What should a beginner choose for trading Forex, currencies or cryptocurrency?
Very often, the result of the business you start depends on the right choice, so when starting Forex trading, you should first decide what assets you will work with.
The broker's trading platform currently includes many different assets, with only currencies and cryptocurrencies traded on Forex.
Many novice traders are interested in what is best for a beginner in order to understand the essence of trading in the foreign exchange market and learn how to make money.
In order to make the right decision, you need to compare the advantages and disadvantages of trading currencies and their digital analogues.
Volatility – cryptocurrencies are clearly regulated here; if for standard currencies daily volatility rarely exceeds 1%, then for cryptocurrencies a volatility of 10% does not surprise anyone.
That is, we can say that there are greater prospects for earning money with cryptocurrencies, since the price can change by several tens of percent in a day.
Leverage size – now you rarely see a broker providing leverage on cryptocurrencies of more than 1:10.
At the same time, for standard currency pairs the average leverage is 1:500, while there are brokers that provide leverage of 1:3000.
Therefore, if you use a large leverage, you can easily equalize the volatility of currencies and cryptocurrencies.
Spread size – in this category, conventional currencies are clearly the leaders; the spread for standard currency pairs is several times smaller than for cryptocurrencies when comparing the same transaction volumes.
For example, for a transaction on the eur/usd currency pair with a volume of 1 lot, you will need to pay 10-20 dollars of spread, if you convert 1 lot of eur/usd into bitcoins, then this is approximately 2 bitcoins, opening a buy/sell transaction with a volume of 2 bitcoins you pay 120-180 dollars.
That is, we can say that trading cryptocurrency is much more expensive, but this is only at first glance; due to high volatility, the price quickly compensates for the spread paid.
Scalping – if you compare the size of the spread for opening transactions, then you can say that scalping on cryptocurrencies will cost you more.
But you can earn many times more on cryptocurrencies, and scalping is used specifically for quick earnings, otherwise the use of a scalping strategy loses its meaning.
Automated trading – unfortunately, at the moment there are not many advisors designed for trading cryptocurrencies. Advisor for Bitcoin https://time-forex.com/sovetniki/st-bitkoin
Therefore, if you plan to completely delegate the opening of transactions to a robot, you will have to choose classic currencies or invent an advisor for cryptocurrencies yourself.
My own opinion – lately I’ve been liking trading cryptocurrencies more and more. Perhaps the reason for this is the chosen trading style.
I prefer to wait for the price to drop to a minimum, and then make a buy trade, then set a trailing stop and close the trade when the downtrend begins. If there is no doubt that the price will fall, a sell trade is opened.
In my opinion, trading cryptocurrencies is more interesting, but this is only a matter of taste, in order to understand what is right for you, try trading regular currency for one month, and a second cryptocurrency. Perhaps this approach will help find the right solution.