Forex Trading for Crypto Investors

Broaden Your Horizons With Our Forex Trading for Crypto Investors

One of the biggest markets in the world is the forex market. People have been investing in foreign currencies for a long time.

As technology has improved and more people have learned how to use it, many more traders have started investing in forex. In fact, active investors today often include foreign currencies in their portfolios.

Forex trading is full of interesting things. 

Trade safe

It is a market that is open 24 hours a day and has a lot of buyers and sellers. However, it’s a volatile and risky market– which is something you should know before you start trading.

As a crypto investor, you’re probably aware of it, given that cryptocurrency has similarities with forex trading.

Here at Pearl Lemon Invest, we know you can’t be an expert in forex trading in one night. That’s why we’re here to help.

Want to know more? Read on, or even better, get in touch!

The Similarities and Differences of Forex and Crypto

Given that you’ve already started investing in crypto, we understand that somehow you’re also interested in trading with forex or foreign exchange.

Many think the two types of investments are linked in some way. But if you want to invest in either/or, you need to know the difference between the two.

African american young business man analyzing stock market value

Since both are based on trading currencies, they have some similarities. But the forex market has been around longer than the crypto market. Having been around for a longer time, the forex market has been tested and proven more

The crypto market is still pretty new and volatile. That’s why you shouldn’t think of them as the same thing. It could end up being a lesson that costs a lot.

For a more detailed comparison, check out the following:

Market Participants

Not only do individual investors trade on the forex markets, but so do the government, banks, credit providers, and some multinational corporations.

On the other hand, crypto markets tend to have fewer players and less involvement from institutions and governments.

Governments, banks, investment funds, and corporations own much less of the bitcoin market than they do of the forex market. 

Young man analyzing graph stock market trading on digital tablet.

By looking at the split between market participants who hold bitcoin (the largest cryptocurrency by market capitalisation, and those who do not), we can get a sense of how little institutional or government organisations are involved in the cryptocurrency asset class.

It’s not very many. These investors hold less than 8% of all the bitcoin that has been mined.

To be fair, this only includes bitcoins listed on the balance sheets of public companies, private companies, institutional investors, banks, and governments. 

More could be held in bitcoin that can’t be accessed, such as bitcoin that has been lost or is stuck in a crypto wallet that can’t be opened. But even though this means that a higher percentage of bitcoins may be held by investors who aren’t retail customers, the data still shows that retail customers hold most bitcoins.

Market Size

Forex markets have more activity than any other market in the world. 

One of the most recent triennial central bank surveys from the Bank for International Settlements showed that more than $6 trillion was traded daily in these over-the-counter markets.

In the past few years, cryptocurrency markets have become very popular, but they still have much less volume and activity than forex markets. As of September 2021, the daily volume of all crypto markets was $3.2 trillion.

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Hours of Operation

The Forex market is open 24 hours a day, five days a week. Crypto markets have the same kind of nonstop action during the week and on the weekends as well.

Crypto markets are open 24 hours a day, seven days a week, 365 days a year.

Trading Pairs

The use of “trading pairs” is another difference between forex and crypto trading.

When you trade US dollars for euros, the exchange shows how much one currency is worth to the other. In particular, you’ll see how much of the first currency (base currency) it would take to buy one unit of the second (called the quote currency). You buy the base currency and sell the quote currency when you trade forex on a currency pair.

“Currency pairs” are trading pairs that involve the US dollar. “Currency crosses” are pairs that do not include the US dollar.

forex trading

In theory, the same rules apply to trading in cryptocurrencies. When you trade one cryptocurrency for another, like Ethereum/Bitcoin Cash (ETH/BCH), these are called “cryptocurrency pairs.” (Note that not all cryptocurrencies can be traded for other currencies, either real or virtual.)

Some cryptocurrencies can only be bought with other cryptocurrencies. To buy more cryptocurrencies, you need to know about these trading pairs. This lets investors arbitrage between trading pairs and compares how much different coins are worth.

High Liquidity, Volatile Markets

There are many ways in which the two types of investments are alike. This is also why the same kinds of investors are often interested in both markets. 

