Crypto vs Forex

MN Trading
MN Trading Beginners section
4 min readAug 16, 2023

The crypto and Forex markets are two completely different markets, each with its own advantages and disadvantages. This document has been written with the current state of both markets in mind, particularly when the price action in the crypto market is sluggish and the volume is low.In this document, I will explain the attractions of both markets and share how I use both markets for trading.

Furthermore, this document may assist you in deciding which market suits you better. The crypto market, due to its extreme price movements and high volatility (percentage-wise), is not suitable for everyone. Trading de the crypto market often involves more emotions than other markets.

Market Hours

The cryptocurrency market operates 24/7, meaning it is active all day, every day, including weekends and holidays. Forex trading, however, follows specific market hours based on different global trading sessions, and it is closed on weekends. Trading the FX market often provides a trader with more peace of mind because they don’t have to monitor the market 24/7 and don’t feel like they are missing opportunities since the market is most interesting during certain hours, which we call a trading session or killzone. On the other hand, trading the cryptocurrency market often brings more stress to the trader because they may hold positions overnight, disrupting their sleep. With FX trading you often don’t have that issue since you typically close your positions after a specific session.

Volatility

People always say that the cryptocurrency market is highly volatile, which is partially true. The cryptocurrency market is characterized by explosive price increases and decreases, which are proportionally larger. This is what people perceive as volatility. However, they forget that the crypto market can also be very slow, as we have experienced in recent months. Due to the lack of liquidity, volatility in the cryptocurrency market has decreased significantly, making the market challenging to trade.

Trading Opportunities

People find it increasingly difficult to trade the crypto market, especially now the markets are illiquid. For example, when we look at BTC, we see that sometimes BTC does nothing for days, and then suddenly, a super volatile movement occurs. You have to be lucky to be at your PC at that specific moment and that it doesn’t happen during the night. In contrast, FX has volatile price movements every day, especially on the lower timeframes.

Technical Analysis

From experience, I can say that FX respects S/R levels and liquidity levels better than the crypto market, especially on the lower timeframes. In my opinion, this is because there is more institutional money circulating in the FX market, and algorithmic trading is active. On the other hand, in the crypto market, prices can sometimes drop right through strong support and resistance levels simply because a whale executes a large market. Due to low liquidity, even a small amount can have a significant impact on the price movement of a cryptocurrency, making the market susceptible to manipulation. TA on higher timeframes works very well on both markets, and I see no differences there.

Price Determination

In forex trading, currency prices are influenced by various factors, including economic indicators, geopolitical events, and interest rates. Cryptocurrency prices, while also influenced by some traditional market factors, can be significantly affected by sentiment, technological advancements, regulatory news, and adoption trends.

Conclusion

If you are looking for a market where lower timeframes are well respected, I recommend FX. Additionally, FX offers more opportunities as price levels are better respected, and there are more chances compared to the crypto market. FX also provides more peace of mind since you can stick to specific trading hours that suit you best, instead of dealing with the 24/7 nature of the crypto market. However, if you enjoy taking risks and are looking for a market where you can quickly build capital, then trading crypto may be more appealing due to its significant swings (percentage-wise, especially attractive for investors). Personally, I choose to use crypto primarily for higher timeframe trades and swing trading. I use FX for day trading and scalping. Please note that everything I shared in this thread is my very own opinion, and I am speaking from my own experience. I have traded both markets long enough to form an opinion and weigh the pros and cons.

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