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Forex vs Crypto Differences and Similarities

Each tradable instrument offers a unique trading experience, which is why it’s important to know which instrument is best for you. Continue reading our Forex vs crypto guide to discover which instrument you should trade and why you should trade with CAPEX – the best online broker for CFD trading.

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Roy Connor
Author:
Roy Connor
Last Updated on:
01/12/2024
Topic:
Trading
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Wide range of tradable instruments

Having the option to invest in several markets allows you to diversify your trades and potentially reduce the risk of loss. Here at CAPEX, you can invest in over 2,100 instruments through CFDs, whether you’re interested in stocks, Forex, commodities, or crypto. Plus, we offer a demo account for each instrument you can trade on our platform, where you can experience and practise trading before you invest any capital in actuality.

Smooth and stable trading platform

Signing up on a trading platform that is user-friendly can make your trading experience a whole lot better. Here at CAPEX, we offer our traders two trading platforms – MetaTrader 5 and CAPEX WebTrader. Both of our trading platforms are highly intuitive and have a simple user interface, plus you’ll find integrated tools on both platforms that are designed to support traders as they invest—our aim is to provide users with a smooth and efficient trading experience.

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Trader’s guide on Forex

Forex refers to the foreign exchange, which is a decentralised market that deals with the exchange rates of currencies across the globe. While there are several reasons for someone to exchange currencies, Forex traders make a profit from the volatility of various currencies.

How does a trader profit from Forex?

For instance, if USD is expected to increase in value whereas GBP is not, the trader will exchange GBP for USD. If their speculation is correct and the USD does rise in value, they’ll end up in profit. Some brokers also offer high leverage on Forex, allowing traders to make more significant investments.

 

Factors influencing Forex Trading

Graph Shape

Important political developments

Tax changes

Consumer & producer preferences – CPI or PPI reports

Interest Rate Decisions - Bank of England MPC Announcements, Fed Interest rate Decisions, etc.

Other market-related FX news

Visit our Special Articles page for the latest market news on cryptos, stocks, indices, and more!

Pros and cons of Forex trading

Trading Forex has some benefits over crypto:

  • Forex can be traded with high leverage
  • You can make fast profits through Forex trading
  • Forex is simple to understand

However, it also has a few drawbacks:

  • Limited trading options
  • High risk due to high leverage
  • There are numerous factors that may affect a currency’s value

Trade Forex CFDs at CAPEX

Here at CAPEX, we offer CFDs on Forex along with numerous learning tools to reduce the risk of investing. For instance, you can sign up on our Forex demo account to learn to trade and practice trading strategies.

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Trader’s guide on crypto trading - Brief crypto guide

Cryptocurrencies refer to digital currencies that rely on a decentralised system known as the blockchain. The first cryptocurrency was Bitcoin, which was introduced nearly a decade ago by an anonymous man who’s identified as Satoshi Nakamoto.

Ever since Bitcoin’s inauguration and massive success as an investment, several cryptocurrencies have emerged, including Ethereum, Litecoin, and Dogecoin. While cryptocurrencies are highly volatile in nature, crypto traders can use this volatility to make a profit.

Most crypto trading happens on crypto exchange platforms, and some brokerage firms offer crypto trading services as well. Here at CAPEX, we offer CFDs on several crypto instruments, including Bitcoin, Ethereum, Cardano, Stellar, Chainlink, and Litecoin.

Pros and cons of trading crypto

Crypto trading has some advantages over Forex:

  • Cryptocurrencies can be traded with high leverage.
  • If you’re lucky, you can make highcapital returns on your investment.
  • There are a decent number of cryptocurrencies that you can invest in.
  • Investing in crypto is super easy, thanks to the number of tools that are offered to help traders.

Nevertheless, it also has a few disadvantages:

  • The crypto market is highly volatile.
  • There are many factors that affect a cryptocurrency’s price, including regulation, supply & demand, and adoption.

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Experience a new level of trading with the right support when you need it. Sign up for a free account and trade smart with CAPEX.com.

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Forex vs crypto: Differences and similarities

Trading Forex and crypto are quite similar because you’re exchanging currencies in order to make a profit; however, the main difference is that Forex trading is done with fiat currencies, and the Forex market is decentralised; whereas crypto trading refers to the exchange of digital currencies that aren’t decentralised by an authority or financial body and rely on blockchain technology.

Another difference is that the crypto market is more volatile because there are more factors that can affect a cryptocurrency, including crypto news and happenings such as a tweet or message from Elon Musk. On the other hand, the factors that affect a fiat currency are mostly economic, environmental, or political. Plus, cryptocurrencies don’t have any underlying value; and instead, they obtain value through adoption.

Here at CAPEX, we offer traders over 55 currency pairs and over 20 crypto instruments that can be traded through CFDs.

