supporters with genuine reasons for supporting their trading choice.
Find out 20 secret bitcoin trading strategies with top executives and CEOs use.
Forex simply means ‘foreign exchange’. It means buying and selling fiat currencies of different countries with the aim of making profits from changes in price. This is done by predicting the price action of a particular currency against another currency. Forex is the biggest financial market in the world with several currencies to trade. It has the highest liquidity and trading volume, completing transactions worth trillions every day.
There are lots of factors that can affect the forex market which include; inflation, GDP, unemployment, and several others. Since you deal with currencies of different nations in forex, the actions, strength, and weaknesses of the economy of a nation will definitely affect the currency of that nation and also the forex market. While forex traders read charts and analyze the market, they also monitor the news to have firsthand information about the political and economic situations of different countries. In forex, two trading currencies are paired against each other for instance USD/JPY. The strongest being the base and the other is the quote currency. So traders predict the actions of these currencies against one another and then sell one to buy the other.
In a simple term, cryptocurrency trading means buying and selling digital assets. However, it is no news that bitcoin has the highest volatility of all crypto assets. So more people are looking to buy and sell bitcoin to take advantage of its high level of volatility. Bitcoin trading, however, means buying and selling bitcoin. Traders take advantage of the volatile nature of the crypto market to buy BTC or other altcoins at low prices and sell them at higher prices. Your success depends on how well you can predict the movement of the crypto price. The crypto market is a decentralized market with no central body or authority in charge of its operations. However, you can buy and trade them on different exchanges.
You can trade bitcoin primarily on crypto exchanges, although some forex platforms now include BTC as a tradable asset.
Day trading mainly requires taking short and quick trades. The method involves a careful reading of the market, seeing little money-making chances, and jumping on it. So basically, you buy bitcoin at a particular price, wait for a little positive swing in price before you sell. You are taking advantage of the daily volatility in the price of BTC and the little price swings.
Swing trading involves buying at a low price, waiting for a price increase, and then selling at a higher price. Traders adopting this method look to take advantage of obvious price swings. Swing trading may require waiting for a longer time compared to day trading, but not as long as when you are implementing the HODL strategy. Basically, you buy bitcoin at a low price, wait a while for a positive price swing, and close your trade at a higher price.
Volatility simply means the rate at which the price of an asset changes. An asset that experiences a series of price changes in a short period is considered highly volatile. Both markets have an impressive degree of volatility that creates an avenue for profits in just a short period. However, Bitcoin is more volatile than forex trading pairs.
Bitcoin is a very volatile asset as it witnesses a series of price movements in just a few minutes, which is the main reason why people look to get involved in day trading and take advantage of those little price movements. The price fluctuation of bitcoin is what makes it an incredibly profitable opportunity as well as an avenue to get rekt.
Liquidity simply means the amount of money pumped into a market. It is the depth of buy and sell orders. The size of a market determines the level of liquidity. As explained earlier, the forex market is the largest in the world. Therefore In terms of liquidity, bitcoin is second to forex. High liquidity of the forex markets makes it somewhat less volatile which could also be considered as an advantage because of increased stability in price leading to reduced risk.
Due to the high trading volume in the forex market, large transactions will have no or slight effect on the market however such transactions in the bitcoin market will definitely have a substantial effect on the market.
While every crypto exchange is available for trade 24/7, the forex market is only open 24hrs on working days. The forex market is always closed on weekends and important holidays.
Bitcoin trading and forex trading are both incredible ways of making some profits. However, before going into any, you have to learn the technical aspect of trading, understand the risk management strategy, and have a trading plan. If you want to buy bitcoin and trade, you have to buy at the right time. Knowing the right moment to buy and sell however depends on how well you can analyze and predict the market. Likewise, a successful forex trader must know how to read and analyze the market.
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