★ Forex or Crypto Currency Trading?
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Forex or crypto currency trading? Which one is better? Which is riskiest? Which is better: Trading Forex, Stock, Metal or Crypto? s it riskier to day trade Forex, Stocks or Cryptos? How risky is it to day trade crypto currencies? Is it possible to daytrade cryptocurrency at all?
Differences crypto trading vs regular currencies. Bitcoin traders, why don’t you just trade forex? In this video we discuss the pros and cons of cryptocurrency trading vs. forex trading?
– Let’s compare the volatility of forex pairs and stocks compared to cryptos. We know that some exotic pairs and certain indices can be very volatile. If a market is very volatile it doesn’t mean that you cannot trade it but you need to reduce the position size.
– The Instrument List – if you’re trading a stock like Apple it is unlikely to suddenly go down 20%. It could do such a move but the likelihood is low. If you’re day trading cryptos you have to be aware of the market you’re trading. Crypto currencies are generally driven by sentiment and news – this can push the price significantly one way or another. You have to be aware that sudden swings in cryptos are much more likely and aggressive.
– Execution Risk – If you’re trading on an exchange and you’re buying bitcoin or ethereum you have to understand that you’re not likely to get the same kind of fill in terms of speed/cost/slippage compared to trading a stock on an exchange or a liquid forex pair. As such there is more execution risk when trading cryptos.
– Counterpartyrisk – this is higher when trading cryptos although there are ways to reduce it.
– Profitability potential – we want to make as much money as possible with the least risk possible. We could argue that there are lots of retail participants in cryptos so they could be more predictable.