Crypto trading vs Forex trading. And the winner is….
Two most popular markets for trading and speculations – Forex and crypto. Lets try to compare how deal with those two type and achieve goals.
Forex market is composed of three primary segments: the Interbank market, the retail market and the exchange traded futures market. Daily volumes average over 5.3 trillion USD- it is about 53 times more than the New York stock exchange. About 40% of the world’s dealing goes through trading rooms in London.
This kind of trading promotes low cost of commissions and brokerage operations, suitable for different trading styles and offers very high liquidity. As an over-the-counter market, Forex does not have a central exchange, all trading takes place on electronic systems operated by the big banks and other providers. This helps to avoid any surprises and also reduces costs. Prices change according to supply and demand.
Top 10 traded currencies are USD (almost 90% of global trades) EUR, JPY, GBP, AUD, CHF, CAD, MXN, CNY, NZD. More than 85% of the global Forex market transactions happens on only 7 currency pairs known as the majors (EUR/USD, USD/JPY, GBP/USD, AUD/USD, NZD/USD, USD/CAD, USD/CHF). In Binary option trading every trade lasts from less than 10 minutes to a maximum of 19 minutes.
Then moreover, the price of currencies floats, with Market Makers setting exchange rates. In addition, capital requirements are quite low, which opens up the opportunity to make good money even if you start with a small one.
What is Forex Liquidity?
Liquidity is about how active the market is and Forex is the most liquidity market in the world. This is determined by how many traders are actively trading and by their total trading volume. Although liquidity fluctuates, as financial centers throughout the world open and close throughout the day, relatively high volumes of foreign exchange trades are usually observed. In the stock market, the so-called “blue chips” – the shares of the most popular issuers – have the greatest liquidity. On the commodity markets, high liquidity is, as a rule, real estate, precious metals and vehicles.
In general, liquid markets such as Forex tend to move at a lower pace, because their high liquidity leads to lower volatility. When traders trade at the same time, the price does not fall or rise. However, traders need to keep abreast of current events and keep abreast of financial news to find potential benefits and avoid potential losses.
Generally the major Forex market players are Commercial and Investment Banks/Central Banks/Businesses and Corporations/Fund Managers, Hedge Funds and Sovereign Wealth Funds/Internet-based Trading Platforms/Online Retail Broker-Dealers.
On pictures: top 10 players in the global Forex market
They are the last segment of the Forex markets. Unlike as banks do, Forex brokers do not rely on trading platforms like EBS or Reuters Dealing. Instead, they have their own data feed that supports their pricing engines.
Newbies often have their debut sad experience, when they sign up with the first broker, that they met, without fully researching into them. In mostly cases its simply ended with quickly loses and then traders continue to hunt for the next best Forex broker.
There are regulated Forex brokers as well as off shore unregulated Forex brokers, which is different by bonuses and the market campaigns, because it’s a most common ways to attract new customers. But usually it goes with restrictions so that traders need to meet the minimum volume requirements, which can be really big. And this becomes impossible for newbie traders with small deposit. The spreads or commissions and swaps, trading conditions and the markets available for trading – all of those factors playing a role.
Interesting that nowadays around 90% of successful Forex traders use robots to help them make money.
In 2014 all Forex traders felt shock connected to events that many have called the “perfect storm” in the Forex industry. These events have become a very rigorous test of the strength of brokers in the CIS countries, and much of this verification has not been made. Bankruptcy has hit a lot of Forex brokers, including IG Group, Excel Markets, Alpari UK and others. Firstly, the Swiss franc has risen by almost 30% in chaotic trading after the central bank has refused to exceed the exchange rate against the euro. As a result companies were left without money and could not meet their obligations to customers. Most companies have announced their financial failure.
Okey, so you have been ignoring cryptocurrency for ages, but now you start understand that this is not only trendy and hyipe things, likewise an opportunity to become wealthy. According to Google Trends, there are more searches in Google around trading Bitcoin than for searches around trading gold or oil.
- Crypto trading
Considering volatility and the current state of the market, bitcoin trading is a much better option to enrich than invest in it.
You can trade on centralized and decentralized exchanges or at p2r services for exchanging fiat for crypt. To lower systemic risks, experts suggest reduce your presence on centralized services, in addition – completely exclude all US crypto services and very carefully use the services that require the verification of identity (KYC \ AML), even if the service allows you to perform certain operations without passing verification .
Starting conditions on crypto-exchanges are rather favorable for owners of small deposits. The minimum sizes of orders and the sizes of input / output generally is approximately 10-100 dollars in equivalent. But some exchanges make it possible to operate even with smaller amounts.
On the crypto-exchange you can enter with crypto and fiat or just crypto. Commission fees depend on the particular site. The most common values are 0.2% – 0.1%. Some exchanges may set a lower commission rate depending on the volume of the client’s trading for the period (month). As a rule – the crypto is entered to exchange without commission, but for the withdrawal of some crypto-assets, sometimes can be charged an absolutely awkward commission! And during periods of heavy network load it may be increased to several tens of dollars per transaction, compared with several cents in quiet periods. And it is not depend on the size of the amount.
For input and output of fiat it is necessary to pass procedure of verification of the person (for a binding of a bank card to service).
The list of the most popular bitcoin exchanges for today
Successful trading is all about discipline and ability to manage risk. While some consider BTC as the new world currency, others hold on to opinion that the Forex platform is more stable. However, there is one possibility to understand what is best for you, in particular, choose the one that suits your trading style better.