Should you trade currencies or indices?

The indices trend has been growing rapidly, with more traders giving it much attention lately. The truth is these are very different instrument to trade representing different kind of data. The four most popular indices are Nasdaq, US30, German 30 and S&P500. There is a variety of currencies found in the industry that vary per broker. The above-mentioned indices are surely more volatile than currencies depending on the pay-out offered by the broker. Indices usually pay 10x the currency pair on an average, with a 1:500 leverage. There is actually no words that can easily describe the conditions for both more than the experience can.

The skill level should really be on another level when you want to trade indices profitably and consistently. It makes sense to trade both of these instruments, more opportunities more money, right？ But it is very important to also check your psychology level of maintaining the pressure that will be brought by both of these instruments. It is recommended to trade less instruments so that you could be able to keep track of the conditions and momentum brought by all these instruments. The way of charting and analysing is overall not so different but you should also check the difference on your own, currencies normally have more data compared to indices.

In terms of the capital, it is recommended that if you have less than $999 you should probably stick to currencies, because the indices are so volatile in such a way that 100 pips could be more or less than 1000 pips on indices. That alone should bring a sense of what is happening in these both market conditions for these two instruments. The indices will soon wipe an account if you have small capital to even begin with, but with the right skill and good practice of risk management it is possible to grow your small capital.

If you do not know which one to trade between these instruments, you probably should stick to currencies. Trade currencies until you are more comfortable with your trading skillset and your psychology is maintained all the time. Indices pays more and that also means they are riskier. There are volatile currencies or exotic currencies, you may start to test your skill on them before even taking serious trades on indices. You cannot drive a supercar with a thousand horsepower to its full potential, if you have not driven a normal car to its full potential, the adrenaline rush will never be the same. It is more of the same with trading, you will experience more emotions when trading indices compared to currencies.

There are many factors that actually influence what you should trade and why you should trade them also. There is literally no need to switch the instruments you are trading do not let the pressure of other traders influence you. If you are doing good with currencies you can just increase your volume and continue with your smooth trading journey but if you would like switch or level up, you should consider your skill, psychology level, consistency with currencies first, your capital and most importantly never forget to check for good broker on WikiFX app that will tick all your boxes in order for your trading journey to be as smooth as you had visualised it.