Why Crypto Traders Should Consider the Forex Market

If you're in the crypto market, you already know it has taken a turn for the worst in recent months.

00:30 16 December 2022

If you're in the crypto market, you already know it has taken a turn for the worst in recent months. The second largest exchange has crashed, Bitcoin is worth a fraction of its former price, and trust in the digital currency is at an all-time low. If you're a crypto investor, you might be looking for investment opportunities in other markets, such as forex trading. 

Like crypto trading involves the exchange of digital currencies, forex deals with the buying and selling of fiat currencies from around the world. Many times you can also trade both cryptocurrencies and foreign exchange with the same cryptocurrency broker in the UK. 

But unlike crypto, there is no central exchange, and transactions run on secure, interconnected bank networks. The industry is also much less volatile than crypto and represents a more reliable investment opportunity.

1. High Liquidity

The forex market has the most significant daily notional value of any financial market. This means it's highly liquid and can conveniently fill large currency orders without causing too much volatility. When prices don't deviate too much, you reduce instances of price manipulation, which as a crypto trader, you might know a thing or two about. 

This also means that spreads can be tighter, and you can rely on the price of currency pairs to stick to certain ranges unless affected by major events. As such, you don't have to worry about high volatility or the unpredictableness that has epitomised the crypto industry. 

1. Low Costs

Forex brokers don't charge fees and commissions on currency trades and rely on spreads between currency pairs to make their profit. As such, there are no separate brokerage fees to worry about, which greatly enhances your ability to profit when trading in the forex market. Furthermore, picking one with low spreads will allow you to trade currency pairs while experiencing lower overheads than in other markets, such as equity or crypto.

1. More Secure Than Crypto

Cryptocurrencies are still in their early stages, and most people are just starting to comprehend what they are and how they work. In some instances, regulations around the industry are loose, if not nonexistent, which makes it challenging to regulate and control the sector. This makes the industry high-risk and difficult to navigate, and it has been challenging to set the proper framework to govern players in the sector. 

In contrast, the forex market is based on the financial system everyone already trusts and uses. Regulation around the sector is well stipulated, and everyone understands why currency pairs trade the way they do. 

1. It Suits Different Trading Styles

The forex market offers different strategies you can use to help you reach your goals and objectives. For instance, day trading can allow you to quickly enter and exit multiple positions daily to make fast returns. At the same time, swing trading allows you to hold positions for extended periods, which is perfect if you only have a little time. 

Furthermore, the forex market is active during different times of the day depending on time zones, and you can plan your trading sessions on your most preferred. 

1. Variety of Currency Trading Pairs

The forex market hosts 28 major currency pairs of the eight most prominent currencies. You can use timing, volatile patterns, and evolving domestic and international issues to help you pick and choose which to trade. Unlike crypto, you can trust all these currency pairs and have peace of mind in their ability to pay out and still be around the next day for repeated performances. 

1. Ease of Entry and Established Brokers

Forex trading is relatively easy to learn and get competent at. There are a lot of excellent learning materials on the internet and multiple books that can assist you in getting up to speed. As we had already mentioned, the cost of trading is less limiting than other forms of trading if you're looking for a crypto alternative. Any amount of capital will allow you to get started, and you will be surprised by its ability to enable you to build a good portfolio. 

Furthermore, multiple brokers and well-established financial institutions in the UK will assist you in getting into the forex market conveniently.