Lesson 12. Forex vs Crypto in Algotrading — Differences & Nuances
24/5 vs 24/7, volatility and liquidity, swaps vs funding, MT5 access paths (CFDs/bridges), overnight gaps vs continuous markets, costs and execution realities. Pick the market that fits your EA and infrastructure.
12.1. Trading hours: 24/5 vs 24/7 (why it matters)
Hours:
24/5 (Sunday evening → Friday evening)
Sessions:
Sydney → Tokyo → London → New York
Rollover:
Rollover around broker midnight; spreads often widen
Weekend Risk:
Weekend risk: positions exposed to Monday open gaps
Hours:
24/7 (no closing bell)
Notes:
No weekend gap, but liquidity varies by hour/venue; maintenance windows can occur
Funding:
Funding intervals for perps (e.g., every 8h)
Takeaway:
EAs must align time filters: Forex blackout at rollover/weekend; Crypto consider venue-specific low-liquidity periods.
12.2. Volatility & liquidity: how 'bumpy' and how 'deep'
Moderate volatility, deep liquidity; tighter spreads most of the day
BTC/ETH: higher volatility; liquidity concentrated on top exchanges and varies intraday; alts much thinner
Scalpers:
Require tight spreads/low latency; in Crypto only on top books and off-news hours
Swing Traders:
Forex forgiving; Crypto requires wider SL/TP and filters for extreme moves
| Metric | EUR/USD | BTC |
|---|---|---|
| Daily range (typical) | 0.5–1.0% | 2–6% |
| Spread (calm hours) | 0.5–1.5 pips | 0.01–0.1% of price (venue-dependent) |
| Slippage risk at spikes | Medium | High |
12.3. Holding costs: swaps vs funding (and how to plan)
Definition:
Overnight financing (positive/negative), triple-swap day midweek
How to find:
Varies by symbol/broker; shown in MT5 Symbol Specification
Definition:
Periodic payments (e.g., every 8 hours) between longs and shorts
Notes:
Funding rates vary; exchange-specific
- •Short-term EAs: costs small fraction of PnL if exits intraday; still consider
- •Swing EAs: model swaps/funding in backtests (MT5 swaps configurable; funding often modeled externally or via broker CFD)
- •Naming: On CFDs, brokers may embed financing as 'swap/overnight fee' — check exact terms
12.4. Access paths on MT5: CFDs and bridges vs exchange APIs
Native; Strategy Tester works with symbol history; simple EA deployment; regulation varies by broker
Easier deployment; financing via swap/fees; watch wider spreads, execution during volatility
Full 24/7 exchange access; requires external bots/servers; testing/data/ops complexity higher; MT5 tester not native for exchange data
Takeaway:
For beginners, MT5 + Forex/CFDs are simpler; Crypto APIs are powerful for later, with extra dev/ops overhead.
12.5. Gaps vs continuous: EA behavior in different regimes
Gaps:
Weekend gaps; overnight gaps (on news)
Risks:
Gaps can skip SL/TP; need gap-aware risk and reduced exposure into weekends; avoid opening near close
Continuous:
Continuous trading reduces gap risk
Risks:
Introduces sudden micro-structure changes, liquidation cascades, and exchange incidents (halts, throttling)
- Forex: Friday close long → Monday open gap down → SL filled worse than planned (gap-through)
- Crypto: Weekend liquidity thin → sudden wick; slippage spikes even without gaps
Actionable Filters:
Forex: Friday risk-off rules; weekend flat policy; rollover blackout
Crypto: Volatility thresholds; venue-specific caps; throttle trading during extreme rates
12.6. Costs & execution matrix: apples-to-apples view
| Aspect | Forex (MT5 broker) | Crypto (MT5 CFD) | Crypto (Exchange API) |
|---|---|---|---|
| Costs | Spread/commission/swap | Spread/swap/fees | Maker/taker/funding |
| Latency | VPS near broker | VPS near broker | Colocation/low-latency API |
| Slippage | Medium at news/rollover | High variability on spikes | Venue-specific |
| Data/testing | MT5 Strategy Tester native | MT5 Strategy Tester native | External data/tools |
| Uptime | 24/5 | 24/7 | 24/7 ops demands |
Scalpers need best-in-class infra and costs on either market; swing EAs tolerate more.
12.7. Practice: choose your deployment market & guardrails (10–15 min)
Lesson 12 Quiz
Test your understanding with 3 questions. Pass with 2/3 correct.