Are you looking for an entry into trading? If the answer is yes, you've probably realized that you'll need to start from a market you can easily access. While those who are after security and long-term returns will do better to learn about investing in stocks, day trading offers great promise to those who are ready to put in the work. And currencies can be particularly lucrative.
Both Forex and Bitcoin make for excellent options. But how do you know which one is better? Well, that depends on a number of factors. Here are the main things you should know about Bitcoin and Forex.
What are they?
Forex is an international market in which traders can buy and sell currencies issued by national banks. It's one of the most liquid markets in the world with high volumes of daily trades, amounting to about $5 trillion per day. The market is open 24 hours per day, five days per week, making it an excellent choice for traders from all over the world. Additionally, it allows traders to choose their preferred currency pairs to trade. Its biggest centers include London, New York, Frankfurt, Singapore, Hong Kong, and Sidney.
Bitcoin is also a currency, but it's a cryptocurrency that's completely independent of banks and national institutions, and thus operates with its own set of rules. Although to many, this makes it seem unreliable or unstable, in truth, it can be just as lucrative as Forex, as long as you know what you're doing. Plus, it's open 24/7 so you can truly trade any time, anywhere.
The essential features of Bitcoin vs. Forex
At first glance, the two are quite similar, apart from standing for a different type of currency. Both options offer high volatility. This means that they're rapidly changing, which gives traders the opportunity to make money, even in the short run.
In terms of liquidity, you'll find that Bitcoin can be more difficult to turn into cash. Although a growing number of businesses accept it as a way of payment (Wikipedia, Burger King, Microsoft, AT&T, etc.), it's still not possible to use it to pay in most physical stores, nor (directly) on Amazon. It's also important to note that there is only a limited amount of Bitcoin available worldwide, which means that some traders will prefer to hold positions for the long term.
What do I need to get started?
To get started with Forex trading, you'll first need a brokerage account and starting capital. You don't have to have much to make a nice profit, but make sure you're only trading with money you can afford to lose.
As for Bitcoin, the procedure is similar. You'll also need to create a trading account with your crypto exchange of choice. The one you choose will depend on your location, preferences, and objectives. Along with that, you'll need to provide several forms of identity verifications to fund your account, as well as have an online or offline wallet to keep your currency safe.
What about risk?
As with any other trading that relies on stock volatility, Forex and Bitcoin come with a set of risks. Consider the fact that although volatility may work in your favor, it's also quite certain to go against you at some points. That's why you'll need to develop a strong strategy before you even get started. If you're a person who can't keep a cool head during stressful situations, this line of work is not for you.
Furthermore, make sure you're choosing a reliable broker. Do your research thoroughly so that you don't open yourself up to unnecessary risk. Although brokers operating off-shore offer higher benefits on paper, they're also not regulated by a government body, which makes you vulnerable.
Last but not least, keep in mind that Bitcoin is, essentially, a very young type of technology. This makes it unpredictable. No one can know for certain whether it's better to approach it with short or long-term gains in mind. That being said, you probably don't want to put all your eggs in this particular basket.
Final verdict
As you can see, both Bitcoin and Forex offer excellent opportunities for those who are ready to roll up their sleeves. Still, it's quite important to approach them as any other risky business venture – which means you’ll want to thoroughly think your strategy through before putting your hard-earned money on the line.
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