(Newswire.net — July 1, 2019) —
The hibernating bear
The bear has given way for the bull. Anyone engaged in cryptocurrency, specifically Bitcoin knows that this somewhat puzzling statement is a positive thing. It means that there has been a surge in the market and the value of Bitcoin has risen. With it, so has the interest in investing and trading. Traffic on sites such as Bitcointradingsites.net have increased and traders are busying themselves with gaining as much information as possible. This is especially important if you are a novice at the cryptocurrency game as the volatility of the market is a worthy adversary. I.e. even though there is great potential for a successful ROI, you should still make a conscious effort to only invest within your financial capacity. Then there are all the technical terms traders need to be aware of and read up on in order to understand the rules of engagement. For instance, there is a difference between trading real Bitcoin and trading Bitcoin CFDs. This is an important distinction and traders are wise to recognise it early on. As with any business involving investments and where there is a reliance on market value, information again, is key. In order to understand the different fluctuations, it is crucial to constantly monitor changes.
The major difference in trading
It might come as a surprise to some traders that when you invest in Bitcoin at a CFD broker, there is no real purchase taking place. Not in comparison to a real Bitcoin exchange. Trading Bitcoin CFDs in this scenario usually indicates for instance engaging in margin trading. Meaning traders will use broker platforms where they are able to trade Bitcoin price changes using leverage. The leverage will typically range from around 2.5:1 up to 100:1, depending on the broker’s trading products. A 2.5:1 leverage means that for every $1000 in net balance, a trader can purchase approximately $2500 in Bitcoins. Margin trading will at times also include additional lending charges due to the fact that traders will borrow money in order to open the leveraged position.
Using CFD, which is basically a synthetic product with the purpose of tracking the prices of Bitcoin, means that the buyers will mostly follow the price over a period of 24 hours in order to determine whether to enter or exit. Real Bitcoin purchases and Bitcoin margin trading in the form of Contracts for Difference is usually taking place on different trading platforms. Even though trading using CFD is not as widespread as buying Bitcoin for real, it is still holding its own displaying a lot of advantages such as being able to trade other assets when there for instance is a decrease in the market. It’s the financial trading product professional traders usually make use of.
ther important aspect to take into consideration are the different regulations in place in different countries when it comes to Bitcoin trading. For instance, in the US margin brokers are usually not allowed in contrast to CFD which is wildly popular in Europe.
Improve your trading skills with the best bitcoin trading tools! Research and trade up to 150 BTC pairs in the market, bitcoin 360 ai is the best bet for all bitcoin-related trading.
Exercise caution
The cryptocurrency market is volatile, more so when buying and selling Bitcoin then when engaging with CFD broker but exercising caution is always advised. Especially if you are new to the trading business but also for people at risk of addiction. It is a heady feeling of engaging in the market and experiencing the thrill of the game but you should always abide by the two golden rules. Stay informed and never, ever, invest more than you can stand to lose.