What Is Cryptocurrency Trading? Traders Forte
By: Cofo Komo
Tags: Trading, Trader, Cryptocurrency, Cryptocurrency News, Crypto

Cryptocurrency trading means taking a financial position on the price direction of individual cryptocurrencies against the dollar (in crypto/dollar pairs) or against another crypto, via crypto to crypto pairs. CFDs (contracts for difference) are a particularly popular way to trade cryptocurrencies as they allow for greater flexibility, the use of leverage and the ability to take short as well as long positions.

The Growing Popularity of Cryptocurrency Trading

Over the past decade, since the internet debut of Bitcoin, cryptocurrency trading has become increasingly popular. Cryptocurrencies are digital coins which are created using blockchain or peer-to-peer technology that uses cryptography — for security. They differ from fiat currencies issued by governments from around the world because they are not tangible: instead, they are made up of bits and bytes of data. Moreover, cryptocurrencies do not have a central body or authority such as a central bank that issues them or regulates their circulation in the economy. As cryptocurrencies are not issued by any government body, they are not considered legal tender.

Even though cryptocurrencies are not recognized as legal tender in the global economy, they have the potential of changing the financial landscape and this makes them hard to ignore. At the same time, the blockchain technology, which forms the foundation of cryptocurrency creation, has opened up new investment opportunities for traders to capitalize on.

Factors That Determine Cryptocurrency Prices

Apart from being the foundation for the creation of cryptocurrencies, blockchain technology has wider implications in the global economy, including the potential application in smart contracts and in the field of Internet of Things (IoT). As cryptocurrencies were only introduced in the last decade and are not considered a legal tender, they are not subject to the same market forces as traditional markets. This means that trading in cryptocurrencies is not like trading in traditional financial markets.

Due to the centralized nature of cryptocurrencies, their price movements are less affected by factors such as data releases, political uncertainty, and interest rate changes. In addition, because they are a new type of financial instrument, cryptocurrencies have relatively few correlating assets which could affect their price movements.

Nevertheless, the prices of cryptocurrencies can be affected by several factors such as changes in blockchain technologies and regulatory attempts to control their acceptability and ‘tradability’ in the financial markets. News reports such as disagreements on how a particular cryptocurrency should be upgraded or processed can also affect its price. It is likely that any security flaws exposed by hackers will also adversely affect the price of a cryptocurrency. Of course, government policies and regulations that seek to ban or limit the sale of cryptocurrencies will also affect its price.

How Are Cryptocurrencies Traded?

Cryptocurrencies can be traded in several ways. The first way is to deal in the digital crypto coin itself by buying and selling it on a cryptocurrency exchange. Another way of trading cryptocurrencies is by means of derivative financial instruments, such as Contracts for Difference (CFDs), which you are able to trade on the Traders Forte platform. The latter has gained a lot of popularity in recent years as it involves less capital outlay while at the same time enabling traders to speculate on the price movements of the cryptocurrency, without having to actually own them.

Is Cryptocurrency Trading Right For Me?

Cryptocurrency trading, just like all forms of financial trading, requires relevant knowledge, skills, and available capital. If you wish to trade the cryptocurrency market, you should first ensure that you have all the relevant skills for analyzing the market. It should be noted that cryptocurrencies are more volatile than traditional instruments and, hence, riskier than most people are used to. This volatility can provide more opportunities for making a profit, but remember it can also result in losses that are greater than what you may be willing to bear.

The Traders Forte telegram group, which currently has over 1800 members and contains channels such as #trades, a chat where only the Tradersforte admins and expert traders such as Isaac Steward, Webb Nathan, Hayden Wright, Sebastian Bryant, Justin Wouter, Clemens Randall and many others can teach you on altcoin trading, bitcoin, copy trading, cryptocurrency, swing trading, day trading, daily trading signal.

And also, you can join the “Crypto Trading Course” taught by Traderforte’s founder Koen Albers and check out Tradersforte’s YouTube channel can further information.

Starting To Trade Cryptocurrencies

If you do decide that trading cryptocurrencies is right for you, you could start by opening a trading account with Tradersforte. You can then choose the crypto CFDs you want to trade from the rich selection on offer and open a position when your analysis tells you the time is right.