Since I have started reading about financial markets, my life has changed. In early years of my online ventures, Forex market has fascinated me and I was able to make good money as well. In 2016, I came across another interesting market which is crypto market. The evolution of this market has put me in dilemma to make my choices in both markets.
I know that this dilemma is faced by many of financial markets enthusiast and I though to write few things about both markets so new people can know some basic idea about these market and decide according to their mindset that which will suit them better.
I will be talking about how both of them work and what is good for one market isn't always good for the other i.e a lot of traders make a great amount of money from trading bitcoins but cannot replicate the same success in trading Forex.
So without wasting any more time, let's jump into it & see what these markets are all about.
Crypto Market
Cryptocurrencies like Bitcoin, Ethereum and Litecoin etc work on a decentralized network that allows users to make transactions without any third-party interference. Transactions are made with the help of blockchain technology which is a public ledger of all the cryptocurrency transactions.
This makes cryptocurrencies very secure as it is almost impossible to hack the blockchain. Transactions are also very fast and can be verified in a few minutes.
Forex Market
Forex on the other hand, is a regulated market where central banks and governments control the flow of money. Transactions are made through brokers who match buyers and sellers of currencies. Forex is considered to be much more risky than cryptocurrencies as it is possible to lose your entire investment in a single transaction.
To become a successful trader, you need to study technical analysis & need to know how different indicators work like RSI , moving averages etc. You also need to learn how to read charts because that's where you get all your information.
However, because of the regulated nature of forex, transactions are much more stable and less susceptible to price fluctuations.
Which market is better?
Cryptocurrencies are definitely better for those who are looking for a high-risk high-reward investment. The volatility in the cryptocurrency markets allows traders to make large profits in a short period of time.
Forex is better for those who are looking for a more stable investment. The regulated nature of the market means that prices are less volatile and it is possible to make consistent profits from trading Forex.
Overall, both markets have their own advantages and disadvantages and it is up to the individual trader to decide which market suits them best. I would suggest newbies to try crypto markets because it gives you opportunity to start with small investments and make decent returns.