When it comes to cryptocurrency trading, you need to consider whether the market you have chosen will rise or fall in price. And interestingly, you never own a digital asset. In fact, trade is done with derivative products such as CFDs. Let’s look at the benefits of cryptocurrency trading. Read on to find out more.
Although cryptocurrency is a new market, it is quite volatile due to short-term speculative interest. The price of bitcoin fell to $ 5,851 from $ 19,378 in 2018 in just one year. However, the value of other digital currencies is fairly stable, which is good news.
What makes this world so exciting is the volatility of cryptocurrency value. Price movements open up many opportunities for traders. However, this is also associated with great risk. Therefore, if you decide to study the market, just make sure you have conducted research and devised a risk management strategy.
Hours of operation
As a rule, the market is open for trade 24/7 because it is not regulated by any government. In addition, transactions are made between buyers and sellers around the world. There may be short downtime when upgrading the infrastructure.
Liquidity means how quickly a digital currency can be sold for cash. This feature is important because it allows you to conduct transactions faster, increase accuracy and better prices. As a rule, the market is somewhat illiquid because financial transactions take place on different exchanges. Thus, small deals can bring big changes in prices.
Since CFD trading is considered a leverage product, you can open a position on what we call “margin”. In this case, the value of the deposit is a fraction of the value of the trade. This way, you can enjoy great market access without investing a lot of money.
A loss or gain will reflect the value of the position at the time of its closure. So if you trade on a margin, you can earn huge profits by investing a small amount of money. However, it also increases the losses that may exceed your deposit on the deal. So, make sure you take into account the total value of the position before investing in CFDs.
It is also important to make sure that you follow a solid risk management strategy, which should include appropriate limits and stops.
Quick account opening
If you want to buy cryptocurrency, make sure you do it through an exchange. All you need to do is register an exchange account and keep the currency in your wallet. Keep in mind that this process can be restrictive and time consuming and labor intensive. However, once the account is created, the rest of the process will go fairly smoothly and without complications.
In short, these are some of the most notable benefits of cryptocurrency trading here and now. I hope you find this article very useful.