CFDs get traded OTC as they are not centralized. It is a contract between a Brokerage Company and the trader. Traders can benefit from the price movements of instruments without any need to buy or hold them physically. Traders speculate and earn from differences between entry and exit price levels without any concerns of how to buy and securely store the underlying asset.
What is crypto CFD?
Cryptocurrency is a digital currency, which does not exist physically like coins and notes. It is self-regulated using blockchain technology. Bitcoin is increasing in credibility and value, since its inception in 2009. Over the year’s cryptocurrencies are getting embraced. BitCoin trading is risky as the cryptocurrency is highly volatile. There are other cryptocurrencies like Litcoin, Ethereum, Bitcoin Cash, Ripple, etc.
Major cryptocurrency pairs
Reasons to trade Bitcoin using CFDs
Blockchain technology has made it possible for cryptocurrencies to exist. Currently, cryptos have been accepted by different sectors as a payment system. It is because the value of Bitcoin has revealed a huge leap. Even brokerage platforms started accepting cryptocurrencies for trading activities.
However, to buy Forex using BTC there is a need to invest in bitcoins itself. Digital currency can be bought at crypto exchanges. As crypto exchanges are not regulated, there are concerns about getting hacked or scammed.
To sidestep these worries, you can trade BTC through CFDs. The process is quick, which is helpful in this volatile market. ADSS has an MT4 platform that allows the trader to automate their transaction. Besides, the platform is regulated by the FCA or Financial Conduct Authority. It means you can trade bitcoin just like normal Forex trading.
Traders can choose ADSS because they can practice strategies with a Free BTC demo account. Your capital is not at risk because using a demo account means you play with virtual money in the live market condition.
How to trade BTC CFDs?
Bitcoin is extremely established as it is the eldest and mature. It generates a lot of headlines, so keeping track of its price against the dollar is easy. Sign up and open a trading platform. Start speculating the price of BTC and choose to buy [go long] or sell [go short], accordingly.
You will need to consider the leverage, affordable amount to invest, and other parameters [stop-loss & take-profit]. If your speculation is correct, the broker will pay for this CFD trade. In case you are wrong, the broker will charge you the difference.
Below are some CFD trading tips that can help you.
- Use stop-loss order for reducing the risk.
- Practice on demo account before putting real money at risk.
- Learn the basics of Forex CFD and its associated risks.
- Use leverage [as little as possible] that suits your risk tolerance profile.
- If low leverage is not allowed lower trade position.
- Develop a trading plan before entering.
- Never pursue lost trades, but stick to your strategy. Emotions can ruin your account.
- Keep sufficient equity aside, for rainy days.
- Diversification of your portfolio is a wise thing.
With a reliable CFD broker like ADSS, it can make a difference. Trading fees can consume a lot of your funds, so check it out. Safety is also the other aspect to consider. However, ADSS has been in the Fx trading niche for several years and has collected good credibility, give it a try!