Virtual currencies, having successfully conquered the field of OTC (over of the Counter) transactions and investments, started to make their way into the industry of online trading. More and more brokerage companies have started to offer Bitcoin and a variety of other major altcoins as a traded assets on their forex platforms. On the world wide web, taders, in their turn, increasingly started to search for information about online forex brokers which have made available trading cryptocurrencies in crosses with fiat currencies and in purely cryptocurerncy pairs, such as Bitcoin / Ethereum or Bitcoin / Litecoin.
With the advent of such a new financial digital asset, like cryptocurrency, forex has reached a new dimension in a historical context. The account in Bitcoins and other cryptocurrencies, such as Litecoin, Ethereum and a number of other major altcoins, on Forex has become a new reality for a range of forex brokerage companies and the BTC/USD cryptocurrency pair became available to their clients - forex traders. If you are planning to speculate on Bitcoin in Forex, you need to understand that this fiancial asset is the largest tradable and highly liquid cryptocurrency pair in the contemporary forex market. Besides, bitcoin and altcoins trading is carried out 24 hours a day and seven days a week throughout the world.
Firstly, a crypto trader needs to follow the hottest news in the industry on the air, because the main cryptocurrency and other altcoins on Forex are significantly impacted by the news, positive or negative. News, as a rule, has a more significant effect than, for instance, macroeconomic reports on traditional, or fiat, currencies. It must be clearly understood that cryptocurrency is not the easiest financial asset for forex trading. It proved to be more profitable if bought as part of long term “hold” strategy, if you are patient enough to wait for the end of another correction to start buying it. Any trend forex strategies can be used for trading cryptocurencies.
For instance, if some major financial fund invested massively in Bitcoins, then we would enjoy the excellent bull cryptomarket. Or another example, if some major cryptocurrency exchange was hacked, it would surely be reasonable to start sales.
Bitcoin and other cryptocurrency pairs can be traded on Forex with the usage of the Moving Average indicator. Due to the relatively high spread of this financial asset, it is not sensible to apply scalping strategies, it is preferrable to trade only on longer timeframes. A trader can buy Bitcoin or other altcoins at Forex at any moment, as long as this tradeable asset does not depend on the Forex trading sessions, like American one, or Asian. You have also to clearly understand that Bitcoin is comparatively free from obvious speculation, so a crypto trader may not fear much the maneuvers of market makers.
What else should a cryptocurrency trader know to trade profitable at Forex? You should apply the basic technical analysis methods, do not ignore the news concerning the crypto industry and take into consideration increasing spreads on some data going out. Also, it should be understood that neither Bitcoin nor major altcoins have a strict correlation with other traditional financial assets.
Equally important is the choice of a suitable forex broker for trading cryptocurrencies. Which broker is better for trading bitcoin? In our ranking, two dozen of the best bitcoin brokers are presented, each of which offer their own unique conditions and advantages.
10 tips when picking a Bitcoin forex broker
1. Go for easy registration and start of trading. Choose a broker through which you can immediately buy Bitcoin and other cryptocurrencies on the stock exchange right after you open an account. After all, there are brokers, when trading with which you must first create a separate cryptocurrency wallet, which implies additional hassle especially for novice traders
2. Check if a bonus on the initial deposit replenishment, as well as on the subsequent replenishment is present. Some brokers offer a bonus of 100% of the deposit amount, some less. But whatever a broker offers, always carefully study the conditions on which this bonus is provided. After all, the conditions may imply a bonus adjustment in such a trading volume that is simply unrealistic.
3. Choose the trading platform with vigilance. Many modern forex trading platforms involve trading in cryptocurrency pairs. But the functionality, ease of use, convenience and clarity of different platforms are different, so find out if the broker has a trading platform that is convenient for you. Also note that there is a version of the trading terminal for use in the browser, as well as for mobile devices. In addition, the trading terminal must demonstrate a clear Bitcoin exchange rate and quotes for the main cryptocurrencies online. On the charts of a Bitcoin / US dollar pair, it is possible to use standard indicators, such as moving averages, oscillators, horizontal levels and a number of others.
4. It’s a benefit, if a broker gives an opportunity not only to trade Bitcoin, but also to use a ready-made financial portfolio for cryptocurrency. A cryptocurrency portfolio is a kind of synthesis of the most popular cryptocurrencies. As a rule, it includes Bitcoin, Litecoin and Ethereum - the most promising cryptocurrencies in the world. For example, if you look at the content of a portfolio, the proportions look like this: Bitcoin - 43%, Ethereum - 32%, Lightcoin - 25%. This means that one lot of the portfolio is equal to 2 contracts for Bitcoin, 100 contracts for Litecoin and 20 contracts for ethereum.
5. Evaluate he amount of the minimum deposit. Some crypto brokers may offer a minimum deposit for trading cryptocurrencies starting from as low as $10. But keep in mind that there’s no point in messing with so low deposit, the deposit for cryptocurrency trading must be at least one hundred dollars.
6. Consider the size of the leverage. Most bitcoin forex brokers offer leverage for trading cryptocurrency 1:10, which means you can make money on the trade, even with a small amount of money. A leverage of 1:10 may seem too low compared to traditional currency pairs, for which the standard leverage is 1:50. Some brokers offer higher leverage. But do not forget that Bitcoin and other cryptocurrencies are much more volatile than fiat currencies, so too high leverage can lead to a very quick loss of the entire deposit when the market turns against you.
7. Don’t be too impressed by a big choice of cryptocurrency pairs. The list of cryptocurrencies offered by a Bitcoin forex broker should be at least the top 5 cryptocurrencies in terms of market capitalization, this is already enough. The TOP10 cryptocurrency is already overkill, and there is no sense to spray on everything outside of the TOP10, because a broker may offer several dozen cryptocurrencies that are not liquid and do not generate any significant trading volume. Also, pay attention to whether the broker offers purely cryptocurrency pairs, such as Bitcoin / Ethereum, Bitcoin / Litecoin, and not just mixed Fiat / Crypto pairs - this expands the trading potential.
8. Compare the amount of commission for replenishing a trading account and withdrawing profits of several brokers. As well as a list of available payment systems for deposit replenishment and withdrawal of profits!
9. Remember – the presence of the regulator is a must. It is better not to get involved with a bitcoin forex broker who does not have a license from one of the largest international or European regulators, such as CySec, FCA and others.
10. Carefully read the reviews of Bitcoin forex brokers before opening a real account with one of them. Studying reviews of other traders will help you avoid major mistakes when choosing a broker. After all, a broker may have many hidden pitfalls, starting with opaque trading conditions by which a broker plays against his client, to outright fraud, when a broker appropriates a client’s deposit after some time of creating the illusion of trading without withdrawing transactions outside of their trading servers.
Author: Kate Solano, Forex-Ratings.com