💰 Forex VS Crypto: Which One Is More Profitable To Trade?

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Should you trade Forex or Cryptocurrency market

Is Forex Trading Better Option Than Cryptocurrency Trading?

You’re at an important trading decision intersection. You either trade forex or cryptocurrencies because you want maximum profitability while keeping your risk at a minimum.

Both Cryptocurrency and Forex markets may be very lucrative. Knowing market dynamics, using a tested trading strategy combined with a risk-aware approach will bring success.

You may want to leave your current job and be free to do whatever you want. All markets can provide what you want if you spend enough time educating yourself.

If you want to learn which market is better to get rich faster than bad news for you!

Your chance of success is less than 1%. There’s no quick buck to make in any business. I’ve been trading both markets for a long time. Both markets are similarly challenging with some differences between them.

If you don’t agree with me and you still believe you can make large profits on a consistent basis. You can come back a year from today. I would love to see what you have achieved.

Slot machines are made for those people want to earn big money in a short time.

In reality, neither forex nor the cryptocurrency market can reward a bunch of newbies who have dreams of making a fortune.

I don’t mean you cannot make a fortune in the markets. You can definitely achieve it. Although it is not guaranteed you can be the next George Soros or Andrew Krieger, you can be profitable in the forex market.

What I want to say; building fortune takes time, hard-work, analytical thinking, solid trading psychology, and the most important good amount of experience.

It is a bumpy road that discourages many traders. Most traders quit before even trading for a period of 6 months consistently. Losing money is devastating and lets us judging ourselves although the path we follow may be true.

FX Delta helps you consistently ride the trend. Using FX Delta you can get the ultimate 1-click trade signals based on riding market trends, accompanied by the best risk-reward strategy and accurate timing entry.

In any type of financial market, for one to make money, one or more people must lose money.

For whom the remaining of this post may be helpful:

  • You have some understanding of how do financial markets work.
  • You want to start trading but cannot decide which market can be the best option for your personality and lifestyle.
  • You tried trading either one of Forex or Crypto markets and wonder what other people are doing in the other markets.
  • You randomly found this post and are interested in trading.

See that in any case, reading further can be really helpful to you. Because I promise to give you an in-depth perspective of both markets followed by my humble opinion in the end.

Let’s start by reviewing the liquidity of both markets.

Forex is the largest market in the entire world with a nearly $6 trillion turnover each day. It is the most liquid and most commonly traded market. While Cryptocurrencies are traded only $10-20 billion each day. The forex market has 1000x more liquidity over the Cryptocurrency market.

But why does liquidity matter for traders?

Liquidity is the factor that is usually taken into account by any investor before investing. The amount that is involved in the forex market is huge, and you can, therefore, cash-in any amount of money at any time. This is one of the biggest benefits of trading currencies.

You know the times you buy something and you cannot sell, or sell to someone to a much lower price if you place a market order. This is called an illiquid market.

Cryptocurrencies usually have liquidity problems. It is truer if you are dealing with the smaller cap cryptocurrencies that are not traded on major cryptocurrency exchanges.

cryptocurrencies are illuquid

Forex market is the best market in terms of liquidity it has. It constantly has buyers and sellers exchanging one currency for another currency.

I want to surprise you here with another example. I bet you traded forex before although you may say you never did it before.

Let’s assume you travel to Germany and want to exchange your Dollars to Euro because you need the local currency.

Exchange currency

You go to an exchange office and buy Euro for your Dollars.

Congratulations, you are a participant of the Forex (Foreign Exchange) market without even knowing about it.

Another benefit that liquid markets provide, technical analysis works much better due to an abundant amount of buyers and sellers available at any time.

That is exactly what many traders want!

We want to profit from markets by using technical analysis. At least what I do for a living. If you trade any market by using fundamental analysis this may not apply to you.

Does it mean we shouldn’t trade cryptocurrencies?

No, I don’t mean it. But, we cannot approach both markets as if both markets have similar characteristics.

Forex market usually has bigger participants such as investment banks, hedge funds, and large corporations.

big players

Although it is a plus, the forex trader should be more careful since it is constantly manipulated by those big players.

On the other hand, the cryptocurrency market is much younger compared with the forex market. Although there are also relatively bigger players exist called “whales“, they are nothing close to the size of investors in the Forex market.

The cryptocurrency market is not a good medium for those who have multi-billion dollars of assets to invest. Because they would increase or decrease the value of the asset enormously if they wanted to invest.

At least for now, the real whales leave the cryptocurrency market to the smaller fishes as a playground.

The Market Volatility issue, is higher the better or drives more profits?

The cryptocurrency market is more volatile in nature. This is due to the low liquidity it has. Moves in the cryptocurrency market are much bigger than the Forex market.

volatility

But, isn’t the more volatility better for us since it drives more profit?

Not really.

More volatility means you have less control of your trade. It may bring more profit but can drain your trading account very quick.

If volatility would be the only contributing factor for large gains, all major banks, corporations would trade crypto 7/24.

I would also add that using a well-calculated amount of leverage can easily bring the advantages of high volatility, without taking large risks.

The forex market has an ingredient called leverage that lets you control your own volatility.

Recently, a significant number of cryptocurrency exchanges started offering leveraged trading accounts. It is the most dangerous proposition to trade an already high volatile market with even higher speed.

Which market is affected by the News more profoundly?

Both Forex and Crypto markets are affected by the news. I personally don’t trade according to the news. However, I always know if any news event expected for the instrument I am trading.

News in the cryptocurrency market pops at random times out of nowhere. They usually spread like gossip, without even a significant reason.

If the developer of a crypto project decides to join another team you and not even on a priorly scheduled time. Not knowing when a news event expected may suscept your trade vulnerable to unusual volatility.

In the Forex market, you can have news calendars at your disposal, and you pretty much know beforehand what news is expected. Although you don’t know the effect of that specific news, you may take into consideration unusual changes in the market volatility.

Forex Trading Has Lower Transaction Costs Than Cryptocurrency Trading

In the Forex market, the transaction cost of the spread is already built into the price of the currency, with the spread being the difference between the selling price and the buying price of the currency.

Therefore, the transaction cost will also be lower and you can thereby save your dollars, pounds, euros, yen or whatever currencies you’re dealing in. Trading forex you will pay much less commission compared with trading cryptocurrencies.

All in all, the decision of trading crypto or the forex market entirely depends upon your individual preference. I have shared my opinion and my experience on the topic.

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Thank You and Have a Great Day!