Automated trading is possible in any market, including Forex, crypto, stocks, options, futures, and more. However, given Forex's appeal to a wide range of traders, automated trading is in the most significant demand here. The best expert advisors for Forex have proven their effectiveness, which is why their use has grown significantly in recent years. Still, the young yet rapidly developing crypto market has also quickly integrated automated trading.

If you're unsure which market is best suited for trading bots, study their key features. This will help you choose the option that requires less involvement and offers the highest returns from automated trading.

What is a Forex Robot (Expert Advisor) 

Forex robots are customizable software for automated trading of fiat currency pairs on the Forex market, primarily through MT4 and MT5. Forex robots or Expert Advisors (EAs) have basic settings that determine their algorithm. However, traders can easily customize them to suit their trading strategies, even without programming knowledge. 

Moreover, if you're well-versed in IT, you can even create your own trading robot. MT4 and MT5 trading platforms have a built-in programming language (MQL4 and MQL5, respectively), which allows you to develop and test your own trading bots. 

However, traders most often prefer to use proven Forex robots with basic and advanced settings, such as: 

  • Indicators, such as Moving Averages, Oscillators, etc.; 
  • Order management;
  • Trade entry/exit conditions;
  • Risk management (Stop Loss and Take Profit functions);
  • Spread control; 
  • Signal filtering, etc.

What is a Cryptocurrency Trading Bot? 

A cryptocurrency trading bot is specialized software for automated trading, but for a different asset class. It is only suitable for trading cryptocurrencies, which exist in the digital realm free from strict regulation by national governments or banking systems. 

Unlike Forex robots, their customization is not as easy and, therefore, requires specialized knowledge. Their functionality is more complex, so if you want more room for experimentation with a trading bot, you should start with Forex robots. But if trading crypto is your primary focus, you will be more dependent on automated software developers.

Core Differences: Market, Technology, and Risk

While Forex EAs and crypto trading bots have many similarities, trading with each will offer a completely different experience. This is due to the fundamental differences between fiat and cryptocurrencies, regulatory certainty/uncertainty, and the technologies that support their circulation.

Market

Cryptocurrency prices fluctuate much more than those of fiat currencies. Normal daily price movements for cryptocurrencies are around 20%, and during periods of turbulence, they can reach as high as 80%. Meanwhile, the typical daily fluctuations of popular currencies such as the USD or EUR are only 1-2%, and during significant crises, they can reach 4-7%.

This difference in volatility makes trading in the crypto market more risky and unpredictable. Therefore, completely refusing to monitor the performance of crypto trading bots can lead to significant losses. At the same time, the comparative stability of the fiat currency market allows traders to devote less attention to monitoring the performance of Forex bots.

Technology

Forex trading is more centralized because it relies on traditional banking infrastructure and its familiar operating rhythms. Meanwhile, the crypto market is accessible 24/7 since it uses decentralized blockchain technology. Trading in this market bypasses banks and brokers, which play a crucial role in the Forex financial infrastructure. At the same time, when trading in the crypto market, you will need centralized or decentralized exchanges (CEX/DEX), crypto wallets, P2P platforms, and other elements of the digital currency ecosystem.

Risks 

In addition to the high volatility of cryptocurrencies, trading in the crypto market carries other significant risks. Forex trading, for example, is much safer in comparison with cryptocurrency trading because of regulatory protection. Traders on Forex can rely on dispute resolution mechanisms, legal requirements for brokers, account insurance schemes, and other mechanisms to mitigate trading risks. In contrast, the crypto market's regulatory uncertainty makes this asset riskier for investors. 

Furthermore, the potential high profitability of cryptocurrencies and high returns from speculation make this market attractive to scammers. Even experienced investors can make mistakes and invest their money in scammy crypto projects.

Conclusion 

The choice between a Forex robot and a crypto trading bot depends on many factors: risk tolerance, the time you're willing to devote to trading, your interest in new technologies, etc. Thus, if you want to profit from significant price fluctuations, automated crypto trading is a better choice. However, it will require substantial involvement on your part, even when using crypto trading bots. 

If you prefer long-term trading strategies, Forex robots are a better choice. They can deliver excellent results even with minimal involvement. However, the profits won't be as enormous as those from successful crypto trading.

Therefore, make your choice based on your priorities and trading style. Automated trading technologies are sufficiently advanced for both markets. They will support your decision, no matter what choice you make.