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Trading Bitcoin and Ethereum on Forex


The sharp rise in the price of Bitcoin has led many Forex traders to try to trade in Bitcoin and other altcoins. Indeed, if there is a financial asset that demonstrates a decent return, why not profit from it? We will explain the most important points you need to know in order to trade Bitcoin and other cryptocurrencies.

Cryptocurrency is a type of digital currency, in transactions with which security is ensured through the use of cryptography methods. Cryptocurrency has a characteristic feature - it is released and maintained decentralized, with the help of Internet users. Thus, a cryptocurrency differs from conventional electronic money in that it is simulated online and is in no way connected with any of the state monetary systems, i.e. does not depend on fiat money. Digital currencies are a relatively new phenomenon in the financial world. Since its inception, cryptocurrencies have begun to rapidly gain popularity and are currently among the most sought-after trading tools.

Some of the most popular cryptocurrencies for forex trading are Bitcoin, Bitcoin Cash, Dash, EOS, Ethereum, Ripple and Litecoin. But the two cryptocurrency pairs most often found in forex brokers’ arsenal are BTC / USD and ETH / USD. Altcoins call all cryptocurrencies that appeared after Bitcoin. At first they were only copies of the most famous cryptocurrency. Currently there are already several thousand of them, and their number is constantly growing. Please note that the presence of a particular cryptocurrency in the cryptocurrency exchange listings is not the main criterion for the attractiveness of this cryptocurrency as an investment tool. A more important indicator is the trading volume that this cryptocurrency generates on the exchange.

Usually during the day, prices for Bitcoin fluctuate between $ 5- $ 35 per coin, but there have been changes of more than 2000 points in one day. In 2013, the bitcoin rate increased by 5580%. To conclude a transaction on the trader's account must be at least 20% of the current market price of Bitcoin. For example, to conclude a deal to buy or sell at a price of $ 240 coins, a trader must have a minimum capital of $ 48.

Trading cryptocurrencies in the financial markets opens up unlimited opportunities for earnings: you can make profit both on growth and on lowering quotations. The cryptocurrency market has a number of distinctive features, such as round-the-clock work seven days a week, which allows you to carry out transactions at any convenient time. In addition, low liquidity often causes high volatility, which can lead to rapid emptying of a trading account.


The advantages of trading cryptocurrencies on forex:


Disadvantages of cryptocurrency trading

Many Forex brokers offer their clients cryptocurrency trading through the terminal. But as a rule, they have about 2-3 currency for trading. The most common trading terminal for trading cryptocurrencies is MetaTrader5, but some brokers offer their clients their own trading software.


Features of trading cryptocurrency pairs:

As a rule, most traders open a trading deposit in dollars. However, some forex brokers provide an opportunity to open a deposit in bitcoins. Trading a pair of BTC / USD is technically no different from trading conventional forex currency pairs. In the same way, deals for buying and selling are opened, stop loss and take profit orders are set. The key principles of technical analysis work in a pair of bitcoin / dollar, you can build trend lines, support / resistance levels, technical analysis figures and candlestick patterns. For trading Bitcoin on Forex, you can use the same technical indicators and trading advisors as for ordinary currency pairs.


When choosing a broker for trading cryptocurrency pay attention to the following points


The most promising cryptocurrencies for forex trading in 2019 are:


Conclusion

Though still very young compared to traditional currencies, cryptocurrencies are often called the future of trading. The popularity of digital money has not yet reached its peak and is growing daily, while services for crypto traders  are improving and developing at fast pace. If you are interested in making profits on the development of technology, you can safely invest in cryptocurrency. Now quite a few forex companies offer trading in cryptocurrencies and Bitcoin, in particular, and also open an account in Bitcoins. But before choosing one or another broker for trading cryptocurrencies, as well as a trading platform, we recommend that you familiarize yourself with the feedback from traders, this will allow weed out the most losing options in advance.

Author: Kate Solano, Forex-Ratings.com

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