Decrypting Cryptocurrency
In the modern world, money is no longer just paper bills you can hold in your hand.
Currencies, wholly digital, have emerged in the internet age and carved out space in the market. Since the launch of Bitcoin in 2009, the popularity of cryptocurrencies has grown massively and Crypto trading has become a common gateway into the trading world.
Crypto trading is the act of speculating on the value of these digital currencies and their movement in the market. Via an exchange, you can buy or sell underlying coins, known as going long (buy) or short (sell). There are thousands of cryptocurrencies on the market but Bitcoin was the first and has remained the market leader ever since.
A recent BBC article illustrates the rising value of cryptocurrencies and Bitcoin, showing there is no better time to get involved.
Forex Trading vs Crypto Trading
Forex (foreign exchange) trading is the speculation of changes in traditional currencies’ prices and buying and selling like you would cryptocurrencies. Forex is one of the biggest, most traded markets in the world with trillions of dollars being bought and sold every day.
Many things bring forex and crypto trading together. They share the same basic premise: the buying and selling of currency. Both markets exist solely digitally and can be traded 24 hours a day, without being overseen by any central authority.
In terms of differences, forex has more money being traded as the currencies being used are accepted around the world. As of yet Bitcoin and other cryptocurrencies are not universally accepted as a legitimate currency. This can make it harder to find another currency to take the other side of the trade.
Due to this uncertainty crypto trading is a more volatile market, the price having a range of highs and lows in a short amount of time. The change in forex markets is narrower due to the volume of trades happening.
For more information on crypto trading, check out this helpful article.
The Ties that Bind
Whether you know one type of trading or the other, or are a complete novice to both, some key skills will help you master them.
An understanding of the market is key to conquering these forms of trading. Without having a good knowledge of trading and the often volatile markets, you could find yourself lost at sea. Putting in the time to research and analyse the market is vital.
Your ability to form solid trading strategies and build risk assessment techniques will also be invaluable. To become a success in either or both types of trading will require time and effort. Like with anything in life, if you want to be successful and make money off it, then treat it with the respect and dedication that you would a full-time job.
Crypto trading prepares you for the long term investment, forex is for short profit—the former riskier, the latter safer. Both give and take, but both rely on fundamental skills.
By consulting extensive forex guides all over the internet, you can learn the applicable skills and breach the gaps.
Where Next?
The surface around trading has barely been scratched here, where you go next in your trading life is up to you.
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