7 Tips When You Start Trading with Cryptocurrency CFDs
Did you know that cryptocurrency trading can be done in two ways? You can either trade the crypto itself, or you can speculate on price differences without actually owning the digital coins. Here we explain how crypto CFDs work!
What are cryptocurrency CFDs?
CFD means Contract for Difference and is a type of trading. It can be done with for example forex, or in this case different cryptocurrencies such as Bitcoin. Since the interest in crypto has sky-rocketed over recent years, some popular platforms like FxPro have expanded into crypto CFD to meet the growing demand from traders. FxPro spreads and fees are competitive, especially with the generous amount of trading tools and resources that you get access to.
Speculate on fluctuations in prices
With cryptocurrency CFDs, you as a trader speculate on the price movements of crypto. This means you can make a profit without actually owning any digital coins. Traders don't need a wallet or any other crypto-related tools - all you need is an account with a trading platform that offers CFD in crypto trading, and that's it.
Picking the best broker for crypto CFD trading
Are you considering trading cryptocurrencies with CFDs? In order to pick the best broker and trading platform, you should look at some different aspects. You'll want to compare things like user interface, tools, and fees.
What are the benefits?
First off, perhaps the most obvious benefit of trading CFDs is that you don't need to keep hold of any crypto. You simply use your regular money to buy and sell contracts. You also won’t be tied down by the geographical restrictions on where cryptocurrencies can be traded, as cryptocurrency CFD brokers allow traders from all over the world. Furthermore, you can trade 24/7.
What are some disadvantages?
As with any speculative investment product, there is always some degree of risk involved when trading cryptocurrencies via CFDs. This doesn’t mean it can't be done safely! Check out the tips below in order to maximize your risk management. Knowledge is key, so do your research on both the market and the available brokers.
7 tips for trading cryptocurrency CFDs
- Make sure to read up on the topic. Stay updated with news and learn from the professionals.
- When you first start trading, use a demo account. This prevents you from losing any real money before you have learned the basics of crypto CFDs.
- Cryptocurrency has high volatility. Use stop-loss to limit your risks.
- Pick your platform carefully. Check out reviews of different platforms before deciding on which one you want to use. Decide on which aspects are important for you, like an easy-to-use interface or free withdrawals.
- Understand how your platform works. Check out the user interface and tools available. Take advantage of any free resources like tutorials and guides.
- Don't get caught by a bad surprise when it comes to fees. Look up what the costs are at the broker that you're interested in - before you start investing money.
Back to the list