Crypto Academy Season2week2 Homework Post For Professor@Kouba01 by@Nikoyana

Good day steemians and I am very happy to welcome our new professor @kouba01.
Firstly I will introduce contract for difference(CFD).

Link

Contract for difference in business terms is the difference in the worth or price of an asset or investment between two parties who enter a contract from the start of the contract and the end of the contract.when the price or worth of the asset increases at the end of the contract the buyer will be paid and if the value decreases the seller gains.

Contract for difference(CFD) in trading means predicting on the future value of stocks,currencies,cryptocoins,bonds by entering a trade on these assets whether to sell or to buy based on if thier value is increasing or decreasing and these traders are not the owner of these assets.

1.what is cryptocurrency cfd

Contract for difference in crypto has to do with predicting of the future prices of cryptocurrencies whether they are appreciating or depreciating, here the trader enters into a contract with a broker to trade the chosen cryptocurrency that believes he can predict the outcome of the cryptocurrency based on the traders analysis of the crypto currency whether decreasing or increasing.

The broker offers the chosen cryptocurrency to be traded on by the trader whether that currency will be traded (short) sell because it will depreciate in the near future,or traded long(buy) because it will appreciate in the near future all these trades are done by the trader,

Trading cryptocurrency CFD's are made possible because of introduction of contract for difference trading platforms,traders here can enter trade with just a fraction of the total amount of the asset they want to trade with known as margin.

Cryptocurrency CFD's enables users take advantage of the fluctuation prices of cryptocurrencies inorder to earn from these fluctuation prices.

2.How do I know which cryptocurrency cfd are suitable for my trading strategy.

a)Observe the price movements of cryptocurrencies by using technical analysis to observe current market price by studying charts or trends or indicators on chart to observe the current status of the cryptocurrency, sentimental analysis by observing the news or information about the price of the coin on media platforms.
Another one is fundamental analysis to know the performance of the crypto coin, the supply or demand availability in the market,all these should be done before the cryptocurrency is selected and traded

b)Crypto currencies CFD should be traded with a low capital.

c)leverage should be minized in a sense that the higher your leverage when the trader incurs loss the loss will also be higher.

3.Are CFD's risky financial product
.CFD's are risky in nature because based on all the analysis of the trader, these analysis may not go in the traders favour because most cryptocurrencies are determined by the market forces of supply and demand and these cryptocurrencies analyses are not always favourable.

4.Does all broker offer cryptocurrency CFD's?
With the risk associated with CFD's I don't think all brokers will offer CFD's

5.Explain how you can trade with cryptocurrency CFD's on one of the brokers using a demo account
a)First and foremost you sign up by registering and login
b)move your mouse to the trade markets tab

c)move the mouse to select the crypto asset tab

d)i selected litecoin
e)move the mouse to trade tab

f)input the amount and choose a position then click on open trade

Thanks
cc
@steemcurator01
@steemcurator02
@kouba01
@steemitblog