Bitcoin vs. Forex: Trading cryptocurrencies like Bitcoin can prove to be a great way to make profits. However, many traders imagine they can make a profit by trading the major currency pairs only. Things started to change when traders and brokers realized how lucrative cross pairs can be. Many people started trading cross pairs because of the high level of market volatility.
Now let’s take a look at Bitcoin. If you carefully observe the instruments that well-regulated brokers offer, you should be able to find Bitcoin and other famous cryptocurrencies in their tradable assets list. Bitcoin has become a very popular asset for both traders and investors due to the widespread adoption of Bitcoin and digital currencies.
Moreover, the high volatility in the crypto market is also an attraction for many traders and investors. Traders buy when the price is low and then sell when the price goes up again. This way they can make profits from the price changes in the market. This task can be made even easier with the help of an automated trading platform, such as Bitcoin Prime (bitcoinprime.io).
Such trading platforms will perform trades automatically on behalf of the user and take into account many underlying factors in order to take advantage of every opportunity that comes up in the market and make profits for the users. Let’s look at some reasons why you might want to consider trading cryptocurrencies like Bitcoin over currency pairs.
Many traders who do not have enough skills or experience in the crypto market don’t understand the importance of volatility. You should learn to find the volatile pairs if you want to keep making profit as a trader. It might be a little difficult to select the pairs when it comes to trading in Forex, but if you start trading cryptocurrencies like Bitcoin, you will not have to worry too much about this.
It is recommended that you learn about the technical and fundamental analysis before you enter the crypto market as a trader. You will soon realise how important it is to learn these two major analysis techniques. Remember that knowledge and skills are your two friends in the crypto market.
Easier to understand the market
You might often get frustrated when analyzing the trends in the market when you start trading the major Forex pairs, but if you trade Bitcoin or any other cryptocurrency, you won’t have to worry about a lot of trends in the market. For instance, buying Bitcoin or a cryptocurrency and holding it is one of the easiest ways to make a profit. Though it might be a little difficult in understanding the factors that cause high volatility, you can still easily learn to perform trades in the market through paper trading.
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A paper trading account will provide you with the perfect learning ground, and you can easily develop your skills as a trader. If you have experience in the forex trading business, trading cryptocurrencies should be easy for you.
Vulnerability to high impact news
You will know how important fundamental analysis is if you have been trading in the Forex market. It’s very hard to predict the price changes without assessing the fundamental factors. You should keep yourself updated with economic news all over the world, otherwise you might have to lose some of your trading capital.
On the other hand, with cryptocurrencies there is no need to deal with so many different news. Even though staying up-to-date with what’s happening in the world of cryptocurrencies will help you, you can still expect to profit by just having fair knowledge of the technical parameters.
Low leverage trading account
Forex traders who trade currency pairs will in most cases only get access to a high leverage trading account. Many people do not realise that trading the market with high leverage will also increase the risk to a great extent. When it comes to trading in the crypto market, individual traders might not be able to access a high leverage trading account.
It is important to have enough knowledge before you start to trade cryptocurrencies.
Even though high risk and high reward are correlated, this is a good thing. You might not even have enough funds to be able to open big trades. With a low leverage trading account, you will not be exposed to high risk. A lot of people are looking to make quick money and they might want to do so by executing big trades out of frustration or based on emotions like greed. These emotions will not be there when you’re trading with a low leverage account.
As we have mentioned above, it is important to have enough knowledge before you start to trade cryptocurrencies. Start by trading Bitcoin with a paper trading account until you feel confident. Stay updated with the crypto industry by subscribing to a crypto news website. As you continue to learn more about the crypto market, you will be able to make better decisions on your trades and make more profit.