Topic: Why is crypto trading so similar yet so different from Forex trading? - page 2. (Read 665 times)

It's very simple why it's different, crypto has much more volatility than forex. Crypto is a very different market because the things that the results depend on is quite different. Also leverage is pretty heavy in forex. Talking about doing both I don't think it's possible to trade both. Both are 24 hours market and you'll be in a very difficult situation when you'll try to remember variables of both the markets so obviously it's not advisable to really trade in both the markets.

A bear market does not mean that the price is constantly declining. Each decline is necessarily corrected and this is exactly the time when a trader on the spot market opens a long. And similarly, such corrections in the cryptocurrency market, as well as in Forex, are very much influenced by news, which leads to a short-term price change.

Actually, good traders doesn't lose money during the bear market. It is just that they don't make good profits because of lack of upward movement of the coins. Since no appreciable movement is made by the coins, trading is always not interesting during the bull period.

Everything that has pros also has cons, it is undeniable that there are the downsides crypto trading and which should also be the reason some people prefer forex trading to it.

While on paper the two might seem very similar they are in fact not actually so similar. Technical analysis is a great tool to help us trade financial securities, it doesn't really matter if it is Stocks, Cryptos or Forex. As long as the financial assets have trends that we can identify with the technical analysis we can make a profit. The big difference in Forex and Crypto trading is in the fundamentals, which is probably why big Forex traders are not switching into the crypto world easily. When it comes to Forex trading it is very important to look at the local interest rates in a country, because you replicate any Forex trade with low risk government securities in a country. For example, if you trade US Dollars vs Euros, you already know today how the price will be in the future. Because you can sell your Dollar today and buy Euros, then invest them in government bonds with almost no risk for 1 year and get let's say 4% back. The profit you make then you can already today covert back with a contract in 1 year to USD to make a fixed profit. On the other side you have the US government bonds which for example make you 8% in one year. With that relationship you know today already that the USD in 1 year needs to rise more than the Euro because it offers higher interest rates. These relationships unfortunately don't are in the crypto world as we don't get any risk free interest with our coins. It's better to focus on one sector of the two and not at both at the same time in my opinion.   

Speaking about their difference, one that I also noticed is that crypto trading isn't profitable during some period of years and that's when the crypto market is in its bear market. Trading during this period aren't always profitable since the price of Bitcoin and other coins will keep falling and if you decide to trade, you'll end up losing. You can only make profits if you're using other advance trading method like future trading.

Meanwhile there's no time that trading forex can't be be profitable unless you're not good at forex trading because you can decide to buy a currency or sell that same currency depending on the news coming from the country that uses that currency, example if their economy is doing well, you buy.

They are almost the same but different also from each other like in cryptocurrency it is not regulated and so because of that you can not monitor news information but only rely on technical. The news you get from trading cryptocurrency is seasonal especially when there is some event or scam happening around the exchange or the whales but in Forex, you can really monitor it by checking the currencies of the country on the news and policies around them from their host country. There are more difference like the leverage used, technicalities etc.

There is almost no volatility in Forex and it is for this reason that high leverage is used there so that a trader has a real opportunity to earn 1%. In contrast to Forex, in the cryptocurrency market, you can earn even 5-10% without using leverage. And using leverage simply increases your profit in proportion to its size or increases the chance of getting liquidated.

I do not want to comment much on the similarity between cryptocurrency trading and forex trading because many people have already said something about this topic.

I want to come in about the differences between the above-mentioned two.
I am writing this based on experience because I came from the forex trading background and I lost so much in forex trading including using a fake bot that was meant to return huge profits on a daily and weekly basis.

The only reason I abandoned forex trading totally for cryptocurrency trading is that when you trade in cryptocurrency good pair of known currencies, even if you eventually run into losses, you could be patient for weeks months, and even for years and that particular coin may return again to make a new all-time high. By then you will run back into massive profit. This cannot be said in forex trading, whereby if the market is against you, you can count it to be for ever. That is the reason I prefer crypto trading to foreign trading.

However where does this increased risk comes from? And to me the explanation is the volatility we see on this market, while the stock market will go crazy if there was a 5% drop on a single day, we see those kind of movements on the price of bitcoin in a single hour all the time.

