Top 10 Lessons We Learned About Online Trading in 2021

Theres no doubt that the financial world is different today than it was 3 or 4 years ago. The emerging new technologies and FinTech solutions redefined what investment is. The pandemic has complicated economic forecasting, and markets are experiencing unpredictable inflation rates. The cryptocurrency market is rapidly changing, and traders are witnessing new trends such as NFTs.

Trader Should Be Ahead of The Game

The first lesson to learn from online trading in 2021 is that traders should be ahead of the game. Overcoming the challenges is the number one skill for traders and investors. The market had significant challenges due to the uncertain situation of the Pandemic, the shifts in the global economy, the rise in inflation rates, the new technology trends, and the new rules in the game of trading.

Surviving in the market is not an easy task. Every day, an online trader looks at a screen, calculates the numbers, watches trends, and decides what to do. That‘s the nature of this game. Therefore, online traders need to be progressive and fast-movers with their decisions. That’s the most important lesson to learn after a year full of events and major shifts in financial assets and instruments.

Trading is Getting More Popular: The Rise of Gen-Z in Trading 

As a result of the global health crisis and its continuing variants have led to the growth of self-employment and flexible working practices around the world. There is no doubt that the technology has enabled Generation Z and young professionals (18-24) to pursue other sources of income, such as crypto trading, forex trading, and stock investments. The young generation is increasingly joining the investment world at a relatively younger age than it used to be.

The younger generation is looking forward to gaining financial freedom. Now, technology and trading apps allow anyone to start with only a minimal amount of money. In addition, apps are providing a huge shift in trading experience with easy-to-use platforms. The simplifications enabled the young generation to trade without the need for experience. Although there is a risk involved, everyone wants to learn more about the markets.

Advanced Technology: Trading Apps Are for Everyone

This year we witnessed the hype of Meme stocks, crypto trading, and investment apps with the rising numbers of individual investors. The entrepreneurs are stepping in and reshaping the financial world. We have seen how Robinhood has quickly shown us that everyone can trade now.

Forex VS Crypto War in 2021:  Who is the Winner？ 

Interest in various trading forms is constantly growing. Crypto trading has gained notable popularity, with more investors switching to the crypto market every day. The crypto market cap reached $3 trillion in November 2021, with an average daily trading volume of $124 billion. This rapid increase makes the crypto market the main rival to the forex market, which enjoys a daily trading volume of more than $6 trillion. 

The diversity of cryptocurrencies entices traders to join the crypto market. Reportedly there are more than 14,000 cryptocurrencies available for trading. 

Cryptocurrency Boom and Forex Challenges 

Cryptocurrency prices and trade volumes are nowhere near those of forex trading. However, if there is going to be a market that can challenge forex trading, it will ultimately be cryptocurrency markets. The volume of cryptocurrency transactions currently stands in the tens of billions and is well behind the forex markets; however, it has increased significantly over the past few years and will probably continue on its upward trajectory. Despite the fact that it will take years for cryptocurrency markets to reach the same level, there is a possibility that in the future forex markets will be challenged by cryptocurrencies. 

Yes, The Forex is still the KING 

The forex market will always be here and yes it is still the leading investment destination ever existed. Even if there are no traditional currencies left around, there will still be some form of currency exchange for trading and investment purposes. It is never possible to have one single currency throughout the globe. Therefore, there will always be demand for currency exchange whatever the setting may be. Thus, the foreign exchange market will always exist, which means that there will always be an opportunity to trade currencies one way or another. 

FX Market Dominates Worldwide Financial Investments  

So, can the crypto market steal the light from the forex market？ Yes, however, the forex market will always have its unique features. Meanwhile, trading cryptocurrencies is a riskier investment than forex trading, but it depends on what youre trading and how you are trading it.

Despite the fierce competition from emerging investment destinations, the forex market kept its rank as the worlds largest financial market, with average daily trading volumes of $6.6 trillion. The global market cap of the foreign exchange market is $2.09 quadrillion. This is why there is so much liquidity in the forex market.

Cryptocurrencies: The Future of Investments？

Cryptocurrencies emerged as a leading investment destination in the past couple of years. However, the crypto market is still controversial even after a long way with regards to both technological advancement and increasing popularity.  

The split among investors is still there. While some praise cryptocurrencies as the future money or the next internet. Others are skeptical and believe cryptocurrencies are fraud. We can see that for every person claiming that cryptocurrencies are investment bubbles, theres another person insisting that they represent the next generation of finance. 

But none of these actually stops the crypto market from further growing. The cryptocurrency market cap topped $3 trillion for the first time in November 2021. It is important to understand that analysis of the Cryptocurrency Market is not a straightforward process as the typical analysis used to evaluate financial markets or forex. Cryptocurrency trading is a largely speculative field and the effect of supply and demand is very unpredictable. 

NFTs: A Different Crypto Approach  

Non-fungible tokens, or NFTs, are the latest trend in the crypto community, taking the world‘s digital collectibles by storm. NFTs captured the world’s attention as they came to reshape the future of digital work. But are NFTs worth all this hype？ Similar to cryptocurrencies, some experts see NFTs as a bubble that will pop sooner or later. While others believe they are here to stay and change investing forever.  

NFTs were created to identify things in a unique way and can be perfectly used on platforms of collectible items. Unlike cryptocurrencies, non-fungible tokens lack the interchangeability feature. Each token is unique and irreplaceable, no two NFT tokens are the same. NFTs are one-of-a-kind assets that represent digital proof of ownership securely recorded on a blockchain.

Central Banks Out of the Woods  

This year witnessed the recovery of the global economy and financial markets from serious damages caused by the Covid-19 outbreak last year. Economies reopened, vaccination rates are accelerating and outlook has improved.  

As the global economy gets back on track, currencies are betting on the central banks policy paths for the next year. Major central banks, led by the Fed, are heading towards reducing monetary stimulus.  

Policy divergence had a significant impact on the movements of major currencies this year. The USD recorded consequent gains against rivals as the Fed is now expected to hike rates three times in 2022. Meanwhile, currencies like the EUR are still struggling as expansionary policies will be here for a while. 

Choose A Reliable Trading Platform

To join the world of online trading it is important to choose a trading solution that offers reliable trading conditions and secure accounts. AximTrade is a multi-asset brokerage service with advanced MT4 technology and a CopyTrade solution. The trading platform provides the lowest spread and zero commission for investors on most financial instruments. The company also offers several account types and investment capitals tailored to fit your needs.