Steemit Crypto Academy Season 2 Week 2 Homework Task By @fadil1: Cryptocurrency CFDs Trading
Good day steemians,
It is another brand new week on steemit crypto academy and I will like to thank our one and only professor @kouba01 for his great job and for his interesting lecture which on cryptocurrency contracts for difference (CFDs).Am kindly here to present my homework task on our topic and I will like to say I really learnt a lot and enjoyed the lecture.
To start with the CFDs which is the main issue and my homework task? I will like to let you get a little knowledge about cryptocurrency in the crypto market.
A cryptocurrency is a form of payment that is exchanged for goods and services. It works by exchanging real currency for cryptocurrency which you can use to buy or sell things online in many parts of the world. It is also popular in a number of reasons because it is a decentralized network that runs that runs on a peer to peer system meaning that there are no financial institutions monitoring transactions between one person to the other with cryptocurrency transactions.
According to the website coinmarketcap.com, over 6700 publicly traded crypto currencies in the world. The most popular of which are :ethereum, litecoin, ripple, dash and the master amongst then bitcoin.
Blockchain is the platform for which cryptocurrency works with and far as blockchain is decentralized , it helps in managing all transactions. Many people or investors will like to raise more funds without putting any assert and I think using CFDs in investing will be the best. Let’s now move to the main issue.
CFD simply means Contracts For Difference which are alternative to other forms of trading. They allow you to trade on where you think the price of a financial market will be up or down. They can also be used to trade a wide range of market including shares, currencies, stock indices, commodities and many more.
A CFD is in an agreement to exchange the difference in value between the points of contracts when it is open and the price when it is closed. This means CFD trading depending on your position allows you to profit if the value of the share for any market moves down as well as it is up and that is if you are only trading on a price derived from the market value. This means you don’t actually own the share or asset which can make it cost effective.
In a cryptocurrency CFD, each share has a buy a sale price known as the bid and the offer which is derived from its market. If you think the market will rise in value you buy a bit of a price going long but if you think the price will fall you sell as the bid price going short.
The more the market moves in a direction you protected the more profit you make but if it moves the opposite direction the more you could lose. It mostly deals with how long you keep the trade open.
You can try it on a huge range of financial market from all around the world (forex, commodities, stock indices, exchange traded funds and many more).
There are many advantages that I think an investor can get from trading in Cryptocurrency CFDs and some of the advantages are listed as follows:
In the cryptocurrency CFDs, a capitalist have the chance to buy and sell with their fiat currency .
A capitalist have a great chance to earn in the market both positive and negative.
Buying and selling of cryptocurrencies are always made easier and faster and there is no need to go through difficult steps in receiving of tokens.
There are some mere disadvantages of cryptocurrency CFDs and below are some of them:
An investor can lose much of his profit and even some of his investments when margin trades are not controlled well.
And also CFD trading have what we call leverage ratio, when this is not known by investors they run a very big lost and sometimes gets more profit as well. So I will like to edge everyone to know more about this before taking a risk to invest.
You must have it in mind that purchasing cryptocurrency may be costly.
Always try to have more knowledge about cryptocurrency market.
Look for a trading platform with high security and trade with them.
Do not put on more money when trading for the first time.
Risk taking is one of the key key you mustr have in mind because anything can happen.
Investors must be ready to lose because of those volatility of assets.
Yes surely they are,
The market value of assets are always more influential because those assets are mostly expose to market in which they trade. Although every prayer of an investor is for the basic asset to move in the direction that will increase profit , but that can be the case it will one day move in the opposite direction where traders will run at lost.
And also, a trader who is also part of your platform also has the chance to give asset in transaction of capital. The supplier of the will always give contracts for asset being traded in a CFD. So this always make traders know each other a lot. This sudden risk behind all this is that when traders fails to agree with what they are task to, that basic assert you are seeing will no longer be important and the trader can run a very big lost.
Not all brokers will like to offer you cryptocurrency CFDs. This is mainly based on the broker you are dealing with. Although most of the brokers around will like to add cryptocurrency CFDs as part of their trades but many will not also want to add them to their trades. Some of the traders who usually add cryptocurrency CFDs to their trades are: XTB, ETORO and PLUS500.
ETORO is the platform I will be using, so I will like to edge everyone to take a good note and follow the steps involved to be able to cryptocurrency CFD on ETERO.
STEP 1
Search for ETERO on any internet browser and visit their page with this link source
A pop up menu will appear then you will click on join now
STEP 2
If you want to use a demo account, you need to change the real button to virtual button.
Another menu will appear then you now join with your email address, After that you fill in your details and tick all small boxes to continue to create your account.
STEP 3
Click on any of the cryptocurrency you like but for me I will be going for bitcoin.
Purchase your virtual bitcoin by clicking on the circled section.
STEP 4
Another menu will appear asking you to expand the amount you want to purchase, after purchasing click on open trade.
STEP 5
A trade menu will now drop open and a dedicated part is tagged named profit. When it is negative and red it means profit is running lose but when it is green and positive it means profit has been increased.
In brief, i will like to conclude by saying investment with cryptocurrency CFDs requires less capital to reduce more lose. And also investors should be aware of risk because anything can happen. Also investors should learn more about trading platforms before starting a trade.
Thank you very much professor @kouba and may the good lord be with us and bless us all.
Hi @fadil1
Thanks for your participation in the Steemit Crypto Academy
Feedback
This is fairly done. Kindly put more effort into your work.
Homework task
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