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Trading Cryptocurrencies on Forex

10:54 AM Oct 30, 2019
3617
Forex trading

Since the advent of cryptocurrencies, their popularity continues to grow. Every day you’ll find new ways to make money in this field. Cryptocurrencies have taken their niche in Forex as well. It’s time for us to understand the nuances of this type of trading.

How to Trade Cryptocurrencies on Forex?

In the foreign exchange market, cryptocurrency trading is no different from regular trading. Just like before, you get to work with currency pairs, charts, use a trading plan and a strategy. Depending on the amount of time you plan to spend looking at the charts, you can become a day trader or a scalper. In other words, if you are familiar with Forex trading you have all chances to build a successful career in cryptocurrencies.

What Affects the Price of Cryptocurrency?

When trading in regular currency, a trader always needs to stay up to date with the major economic news. Since cryptocurrency is a decentralized system, the economy and politics have no influence on it. Here’s what you should look at:

  • Market capitalization. This is the total market value of a particular cryptocurrency.
  • The number of available coins. All cryptocurrencies have limited amounts and usually enter the market gradually.
  • Integration. The introduction of cryptocurrency into payment systems, the ability to pay for goods and services with the cryptocurrency, etc.
  • Important events in the world of cryptocurrencies. These include changes in regulation in different countries, successful attempts to hack systems, etc.
  • Public opinion. Follow the discussions in the press because even that can affect the cost of the cryptocurrency.

The Advantages of Crypto Trading in the Forex Market

Today, you can make a profit on cryptocurrency in several ways: mining, speculation in exchangers, etc. Let's take a look at the benefits of making money in the Forex market:

  1. High volatility. Due to quite strong fluctuations in the market, you can get significant profits even in short trades on a daily basis.
  2. Decentralization. Since no one controls the cryptocurrency, no bank can artificially influence its price.
  3. Low costs. Due to the lack of banks as intermediaries, the total cost of each transaction is usually quite low.
  4. Easy access. To start making money you need only a small starting capital and Internet access.
  5. No economic impact. Cryptocurrency is not affected by most of the incentives that all other currencies are subject to.
  6. Security. When depositing and trading with cryptocurrency, you don’t need to provide details of your bank account or debit card.
  7. Lack of borders. Cryptocurrency can be freely invested from anywhere in the world and traded with a broker from any country.
  8. Low starting capital. On Forex, you can dive into trading even with small amounts of money.

The Risks of Crypto Trading in the Forex Market

Just like any type of speculation, cryptocurrency trading involves specific risks:

  1. Hacking. Since cryptocurrency is completely virtual, your wallet may well be hacked and your funds might be stolen.
  2. Technical failures. Problems with the blockchain or any other system failure can lead to unexpected losses. You can completely lose your funds simply by losing access to your wallet.
  3. High volatility and leverage. As with regular Forex trading, if the market goes against you then volatility and high leverage can lead to significant losses.

Why Do You Need a Broker?

Today, exchangers offer unlimited opportunities for making profits on cryptocurrency. However, due to the frequent technical failures and cases of fraud, it is much safer to trade cryptocurrency with a broker. It is important that you choose a proven company with many years of experience, which puts the safety of its customers in the first place.

In general, if you want to get consistent profits on cryptocurrency trading, you just need to behave like a professional Forex trader. Take into consideration the high volatility of this market and choose the appropriate trading strategy, develop a good plan and always follow it. That’s it. Believe me, you have everything you need for a successful career in the field of cryptocurrencies.

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terms Stop Loss news trading economical calendar major news release currency pair currency rate national currency trading journal trades profit/loss emotions news release positions size Expert Advisors platform trading robot cryptocurrency volatility day trading position size lot account types cent accounts Mini account ECN Copytrade ECN accounts swap-free minimum deposit order execution liquidity providers demo accounts real account low-risk trading EUR/USD economic calendar majors cross-currencies exotic currencies base currency quote currency quotes bid ask Brexit United Kingdom European Union GBP Euro GDP WTO price levels moving average 4-hour chart 1-hour chart bulls bears false breakout cross-currency USD price action pin bar trading inside bar trading hands off breakeven stop loss 50% stop loss pin bar high-frequency trading position trading swings breakout strategy trading style Entry order Take Profit hammer shooting star inside bar pinocchio bar head and shoulders harami risk 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breakeven pip point entry price chart candles weekly candle daily candle engulfing candle Doji W1 Coronavirus epidemic macroeconomics markets CNY Bitcoin gold Jerome Powell fears money management trading signals Charles Dow Dow theory primary trend Relative Strength Index signals market noise trading volume oversold/overbought corrections candle M30 GBPUSD GBPJPY pending order fundamentals Interbank order Stop order Limit order Standard account Interbank account liquidity provider M5 chart XAUUSD Chinese yuan flat US Dollar Fed Interest Rates inflation level XPTUSD platinum XAGUSD silver USDCNY Chinese Yuan instruments swap trading hours Buy Stop Sell Stop Average True Range ATR range sideways range price level trading scripts Excel tables entry point equity balance applications highs and lows RSI Fibonacci terminal server proxy OS Windows XP self-trading Forex advantages gap trading Fibonacci levels USDJPY Buy Limit Cherry Blossom market cycle mark-up mark-down consolidation distribution long positions short positions double bottom triple bottom double top triple top pattern signal presidential cycle Elliott wave Kondratiev wave Forex terminology quote standard lot mini-lot micro-lot cross pairs exotic pairs counter-currency terminology Margin Call long position short position buy sell candlestick chart bar chart line chart range market channel high low ADX OHLC patterns profit level martingale aggressive EAs VPS demo account EA tester MeaTrader 4 trading signal chasing the market clicking the button COVID-19 oil trading lot EUR cent account Forex mentor novice trader emotions control fear psychological level round numbers Key Levels indicator MetaQuotes iOS Android mobile trading mobile terminal VPS server financial portals day trader position closing short timeframe fast trading news site news portal FXStreet Investing.com Forex Factory ForexLive DailyFX CPI PPI economic indicators Non-Farm Payrolls monetary policy FOMC retail sales inflation rates program installation intuition apps ECN brokers market makers financial markets indices commodities stock metals trading robots Forex mentors confidence bias low-frequency trading set and forget end-of-day trading exit trade auto-trading OCO trailing stop auto-management competitive advantage partnership IB referral Introducing Broker Sub-IB EURGBP EURCHF Donald Trump Twitter exotics minors trading patterns wedges pennants triangles breakout trading range trading confident trading trading goals japanese candles stars morning star evening star Japanese candles inverted hammer hanging man abandoned baby spinning top spinning bottom bars harami cross engulfing belt hold sandwich piercing line dark cloud cover marubozu three black crows upside gap two crows inverted head and shoulders trading figure trading pattern spike bearish spike bullish spike Mrs. Watanabe beginner trader carry trading young traders women traders figures diamond divergent triangle symmetrical triangle reversal signal morning routine unusual trading tips useful habits breathing techniques meditation nutrition intermittent fasting productivity self-discipline multitasking rectangle sideways channel continuation pattern trend figure Alexander Elder John Murphy Jack Schwager limit order Three indians leaving Forex useful tips motivation on Forex risk trading consistent profits initial capital potential profit golden rule enter trade starting capital initial investment overtrading reverse pattern rounded bottom rounded top saucer inverse saucer financial intelligence financial education long-term investing investing high volatility