Do you have an interest in the cryptocurrency market? Do you want to start trading? Are you unsure of what cryptocurrency trading entails? Do you know how the market works? If your questions are similar to this, then we will break it down for you to get started with your trading career.
To start trading in any capacity, you must understand that trading cryptocurrency comes with a great risk where you can lose your capital. Bitcoin investment can be very volatile similar to other cryptocurrencies in the market.
Before journeying the route of trading cryptocurrency, you must carry out research and be convinced about the investment you are going to make. You need to be ready for the possibility of losing your capital because the market is unpredictable.
What you need to get started
To begin your crypto trading, you need the following:
- Cryptocurrency wallet – hardware, software, mobile or paper wallet
- Access to an exchange, which allows crypto trading, buying and selling
Cryptocurrency Market – What you need to know
- The cryptocurrency market is a 24-hour market.
- The stock exchange is different from a cryptocurrency exchange.
- The market is highly volatile.
- Trading cryptocurrency stock is preferable for all types of traders.
What are Contracts for Difference (CFDs)
CFDs are assets that you don’t own physically but trade; Traders speculate on the price of these assets. That means as price moves up or down in value, you can take advantage of these movements. That is how traders take advantage of the price fluctuation in the market.
What CFDs to Trade
You can trade CFDs on the global market including commodities, indices, currencies etc. Trading CFDs gives you the freedom and access to different assets in the market. They are leverage product, which means you trade them on margin. You can trade the following CDFs with 101Investing.
- Indices such as Japan225, Germany30, UK100, and US500
- Forex currency pairs such as GBPUSD, USDJPY, EURUSD, and a different range of exotic and minor currencies
- Commodities and energy such as natural gas, silver, gold, oil, and coffee
Cryptocurrency Trading – Choosing the right Platform
The cryptocurrency market is one of the biggest financial markets to trade; however, the platform or exchange you use in trading is also important. Choosing the right platform to trade isn’t something to take lightly as it will affect everything you do in the cryptocurrency market. Therefore, conducting proper research is essential to building your career in trading.
To guide traders when it comes to trading digital currencies, you need the best platform. Most new traders find it hard to identify important things to consider before using a trading platform.
Here are a few things to deliberate on before choosing a trading platform in the cryptocurrency market.
- Minimum Investment – You do want to research on the minimum deposit you can invest as a trader. Furthermore, what platforms do they allow traders to use in funding their account? Importantly, don’t make the blunder of thinking that because a particular platform has a minimum deposit of $1000 will make such a platform genuine. However, you have to find a platform that suits your budget even if it means depositing $100 to test the platform.
- Available Digital currencies – Presently, bitcoin to USD is one of the most popular currency most platform use. Nevertheless, you can find other trading pairs in other platforms. Ensure to check that the digital currencies you want to trade are available in such a platform before registering.
- Leverage – Leverage is an important concept in trading where a broker allows you to trade with a small account while opening positions bigger than your account. However, higher leverage comes with higher risk. Nevertheless, when it comes to bitcoin investment, you may look for a platform that offers 20:1.
- 24-hour customer support – An important aspect of a good platform is the customer support system. You want to know how responsive their support system is and how fast they react when issues arise. Furthermore, what avenue is available for customers to report issues? Importantly, look for platforms with email, online chat, and call system.
- Instant Liquidity – You want to check if they have instant liquidity. The longer you wait for your order to fill, the higher the risk the value will drop because of the market volatility.
Advantages of Trading Cryptocurrency
Trading cryptocurrency comes with potential benefits, which is the first trigger point for a beginner. Security and control – The security and control that comes with cryptocurrency trading is one that many people consider. Unlike fiat currency, cryptocurrency is safe and encrypted to make the users money secured.
Low fees – Another interesting benefit of cryptocurrency trade is the low fee that comes with it. Usually, the fee depends on the platform you use because some platform doesn’t take little or no payment.
Portfolio diversification and hedging – If you have issues with the value of traditional currencies and central bank quantitative easing, bitcoin investment offers a simple way to hedge and spread your risk. However, it needs to be done carefully or it could be very risky and may lead to losing.
Disadvantages of Trading Cryptocurrency
Despite the potentials in the cryptocurrency market, there is also a drawback to trading. Remember, trading cryptocurrency is a risky venture where you can lose your capital.
High volatility – In volatility is a good thing since the upward and downward movement of price offers traders different opportunities. Nevertheless, for traders, too much volatility creates a high level of uncertainty in the market. Therefore, finding good entry and exit points can be difficult.
- Conflict with central banks – Cryptocurrency, unlike other traditional currencies is not centralized. It is not regulated by any authority, which makes it difficult to conduct monetary policy.
- Conflict in the financial world – Trading cryptocurrency offers a different path from our traditional banking system. The uniqueness of theis that the blockchain bypasses the traditional banking system.
How to Trade CFDs In Cryptocurrency on 101Investing
You already know what to look for in a reputable trading platform; the next step is putting that information to work. 101Investing is a transparent platform where you can start your cryptocurrency trading in CFDs; the platform has every information you need to help you navigate through the cryptocurrency market.
However, to start trading with us, here are a few steps to make the process easy for you.
- Click on the account opening or sign up link to create your account.
- Complete the form by inputting your first name, last name, password, email and other necessary information.
- Upload Coloured copy of ID, driving license, bank statement and other necessary documentation to complete the KYC process with further information on the website.
- Choose the deposit option of your choice and fund your account with minimum, which is 250 EUR or available currency equivalent.
Trading Bitcoin CFDs with 101Investing
Once you have completed the registration process along with the necessary documentation, the next start is to start trading your favorite cryptocurrency in CFDs. You can follow these simple steps if you want to know how to trade bitcoin with us.
- Select the cryptocurrency you want to trade
- Decide to go long or short.
- Set your stop loss and stop limits
- Open and monitor your trades.
Why trade with Investing101?
- No hidden charges – We offer no commissions along with zero bank fees on each transaction.
- Uncompromised safety – The safety of your account when using our various platform is a top-notch priority.
- Free educational materials – We ensure you are equipped with the latest information about the cryptocurrency market. Trading is a skill, and you need the right information to perfect that skill.
- Active customer service – Do you have an issue when trading with us, our reputable customer representatives are available to help you out.
Frequently Asked Question
Is there any difference between forex trading and CFD?
Forex trading is purely different from CFDs since it is mostly based on the forex market. However, CFD trading comprises of different contracts, which include commodity, index, and share CFDs.
How safe is it trading cryptocurrency?
Crypto trading is very risky because of the level of volatility in the market. Nevertheless, when you open an account with 101Investing, you get the access to all the information needed to start trading.
Conclusion
The cryptocurrency market is a unique market that carries many benefits and risk. The market is a 24-hour market with a lot of potentials for traders that understand the market. Despite this, trading with the right platform is very crucial to your success.
In this article, you have learnt how to choose the best platform for you when you want to trade cryptocurrency. Furthermore, trading is not a one-way journey; there is also the potential of losing your capital since the market is very volatile. For beginners, it can be hard starting your trading journey.
However, 101Investing has all the materials and tools to ensure you get all information needed, to help you get the best out of your trading. You can trade CFDs with us and take advantage of price fluctuations in either direction. Importantly, we offer various financial assets that you can trade with CFDs without physically owning the asset.
