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Due to the vast amount of jargoon and processes involved the cryptocurrency market can be daunting for seasoned traders and beginners alike. How to trade the cryptocurrency market will help you better understand it. For that we have broken it down into six simple steps:
- Decide how you’d like to trade cryptocurrencies
- Learn how the cryptocurrency market works
- Open an account
- Build a trading plan
- Choose your cryptocurrency trading platform
- Open, monitor and close your first position
Decide how you’d like to trade cryptocurrencies
Trading cryptocurrencies using CFDs
A CFD is basically that type of contract from when you first open your position to when you close it to exchange the difference in the price of a cryptocurrency. Rather than taking ownership of the cryptocurrency, you are speculating on the price of the market. You can buy dubai coin, if you want to invest in Cryptocurrency.
If you open a long position, you will make a profit and the cryptocurrency does increase in value. For a short position, the opposite is true and you will make a loss too.
Buying cryptocurrencies via an exchange
It increases in value with the intention of holding it in a digital wallet and profiting if you may decide to buy a cryptocurrency which means that you take ownership of a portion of the digital currency outright.
An account with a cryptocurrency exchange, you would need a cryptocurrency wallet, before you can start. For an account you might have to join a waiting list.
Learn how the cryptocurrency market works
While making it vital to learn how it works, the cryptocurrency market operates in a different way from other financial markets. Before you start trading, understand the jargon used to describe it.
Rather than a central server through a system of peer-to-peer transaction checks, the cryptocurrency market is a decentralised digital currency network. The transactions are added to the blockchain when cryptocurrencies are bought and sold. Through a process called ‘mining’ a shared digital ledger is there to record data.
Making it important to know what is likely to move the market, cryptocurrencies are also famously volatile. To break news and government regulation, this could be anything from ICOs and blockchain forks.
Open an account
When you trade on cryptocurrencies, you can be ready to open a position much faster, instead of buying them. You don’t need an account with an exchange or a digital wallet. With a leveraged trading provider, all you need is to trade via CFDs, in fact.
There is no compulsion to add funds until you want to place a trade with IG. You can also open an account in minutes with IG.
Build a trading plan
Having a trading plan is crucial while the market can see high amounts of volatility to success for any trader which is even more for cryptocurrency traders. But you have to verify first that cryptocurrency legal in uae. Though it is very difficult to trade, volatility makes the market extremely attractive as this is a double-edged sword.
It is a methodology for exiting and entering trades which is known as a trading strategy. Which cryptocurrency you want to trade tells you an outline of your goals as why your trading plan should include risk management tools.
Either through fundamental or technical analysis: your plan should also include the way you will analyse the cryptocurrency market. While fundamental analysis looks at the macroeconomics data and external factors that impact its historical patterns.
The digital asset technical analysis focuses on the price movement of a cryptocurrency. Any news that could impact the market, it is significant to remain up to date as whichever method you use. Cryptocurrencies are especially sensitive to market sentiment.
Choose your cryptocurrency trading platform
With interactive charts, personalised alerts, and built-in risk management tools, our trading platforms can provide you with a faster and smarter way to trade cryptocurrencies CFDs. Through IG trading platform, you can also trade using:
- Your web browser
- One of our mobile apps
- Advanced third-party platforms such as MT4
Open, monitor and close your first position
You can start trading cryptocurrencies straight away. There is no need to have the ownership of a digital wallet once you have chosen your platform with IG and opened your account. You will both see a buy and a sale price listed.
For your chosen market, you need to open the deal ticket and you have to decide to trade ripple, bitcoin, litecoin, ether, or another cryptocurrency. Buys should be selected to open a long position or sell should be selected to open a short position and you will be able to decide the size of your position. Once it hits a certain level and protects your trade from unnecessary risks, remember, in order to close your trade, you can add stops or limits to close your trade.
The profit/loss of your position can be monitored in the ‘open positions’ section of the dealing platform. When you have decided that it is the right time to close your position, in the opposite direction, you just need to place an equivalent trade.