Cryptocoins and Penny Stocks: Similarities and Differences

Cryptocoins and Penny Stocks: Similarities and Differences

It seems like new forms of cryptocurrency are coming out everyday. Some quickly fizzle while others gain in value and earn a place on the top of the charts.

It’s easy to see that there are similarities to penny stocks because most cryptocoins are wildly inexpensive. And of course you want to buy low and sell high, but what other similarities and differences are there?

Low Cost of Entry

The low cost of penny stocks is blown away by the extremely low cost of cryptocoins. Sometimes these trade at a small fraction of a penny, allowing you to buy a ton of coin for not a lot of cash. However, since most cryptocoins don’t find any traction it doesn’t really matter if you own a million shares, it’s still not worth much if the stock never takes off.

Established Trading Platforms Exist

At this point it’s pretty easy to start trading penny stocks or start trading cryptocoins. You simply pony up the dough and you’re off. In that respect, the two are pretty similar because neither require a lot of hoops to jump through in order to start making trades with real money.

Stocks Have Been Around Much Longer

One thing that penny stocks have going for them that cryptocoins don’t is that they’ve been around much longer. People are familiar with what stocks are and how they work, but cryptocoins are still largely a mystery to most. This means that much has been written on stock trading and strategy, but finding a successful cryptocoin trading strategy will be tricky because there are few experts that exist.

The Future of Cryptocoins Is Highly Uncertain

Twenty years from now there will likely still be penny stocks because there will always be new businesses getting their start. But the same cannot be said for the vast majority of cryptocoins that exist today. There will probably be one or two main cryptocoins, like Bitcoin and one other big competitor, but who’s to say there will always be start-up coins around?

Both Are Fun to Trade

It’s a lot of fun to trade penny stocks and cryptocoins because of how much action they get in a short period of time. You can buy a cryptocoin and in just a few hours it can make a considerable jump with plenty of buyers ready for you to sell to, and the same can be said for penny stocks.

Both Offer Fast Profits and Losses

Because of the speed involved in both cryptocoins and penny stocks they can provide quick profits and you can lose your starting balance faster than you might be used to. It’s something to be aware of when starting out, and one more reason why you should never bet the farm, only using money that is earmarked for high-risk trades.

No Heavy Regulations

It’s still very much like the Wild Wild West in the world of cryptocurrency and therefore you have to watch out for scams and unscrupulous trading platforms. There’s almost no regulation with cryptocoins so you need to trade at your own risk.

Since penny stocks have been around longer there’s more regulation involved (although scams still exist) and you can trust a well-established brokerage will still be around six months from now.

What is online trading and how does it Work?

What is online trading and how does it Work?

Online trading refers to the process of purchasing or offering financial items via an internet driven platform. In most cases, the platforms are provided by web-based representatives, and they are usually accessible to every individual who wishes to make a profit from the market. The online trading platforms such as CMC Markets offer an assortment of different items for trading including shares, indices, commodities, and Forex. Among these services, Forex has been the most recognised form of online trading over the past few years. The invention of the Internet and the affordability of high-speed Internet enabled mobile phones have made online trading something that anyone can try from the comfort of their homes. No need to rush to the bank or walk on the streets trying to convince people to buy your products.

Simple and Convenient

From the comfort of your home, you can trade in Forex which incorporates coinage such as a Dollar for a Euro or an assortment of other commodities such as gold and silver, and to some extent, it also provides some real market files.

It isn’t for the Experts Only

Online trading is not reserved for experts only. Anyone with the knowledge of how to use the internet can venture into it. You simply open a trade by selecting a suitable item, sum and heading and you are free to close it whenever you want to. Many platforms also support the concept of trading twofold choices whereby you simply pick the item you wish to trade in and make a selection of whether you think the item cost will go up or down with time. Online trading in double alternatives represent the basic form of online trading, and on any particular choice you make, chances of you arriving at the correct verdict are as high as 80%.

Learn First then Invest

Online trading involves trading distinctive monetary standards and stocks while making a profit from them. To start off, you need to join an online trading class. Upon joining such a class, you should gain access to numerous volumes of free resources such as eBooks and videos to prepare you for online trading. Some online courses will offer you with a free demo account that you can use to test your abilities without losing any money.

Parts of an Online Trading Account

An online trading account has three segments namely:

  • Bank Account: This is the real investment account which is linked to your online trading account. If you are purchasing anything online, then the cash is deducted from your bank account
  • Demat Account: The purpose of a Demat accountis to mirror the adjust of the various trade items that you hold electronically.
  • Trading Account: This is the platform where you trade. You utilize the account for trading in the essential and auxiliary market.

Basic Instructions to Trading Online 

  • To start online trading, you must open a trading account with one of the broking firms. The online trading account should be accompanied by the Demat account. While opening the online trading account, make sure that the broking firm is confirmed by the SEBI.
  • Consider rehearsing with an online stock simulator: The test systems offer you with an excellent approach to learning online trading. The mistakes you make won’t cost you since it is a test system thus you can learn without the fear of losing your money.
  • Learn all the essential stock market basics: To figure out how to trade effectively, learn everything about the stock exchange and its dynamics. You may learn through news and websites, taking up simple courses on investment or listening to podcasts. Once you understand the stock market, you can be sure to end up as a successful investor.

You are good to go

If you keenly follow everything in this article and work your way up, online trading will be a straightforward and productive undertaking for you. Efficient online trading is only achieved through practice and nothing else.