If you have the intention of investing in the financial market this year, then do yourself the favour of reading this article to the end.
Although in NOWA Digital Academy we do training on both niches, we do recommend one over the other (especially for those who needs a steady flow of income within the shortest possible time) and in this article, you’ll know which, and why.
What is Cryptocurrency? Cryptocurrency is simply called virtual money or digital currency. It’s saved on the internet and can’t be touched with the human hands. There are thousands of cryptocurrencies and the most popular and most accepted is bitcoin (BTC).
Crypto trading is an exchange of one cryptocurrency for another. On an exchange (where trade is done), there are a couple of markets, viz: Bitcoin market, Ethereum market, and United States Detheda market. The most used market is the Bitcoin market, where altcoins (every other coin except bitcoin) is being exchanged for bitcoin.
Forex trading is an exchange of one country’s currency for another country’s currency and is done on the internet. The most popular currency pair is EURUSD. Although there are major currency pairs, trading other currency pairs doesn’t make you less profitable; what you need is a proper analysis of the market and knowledge of profitable entry and exit points.
In all these, we advise that you get the training first before venturing into any of the above-listed niches to avoid stories that touch the heart.
READ ALSO: The MMM of FOREX Trading You Must Know
Comparing Crypto with Forex Trading
The Crypto market is a very volatile market (especially during the bull run) that’s why people make/lose lots of money within a very short period of time. What causes this high volatility is buying and selling pressure which could be easily manipulated by whales – people trading with a huge amount of money.
Some whales do what is called ‘pump and dump’ – an act of buying a coin with huge amount of money to make the coin rise drastically within a short period of time; when amateurs see the sudden rise, they jump into the market, then the whale sell off his position and immediately, the coin falls flat, then the amateurs starts crying and you’ll hear some say ‘Crypto is a scam’.
One thing you should know about the Crypto market (especially now) is that it’s currently bearish, and if you make any profit now, it won’t be much. Usually, people buy low Sat (bitcoin value of an altcoins) coins and make 100 -500% profit within a short while (sometimes, 24 hours) but now, you could buy 10 Sat coins and in 3 months, all you’ve made is an additional 2 Sat but if you’re unfortunate, it’ll become 6 Sat.
Note: If you buy coin XYZ at 10 Sat, $20, and in 6 months it becomes 5 Sat (but still $20), you’ve lost money. The reason is that if you invested 1 bitcoin in that deal, at the end of the 6 months, what you’ll have is 0,5 bitcoin (I just hope you understand).
Although loses are not really loses in Crypto trading, as long as you’re holding a legit coin. If you could be patient enough, with time the coin will come back to your entry point and exceed it, but how long it’ll take for that to happen is what I can’t tell. Hence, Crypto could tie down your money over a long period of time (which is not very good for someone who’s trying to build his finances).
Now, the forex market:
Even though also volatile, it’s not as volatile as the Crypto market. The forex market is a long-standing market (since 259 BCE), it’s traded by huge financial institutions, central banks, hedge funds, commercial banks and individuals. It’s very stable, it can’t be easily manipulated. It’ll take a huge global event to affect the price of a commodity and (if affected) it’ll never be instantaneous.
Never a time will you see a commodity move just 2 pips (profit in points) for the whole day hence, good profit is guaranteed over a set period of time, depending on what kind of trader you are.
Both niches could be very profitable at the long term, but if you need a medium where you could build your finances and solve your immediate financial needs at the same time, I’ll recommend you go for forex.
But, DON’T TRY TRADING WITHOUT PROPER TRAINING, that’s called GAMBLING.
ABOUT THE WRITER
© Nsikak Akpan
(a.k.a President Noah)
Lead Tutor, NOWA Digital Academy