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Forex vs crypto - Which instrument should you choose to invest in?

No instrument is better than the other; rather, each financial instrument has its own pros and cons. When it comes to choosing which instrument is right for you, it comes down to what you’re looking for as a trader.

If you don’t mind trading with higher risk and want to invest in a highly volatile market, crypto trading might be the right option for you. Meanwhile, if you want to trade with slightly lower risk and don’t mind limited trading options, then Forex trading is simpler and might suit your trading needs.

You can hop on to our crypto demo account or Forex demo account to experience each instrument and decide which one suits your trading needs better. Or, if you want to diversify your trades and would like to invest in both of these instruments, you can do so with ease on CAPEX.com.

Knowledge is Power!

When it comes to your money - it's priceless.

An investment in learning how to trade always pays the best dividends. Get access to the right resources, tools and information so you can trade with all the information available!

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INTRODUCTION TO FOREX

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13:20

FOREX INDICATORS

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13:20

FOREX CANDLESTICK GUIDE

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14:38

UNDERSTANDING AND USING FIBONACCI

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04:20

FOREX CHART FORMATIONS PATTERNS

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14:27

TIMING IN FOREX

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06:20

CRYPTOCURRENCIES

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82:25

How to trade CFDs securely

While CFDs are high-risk instruments, there are a number of tips and tricks through which you can invest in them securely and profitably. For instance:

Choose a secure broker

The broker that you choose to trade with plays an essential role in shaping your trading experience. Make sure that the broker you choose to trade with is registered and licensed with a tier-1 financial authority and offers sufficient learning tools.

Here at CAPEX, we are licensed and regulated under Cyprus Securities and Exchange Commission (CySEC), which is a tier-1 financial authority. Also, we at CAPEX are licenced and regulated by the Seychelles Financial Services Authority (FSA), the Financial Sector Conduct Authority (FSCA) and the ADGM Financial Services Regulatory Authority (FSRA). Plus, we offer our traders several learning tools, including an online trading school and a CFD demo trading account.

Practise on a demo account

Trading on a demo account feature is an effective way to highlight where you stand in terms of trading knowledge and allows you to further polish your trading skills. It also helps traders understand the risks involved with trading a specific instrument. Here at CAPEX, we offer excellent demo accounts for each type of trading account we offer on our actual trading platform. You can sign up on our demo account for free and experience trading with zero risks.

Diversify your trades

An effective way to reduce the risk of loss is through diversifying your trades. Even if one of your trades doesn’t end up well, you can cover up the loss through another investment that might have been profitable. Here at CAPEX, we offer over 2,100 tradable instruments, allowing traders to diversify their trade and broaden their trading portfolio.

Focus on continuous development

Ask any expert trader how they reached their current trading level, and the answer will always be the same – ongoing learning. When it comes to investing, the more you know, the better you invest. Here at CAPEX, we offer several learning tools to allow our traders to continuously learn and benefit from that knowledge as they continue to trade. This includes an online trading school, trading dictionary, and expert trading blog.

Take one step at a time

The last thing you want to do is get excited and invest all of your capital into an instrument. This can be an extremely risky move because the chances of facing loss can also be pretty high. The best thing to do is make smaller investments and grow those investments slowly and gradually as you gain expertise in a market. Plus, we suggest that you invest in markets that you’re familiar with or make yourself familiar with markets that you want to invest in.

 

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Sign up with CAPEX today

Signing up for an account with CAPEX is extremely easy. All you need to do is jump onto our sign-up page and enter a few basic details such as your email address, name, and age. Then we’ll ask you to complete your registration by providing a few more essential details, including your salary and taxation information.

The last step is an assessment that is designed to assess your trading skills. We then place each trader onto our platform according to their trading experience. Once you’ve completed the sign-up process, your account will be set up and verified in no time. You can then invest as little or as much as you want in numerous markets.

Final thoughts – Trade CFDs on Forex and crypto at CAPEX

While choosing which instrument to invest in can be challenging at first, it all comes down to analysing the differences, similarities, pros, and cons of each instrument; then deciding which instrument aligns with your investment goals the best.

If you’re looking for an instrument that is simple to trade but offers lesser trading options and is moderately risky, then Forex trading would suit you. Alternatively, if you want to invest in a highly volatile market and don’t mind risk as long as there’s a chance of high returns, then crypto trading would suit you.

However, if you’re still confused, you can hop on to our demo account feature and experience trading both of these instruments to decide which one suits your trading needs better. You can even invest in both of these instruments through CFDs with us at CAPEX. So, sign up with us now and experience trading on over 55 Forex pairs and 20 crypto instruments today.

Forex vs Crypto – FAQ

🙌 Is crypto trading risky?
😏 Can Forex CFDs make you rich?
🙋 Is trading with leverage beneficial?
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