A good broker alone will not make you successful, of course! Therefore, the platformStsRoyal also look at the basics of crypto-trading and look at appropriate strategies to work with. But always be aware that success in trading usually does not change from one day to the next and, like everything else, requires some practice. At some point, however, you have to start and there the practice is still suitable as the best teacher.
The basics of Bitcoin & crypto-trading
The trading of cryptocurrencies is done with CFDs. The full form of “CFD” is “Contracts for Difference” and happens to be anordinary financial instrument in the financial world, with the help of which various assets can be traded. It is therefore not limited to cryptocurrencies, but is also available for example for commodities or stocks.
You can think of CFDs as small contracts that are concluded between you and your broker. This small contract sets out the underlying asset (in this case crypto currencies), the leverage, whether it is a buy or sell, but also how long the position remains open.
Trading bitcoins& crypto currencies makes sense if you want to trade leverage and open short positions. Before we go deeper into the topic, let’s take a look at the advantages and disadvantages of crypto-trading.
What are the benefits of crypto-CFDs?
Here are some of the opportunities in Bitcoin trading & other cryptocurrencies.
The lever – margin trading
The so-called lever (“Leverage”) is probably the most popular feature of CFDs. A lever allows you to move a multiple of that on the crypto market when you have deposited. Sometimes one speaks here of “leveraged capital”. The lever size is given in the following format: 1:30 – This would mean, for example, that you move thirty times your invested amount in the market. Since a margin (“margin”) must be deposited, the whole thing is often referred to as “margin trading”.
Small capital investment (margin)
Since crypto-CFDs are a leveraged product, your broker requires a security deposit for each crypto trade. This protection is 1 part of the size of the lever used. If the lever is 1:30, you only have to deposit one-thirtieth of the amount you want to move on the market.
Long & Short positions
It can be attributed to both a rise in price and a fall in the price of Bitcoin and other cryptocurrencies. Thus, profits are possible, even if the entire market moves down. Advanced traders also use this option to hedge and reduce losses
Higher chances of winning
With CFDs, Bitcoin &Krypto trading at the same time can achieve higher returns than would be possible in the true crypto market. Responsible is the already mentioned in the first point lever.