STEEMIT CRYPTO ACADEMY SEASON 2-HOMEWORK TASK FOR [@kouba01]

Hello Steamians am in the person of Muhammad kasib and am very happy to have partaken in this lecture “Cryptocurrency Contracts For Difference (CFDs) Trading” by @kouba01. This has really opened and broaden my scope on cryptocurrency CFDs and I enjoyed it.
So let’s begin,

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What is cryptocurrency CFD?
Firstly we explain what cryptocurrency is all about,cryptocurrency is a digital form of currency which isn’t owned or controlled by one person or government but uses digital files as money and can be used to purchase goods or services.

CFD allows you to trade on the price movements of any financial market like stocks,commodities,currencies etc without owning them or they are used to theorize the price of an underlying asset .When you buy a CFD on a particular stock you don’t have to pay the full value but a fraction of it called the margin and this practice is called trading on margin.

Advantages to trade CFDs
1.You can profit in both rising and falling markets
2.Due to the leverage effect you can use ur capital more effectively.
3.Transaction cost are very low
4.They are flexible instruments that allow 24 hours trading and faster execution.

Now to Cryptocurrency CFDs it means here investors are allowed to trade on the price movement on cryptocurrencies such Bitcoin,Ethereum,DOGECOIN etc. they either make profits or loss off of them.

How do I know if cryptocurrency CFDs are suitable for my trading strategy?

Here are some of the reasons as to which you’d know if CFDs are suitable for ur trading;
i)If you’ve got ability of bearing and accepting loses can make your trading strategy suitable for CFDs.

ii)Studying the type of CDFs you are gonna be trading gives you an advantage or a upper hand on how to go about them hence you’d making quick wins on small price changes.

iii)Before one endeavors into to cryptocurrency they should know it’s a risky and dangerous game they are up against because you could lose everything in a blink of an eye hence it’s very costly.

iv)since they are leveraged products you should look for exposure to the crypto-asset market without holding coins or tokens.

v)You’d know CFDs is suitable for ur trading strategy when you’ve got the know how of how short term trading works or operates which is trading strategies in stock market or futures market in which the time duration between entry and exit is within a short period of time.

Are CFDs risky financial products?

Yes CFDs comes along with a lot of risk even greater because they are leveraged products meaning that it’s more debt than equity.With CFDs your loses are limitless hence you can end up losing all of your initial installment but then again higher charges are expected to be paid by the trader when purchasing or investing into CFDs.

Do all brokers offer cryptocurrency CFDs?

No,not all brokers offer cryptocurrency CFDs because it isn’t all the time when a transaction takes place or occurs there should be a third party in place.Even tho CFDs are risky financial products hence subjected to highs and lows but maybe in the near future am positive more brokers would troop in to offer cryptocurrency CDFs.Some brokers of the likes of eToro,City Index,avatrade etc are those that offer cryptocurrency CFDs.

Explain how you can trade with cryptocurrency CFDs on one of the brokers(using a demo account)

i)First step you open ur web browser
then type ‘avatrade.com’ on google.

ii)Secondly when the websites appears you select on Demo account

iii)Thirdly it leads you to another webpage after selection on Demo Account,here you are required to fill in ur particulars Your first and last names,your telephone number and finally you email address.

IV)Next after keying in ur particulars you get a pop up message on the next webpage that appears telling welcome after successfully creating a Demo Account.

V)Finally you can now trade using avatrade since it’s a Demo Account you can buy and sell Assets without having to deposit any money.
Now let’s say you wanna buy ETH,there’s a search bar where you type any of the cryptocurrencies you’d wanna trade either buy or sell but here our main concern is ETH so that’s what we’d search or you could scroll down all the cryptocurrencies till you get to ETH.

vi)After search and selecting ETH you’d have another webpage being opened here it’s tells you the current prices at which you could buy or sell the ETH and chart graph pattern which helps you to you price forecast the asset(ETH) and how you’d make your predictions.
Now here we are buying so select buy option which is $2,439.11 per 1 ETH or you could with wait a bit till the price drops or just go straight ahead and buy with its current price.

vii)It leads you to another webpage,here you are required to state the amount of ETHEREUM depending on the amount of money you’ve got in ur wallet.lets say we wanna purchase 1 ethereum so we select 1 in the amount,ethereum column.But there are other options you could take one being placing an order(execute when price hits) so that when the price drop it buys automatically without you having to do that yourself by setting a price limit on the asset(ETH) and same way goes to selling ur asset too.
Select buy once you are done.

That’s how you trade using a Demo Account for the start on Avatrade,once you are conversant with this you can create a real account,deposit some funds and start trading.

Conclusion
In conclusion I’d say CFDs are well founded and dependable but not really suitable for every investor.Before one takes a step into how CDFs works or operates they should at least make time for it hence studying them properly before they go ahead into investing in them.My suggestion is investors or traders should start patronizing CFDs because it is the future,even though you lose some you still win some in the end even greater.

Thanks you once again Professor @kouba01 for the wonderful lecture 😊.