So traders used to a smaller degree of volatility can get their accounts destroyed in a matter of hours as they were unaware of the risks they were taking, and this means that anyone looking to make that transition needs to reduce their position size or face the consequences of such mistake.

Basically the two markets are almost the same but I think cryptocurrency is a much bigger risk,
specifically I only know the crypto market,
when we have trading knowledge I think we can apply it to both markets.

Forex market is volatile too with very high leverage. Cryptocurrenculy market is younger and has less regulations so developers, projects founders, whales and signal groups can manipulate price more regularly and more easily.

I see both markets are very volatile and risky if we use leverage for trading. Knowledge for trading, indicators are the same but each market has its different sensitivity with news. News can lift price up or dump it and can kill your position shortly when you are not aware of such news.

You could really actually do both if you do like on which these two are indeed markets and even including stocks and indices on which you could really make some trading or having this kind of market on which it does involved buying and selling.Their similarities? You could really be able to make use of those indicators on the same way on which you would really be finding about a good entry and a best time to exit. Are these things to be precise? No its not but its better to handle up yourself on a market on having these kind of tools on which it would really be that might helpful.It isnt really that something that would really be able to rely
but on the concept on how things should really be done then this is something that would be similar. The volatileness would be the actual difference in between markets on which on the time that you would really
be making out some trades in between markets then you would really be definitely noticing this one out.

if you will really stick to few markets, you can easily grasp what's going on, either forex or crypto market. and yes, you can do both. but the movement in crypto is much faster, so you always need to be on the look out what's happening around the crypto market.
if you will stay in some top forex markets, you won't be worried about disappearing such market because it won't.  i guess, the common technique in both is that the more you know about the market you are dealing with, the better you can come up with your financial decisions.

This question, yes, it's possible to do both, my journey started from the CRYPTO MARKET, and the FOREX MARKET was looking kind of difficult to understand, not until 2022 I picked interest to understand how the forex market works, but the material I used in learning trading was all the knowledge of forex because FOREX came in before crypto.

before trading crypto, I first traded forex, analytically I think it's the same as using chartist technical analysis, and I don't completely abandon one of them, because both have different characteristics in terms of fluctuations, so it's just a matter of seeing which one enters the support area first and I bought it. I usually differentiate for these accounts, because in forex I only enter a maximum of 3 pairs, and accounts for normal crypto trading I use bitcoin and ethereum, which I think are easier to analyze because they have the largest capitalization

The main difference is that trading on the cryptocurrency market is associated with high volatility, which we do not observe in Forex. And despite the fact that you can use leverage both on Forex and on the crypto market, there will be significantly more liquidations on the crypto market.

Trading can be consider as gambling if you are just guessing your position and only depends on your luck, that’s why many compare this two. Crypto and forex have its own similarity especially with the risk and the trading strategy, though personally I prefer more to trade with Crypto as I don’t need to deal with any broker just to allow me to trade while in forex, it matters to have a good broker or platform for your trading activities.

Trying out to compare on how long forex market existed. Trying out to make some search and found this one.

Its earliest beginning dates back to the Babylonian period when trading through the barter system was practiced as a means of exchange.
The general conception is that Forex trading started in Amsterdam roughly 500 years ago.
http://History of Forex Trading[/img]]History of Forex Trading

So we do have the idea on when it had started on which trading up on forex is really that already old.It is really just that normal that those people who do make
out trades into other market would really be easily be able to switch up on trading with other market as well just like on crypto. The overall essence on how things
would should be done on trading up on a market then making some switch up wouldnt really be an issue.

I'm not aware of this that companies would stop there employees from trying to source for alternative means of income with trading of cryptocurrency. I think that will be against the freedom of the employees and I think it shouldn't be the business of the employer to look into the privacy of those working for them if they are not using the time for their paid job for trading. If they are performing their jobs effectively then no need stopping them especially if they are not trading while in office or in office hour.

Another reason is that one of them is a lot more common and been around for decades, whereas the other one is not so much. If you think about it, its currency exchange, its literally giving one and taking the other and vice versa, that's what forex is about. Humanity has done this since we invented money, probably before in other forms but since money was invented. Which means that its been perfected in many centuries, and for many decades it has been quite similar to what it is today and many economists worked on it. Crypto on the other hand is new, there could be some similar stuff to it, but that doesn't mean that it would be exactly the same, the result will always be a bit different and that's why its going to be a bit different for sure.