Looking to Try a New Forex or Cryptocurrency Trading Strategy? Use This Instead
Maybe it’s the desire to keep getting better or simply jumpiness, but traders are always looking for that new magic bullet strategy. Whether you deal in forex or cryptocurrencies, trying new approaches is always on the to-do list. But it isn’t always possible to test a new trading strategy without typically losing substantial sums of hard-earned money.
This is exactly what prediction platforms want to change. Decentralized, blockchain based platforms give individuals fun ways to research and apply their insights to their predictions, test new strategies, and take part in fantasy trading competitions against fellow traders. On some platforms players create fictional portfolios, where the consequences of their trading decisions are decided based on real-time market data. On others, they simply join prediction platforms on any type of subject imaginable. On all platforms the winners walk away with cryptocurrency, ERC20 tokens that can then be traded on exchanges for reach cash.
Seems too good to be true? It’s not. They’re out there, and there are some huge benefits to exploring them. Namely…
Lower fees and no commissions
When it comes to trading forex, stocks or even cryptocurrencies, every trader knows that you always lose some money in the form of fees and commissions. It is simply the cost of doing business in the markets. What stings is when you’re still testing a trading strategy, the efficacy of which you’re still not sure about – and end up paying the fees over and over again.
Fantasy trading markets and prediction markets on the other hand – generally allow you to eliminate the fees that are involved in trading. With no brokers or intermediaries to arbitrate interactions with the platform, players simply remit a certain amount of their tokens to enter competitions and trade, experiment or predict almost endlessly, while top performers earn back tokens in the form of winnings.
This low, often no-fee structure allows the novice and the experienced trader alike to battle test their skills and hone their insights for the real markets.
A level playing field
When it comes to forex especially, the current trading scenario makes it very hard for the small guy to make money. The competition is just too stiff and the information gap too significant. For example, retail brokerages have the ability to collate pricing information from different banks and similar liquidity providers. Individual traders do not get the same access to better spreads and trading flow insights.
Fantasy trading platforms make the field more equitable by creating all competitions in peer-vs-peer format. This means that it is always individuals who end up competing against each other (as opposed to institutional traders), making it an apt environment in which to play and potentially earn – without the unfair advantages seen in other markets.
A trustless environment
Trust makes the forex trading world go round. Without trust, we wouldn’t be giving our money to brokers who then give our money to exchanges. It’s because we trust the system that we calculate profits from trading each month even before the amount has made it to our bank accounts.
But there’s also a downside to relying so much on trustworthy intermediaries. Sometimes, brokers are unable to pay on time. Or scenarios arise where brokers or intermediaries simply cannot repay funds.
In these scenarios a trustless environment is ideal. Fantasy trading and prediction platforms that are based on the blockchain rely instead on smart contracts. Smart contracts are coded to decide what transactions need to be executed when – and under what circumstances.
With this type of system competitors are always assured of receiving their payout – as it’s built directly into the blockchain. A competitor no longer has to rely on the trust of an intermediary, but can instead rely on the trust of the technology – whereby steadfast rules are established and applied, and the technology inherently provides payment security.