Everyone has an idea of what cryptocurrencies represent, but there are not many who really understand how they work or how it is possible to obtain benefits when operating with cryptocurrencies.
2008 was a decisive year for the global financial system. The subprime crisis hit everyone hard by exposing the risks of the financial markets. The first cryptocurrency, Bitcoin was created in this context, as a protest against the rigidity and dependence of foreign financial institutions, but Bitcoin has evolved a lot since then. For currency traders, the cryptocurrency offers opportunities, due to its high volatility, which are difficult to ignore.
How to acquire cryptographic currencies?
Once you have made the decision to become a cryptocurrency trader, you have the following questions:
- How can I get cryptocurrencies?
- Do the principles of fiduciary currency trading also apply to cryptographic currencies?
To buy cryptocurrency against the euro, you must look for a digital exchange platform, such as Kraken, Poloniex or Bitstamp. To create an account on this type of platform, it will be necessary to provide, in most cases, electronic copies of your documents for identity verification and your address. The more you complete and verify your profile, the more options you will have for your account to be approved. Then you can buy a cryptographic currency by transferring euros from your bank account to the platform.
Once you have purchased a certain amount of cryptocurrency in the trading platform, it is not a good idea to keep it on the platform. It is best to think of an electronic wallet to secure your cryptographic codes.
As for cryptocurrency mining, this is a sure way to get cryptographic currencies, but very slow. As requirements, you need a high performance team with a good computing capacity, a mining software and the time to take care of it.
However, if you do not want to accumulate the cryptographic currency, but what you are most interested in is the cryptographic trade, it is better to use the exchange platforms or look for a broker that offers cryptographic operations or CFDs. In the case of cryptographic currencies, a derivative that allows significant gains.
Operate in the short or long term?
As a cryptographic trading strategy you can operate in the short term and in the long term.
Operating short with crypts is interesting from the point of view of possible gains thanks to the volatility of crypto currencies at this time. The fact that cryptographic currencies are not regulated to date and that financial authorities do not follow them makes them very volatile, which is reflected in the spectacular evolution of prices. Its price is strictly marked by the demand and supply in the cryptographic market. It is an opportunity, but it is also a threat for obvious reasons.
Even if you operate with cryptocurrencies, there are some basic rules that should be considered. To begin with, you have to invest what you are willing to lose. The volatility of the cryptographic currency allows you to win for weeks, but you can lose all the benefit obtained in 24 hours.
Pay attention to the currency you want to trade. A beginner cryptocurrency trader will have to choose the most famous coins like Bitcoin, Litecoin or Ethereum. Their technology is reliable and they are a bit more stable, since they have passed some stress tests.
For traders who fear the volatility of the cryptocurrency, we suggest that they operate in the long term. There are traders who hold a position for weeks or even months to avoid temporary price drops and hasty decisions.
Operations with CFDs in crypto currencies
It is true that trading platforms offer opportunities to buy and sell crypto currencies, but they were not designed for cryptographic trading, so the costs of participation could be quite high. For those who wish to avoid these costs or the steps to access these platforms, there is the option to exchange CFDs on cryptocurrencies
You can operate with critpomonedas with the trading platform MT4 and MT5. The advantage of operating with CFDs on cryptocurrencies is that you can trade long (buy) or short (sell) and obtain profits, as long as you operate in the direction of the trend.
In addition, CFDs operate under the principle of leverage. For example, if you anticipate that the price of Bitcoin will increase, you can place a purchase order of 5 CFD for the price of 10,000 EUR. If the price rises from 100 pips to 10,100 EUR and you close your position, you earn 500 EUR. Of course if the price drops to 9,900 euros, and you close the transaction, you lose 500 euros.
conclusion
The trading of critomonedas has a long way to go. It is difficult to anticipate future of the cryptocurrency market. The fact that the cryptocurrency is a decentralized free currency makes it very difficult to anticipate future market movements, since the slightest rumors can influence the behavior of the cryptocurrency traders and, therefore, in the price.
However, cryptocurrencies have changed traditional financial models with their innovative character. It is impossible to ignore the opportunities of cryptocurrency traders. With caution, a cryptocurrency trader can get more benefits than a forex trader.
Although in a single article it is not possible to cover all aspects of trading with cryptocurrencies, I hope you have covered your initial doubts and you want to discover more.
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