You can start out in either market with a small amount of money. This is a great place to start for newbies. If you haven’t traded much before, it can be hard to know when to buy and when to sell. This is the key to making money in either market. The price difference is how you make money when you buy and sell.

These markets are volatile and risky because different currencies’ rates change constantly. 

Working with stock market

Both forex and crypto have a lot of buyers and sellers, so if you’re a skilled and risk-taking investor, you can make a lot of money from both. 

Both markets are growing a lot right now, so if you want to diversify your portfolio, now is an excellent time to start investing

Just know that if you want to make real money here, you must be active in both types of markets. Investors who don’t want to do much work will want to look at other markets.

"Trading" Bitcoin on Forex

Several forex brokers say that people can trade, deposit, and withdraw money from an account that is based on bitcoin. 

But the way these brokers work may be against the law for Americans because cryptocurrency CFDs (Contracts for Differences) are not allowed in the US, and the UK’s financial regulator, the Financial Conduct Authority (FCA), has warned investors about these kinds of platforms.

Other forex brokers have said they can add bitcoin trading to their platforms. Still, since they are not based on BTC and trade other currencies, it is unclear if they are doing anything more than letting users buy and sell bitcoin through existing bitcoin exchanges.

Midsection of business man checking stock market on mobile phone
Stock market.

Investors are better off using bitcoin-based exchanges that trade in their national currencies until forex platforms offer a wider range of bitcoin options. These companies know more about the trading market and security requirements, and each purchase will likely have fewer trading costs.

Every time a user wants to buy a bitcoin, they must create a bitcoin account and transfer money into it. Buying bitcoin can take anywhere from three to five business days. This is different from how traditional currency exchanges work.

Still, you can buy at an agreed-upon price, meaning each transaction is locked before bitcoins are sent to an account. Each transfer from dollars to bitcoin or from bitcoin to dollars costs a base of 4%.

What Pearl Lemon Invest Does

Pearl Lemon Invest is, generally, a software provider. We provide aid when it comes to investment and trading. Some of the software we feature are the following:

Forex Without Actually Trading
forex trading

Falcon

The Falcon is a MetaTrader 4 trading algorithm that uses a one-minute time frame and is capable of trading all FX instruments.

The Forex predictor has a fixed trade size and trades in small amounts to limit your risk on the market. It will automatically place stop losses and take profits with each trade, making the strategy 100% self-sufficient.

Phoenix

Our Phoenix trades instruments by following the direction of trends. It uses direct market access to a broker’s pricing to find trending movements based on the number of orders at the broker’s exchange. Our algorithm automatically puts a stop loss in the market to limit the risk for our clients.

Forex Trading vs Spread Betting

Condor

Our Condor is suitable for traders who are willing to take more risks. It trades the EUR/USD on the hourly chart and tries to make money during the European session. The Condor tries to take advantage of the more volatile movements in the FX market to make more money from each trade.

For more information, you can check out our products HERE.

We've Got Your Forex Trading Covered

Forex trading has nuances that might not be the same as crypto trading. 

There might be some things that you’ll be confused about or unfamiliar with. 

But don’t fret-Pearl Lemon Invest can help you. 

We are an expert at forex trading and are very much willing to help you understand the process. 

Just give us a call. 

Discussing stock market data

FAQS

On the forex market, people trade the different currencies of the world. There are now a lot of forex brokers that will take bitcoin and other cryptocurrencies. Bitcoin trades benefit from the fact that the currency is anonymous and has a decentralised system of value.

Most people think trading in forex is safer than trading in cryptocurrencies since cryptocurrencies are more likely to have bigger market swings. These swings are much more anticipated in the crypto market because there is no central regulatory body and much less liquidity. However, there are pros and cons to both, and it depends on your risk appetite and which one is better for you.

For decades, the forex market has existed to have more built-in stability and liquidity. On the other hand, the cryptocurrency market can be more like the “wild west,” with high-risk, high-reward opportunities. 

Both can be good ways to make money, but one isn’t necessarily better than the other.