The Steemit Crypto Academy Week 10 - Homework Post for @kouba01

It has always be a joy partaking in the homework task submission for the steemit professor. Today I will be making a submission to another homework task by professor @kouba01 which is below

You may have heard of the word “cryptocurrency”, I believe that is highly likely with the way the world is becoming digital. What is cryptocurrency?

Cryptocurrency is simply a decentralized digital or virtual money. This means that is is not a physical currency controlled by a central bank like our fiats and therefore, the value cannot be determined by them. I mean, can you Imagine a currency not being controlled by the government?

The acronym CFD stands for "Contract for Difference",meaning that the contract is based on the difference in value between the opening price and the closing price. CFD trading is a trading method that enables traders to trade and invest in any asset due to the contract they have with their broker (a financial services company that provides traders access to the market) without actually owning the assets.

Traders are priviledged to take a venture on the condition or price of the assets. Such assets could be shares, cryptocurrencies, fiat, commodities, indexes, etc.

An example is Gold CFD, this enables investors to tap into the benefits and risks of gold without actually owning it. CFD makes it possible for traders to make profits when selling or buying, thus profits can be made whether the price of an asset is up or down.

IS IT IMPORTANT TO TRADE CRYPTOCURRENCY ON CFD?

CFDs are leveraged products. This means that a trader need only to deposit a small percentage of the overall value of the desired asset. For instance, a big company sells its shares at $7000 each and a trader wishes to trade on it. The trader would normally be expected to buy the share at its usual price of $7000, but with CFD, the trader would provide a minimal percentage of the overall amount, probably as low as 5% of the overall value in order to trade on it.

There are great advantages to trading cryptocurrency on CFD, don’t let anyone tell convince Otherwise.

Cryptocurrency CFD enables traders take a venture on the difference between the current price and future price of any cryptocurrency of their choice without actually owning it.

Cryptocurrency CFD traders would not need to be aware how to acquire and store cryptocoins securely before they can speculate on them.

It would not be necessary for the traders to address the security matters regarding cryptocurrencies such as setting up a blockchain wallet, encrypting the wallet, storing their private keys and backing up their wallets.

The traders do not need to entertain the fear of becoming a victim of the blockchain wallet hacks that seem to be the new thing now.

ARE CFDs RISKY FINANCIAL PRODUCTS?

The truth about life is that anything with advantages has disadvantage.
Earlier, we talked about CFDs being leveraged products. As the initial deposit is only a minimal part of a traders exposure, the trader could loose more than his deposit if the trade goes against the predicted direction thereby causing the trader to loose the money deposited.

Crypto trading is very volatile because the value is not controlled by an entity, therefore price varies. It could rise and fall at any moment.

BROKERS THAT OFFER CRYPTOCURRENCY CFD

Though not all brokers offer cryptocurrency CFD, there are so many brokers that do.

1. OCTAFX (with a minimum deposit of $50 and a maximum leverage of 1:500)

2. EXNESS (with a minimum deposit of $1 and a maximum leverage of 1:2000)

3. AVATRADE (with a minimum deposit for $100 and a maximum leverage of 1:30)

4. ICMARKETS (with a minimum deposit of$200 and a maximum leverage of 1:500)

5. FXTM (with a minimum deposit of $10 and a maximum leverage of 1:30)

6. Deriv (with a minimum deposit of $5 and a maximum leverage of 1:1000) e.t.c

HOW TO TRADE WITH CRYPTOCURRENCY CFD ON A BROKER.

We would be talking about the deriv broker, formally known as binary.com.

Deriv is a platform that offers CFDs, forex and binary otpions. The platform also offers demo accounts which anyone can use to practice their trades without depositing money.

As a beginner, I would advice you to start with a demo account so you can get familiar with the market and the broker itself. Learn to use your stop loss to minimize the losses made, view your market charts and understand it.

STEPS IN OPENING AN ACCOUNT ON DERIV;

1.Go to the website (deriv.com)

1. Click on “create demo”.

1. You will then have to input your email and click on the box to agree with the available terms.

2. Click on “create demo account”.

3. You will get a confirmation email, go to your email and confirm your registration.

1. Scroll down to click on “confirm email to finalize your confirmation.

1. It takes you to the dashboard where a popup will appear for you to state your country and another appears for you to create an email.

2. Click the top button at the right to leave your gmail and go to your main browser.

3. Click on the arrow facing down at the top- right side after your demo amount. There you will see a pop up to indicate that you are using a demo account and also showing you that you have an option to go for a real account if you so wish.

4. Click the add button for financial and create a password for your financial account (ensure that your account login and password are kept safe).

1. You can either download metatrader5 app and input your account login and password to access your account, or you click on trade on web terminal option.

1. If you are using the metatrader5 app, you simply have to go to your watchlist and add a cryptocurrency pair of your choice to trade on or you add the cryptocurrency pair to your watchlist on the mt5 dashboard on your web terminal.

All Screenshots are taken from Deriv.com