How to trade cryptocurrencies with CFDs?

CFD offer a wide range of assets such as stocks, indices, commodities, but also CRYPTOCURRENCIES.

CFDs will give you access to cryptocurrency trading very easily.

What are CFDs?

CFD stands for Contract for Difference or Contract for the difference.

A CFD is a derived product. It allows you trade an asset (the underlying) without owning it thanks to CFDs (the derivative product).

When you trade CFDs, you will try to make ascending earnings (long) you diminishing profits (short courses without necessarily having the coins underlying.

If your predictions are correct and the market moves in the direction you predicted, your broker compensate you for the difference between the closing and opening of your CFD trade. this is called a gain. This is added to your account balance.

Conversely, if your prediction turns out to be wrong, it indicates that the market has not moved in the direction you expected. Your position (in the opposite direction of the trade) will be a loser. In this scenario, your broker will charge you the difference between the initial price and the closing price of the CFD transaction. This amount is deducted from your account balance.

CFD Warnings

CFDs allow trading, this often uses a strong lever and requires significant knowledge and availability. so you can quickly lose your capital even with proper portfolio management.

Leverage can also stimulate active movement to which it applies. increase the return on your investment. However, this means that if the market turns against you, your losses are exacerbated.

Therefore, you should pay attention to don’t invest too much money in relation to its capital and financial capabilities.

Furthermore, cryptocurrencies are assets with high volatility. So you have to be very careful.

trader les cryptos

Now that you know the principles of CFDs and the associated risks, let’s move on to cryptocurrency trading.

A great selection of cryptos

CFDs provide access to a great selection of assets. When it comes to cryptocurrencies, you will need a wallet to own them, but that’s not necessarily what you’re looking to do when trading!

The goal is not to own a cryptocurrency but to take advantage of a downward or upward movement to make a profit.

Trade popular cryptocurrencies

With CFDs you will have access to many cryptocurrencies and especially the best known ones such as Bitcoin (BTC), Ethereum (ETH), Dogecoin,…

The advantage of these values ​​is that they have a dating history, so you can use the chart to trade. The other advantage is that they have a large capital and significant liquidity in the market.

However, these values ​​can to collapse in the short term (even in the medium/long term). Therefore it must be Very careful in managing your assets.

Speculative cryptocurrency trading

There are many small cryptos. These represent strong upside potential but also a big downside risk. The lack of volume and a distribution of capital that is not necessarily fair cause a sharp drop in case of sales (even with modest volumes).

Attention trader of little-known assets and/or with very low capital (not yours but that of the issuer of the asset) it is very risky. So you have to be careful to commitment compared to the size of your portfolio and calculate in advance the maximum loss what you can do if your trade went wrong. This loss must be acceptable from a financial point of view but also from a personal point of view.

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