The most awaited questions from the traders are how to trade cryptocurrency through your forex broker. The basic concept of forex trading is making a profit from the difference in prices from the market volatility.
November 8, 2019, | AtoZ Markets – It is easy and simple to trade cryptocurrency through a forex broker. Since its inception in 2009, cryptocurrency has grown from an unnoticed blip on a computer screen. It creates a worldwide phenomenon among the investment sectors. As cryptocurrencies are volatile, there is a possibility to make a profit from the changing of prices. Moreover, there are several strategies like CFD, day trading & swing trading. However, making and breaking fortunes through it is often-volatile trading patterns and soaring growth trends. There are now over 1,000 types of cryptocurrencies in the world.
What is Cryptocurrency Trading?
The Cryptocurrency trading has been started back as 2009. At that time, bitcoin’s value was about cents and the early buyers are now made millions of dollars.
Unlike traditional currencies, the cryptocurrencies are different and totally decentralized. They use blockchain technology with various platforms for various uses.
Any central administration does not control these cryptocurrencies. Therefore, it was possible to create different cryptocurrencies for different purposes. Cryptocurrency trading is different from the tradition trading system. The cryptocurrency trading platform uses different cryptocurrencies instead of fiat currencies. The cryptocurrency trading platforms also runs on the blockchain technology.
However, Bitcoin is one of the world’s most traded cryptocurrencies. Learning how to trade Bitcoin would be the same for another cryptocurrency trading through forex brokers.
The basic concept of forex trading is making a profit from the difference in prices from the market volatility. As cryptocurrencies are volatile, there is a possibility to make a profit from the changing of prices.
If you know how to buy or sell and when to perform the action, you almost know the process of cryptocurrency trading in a forex broker.
What Are Forex Trading Platforms?
Forex trading platforms are the place through which you can carry out your currency exchanges. It works as an intermediary between you and the interbank system to trade with each other. Typically, a Forex broker will offer you a price from the banks to forex liquidity. Many forex brokers use multiple banks to provide the best available price. You can operate your tradings from anywhere around the world. Moreover, you can trade your preferred currencies through forex trading platforms.
There are several platforms available on the internet. This platform allows you to trade with several strategies. You can alter your strategy to achieve the best outcome from the forex trading platform. Moreover, there are several trading tools available to improve your trading accuracy.
How to trade cryptocurrency through your forex broker?
Cryptocurrency trading is similar to traditional trading systems. However, the cryptocurrency trading platforms stand for the trading and exchange of cryptocurrencies.
The cryptocurrency trading means to exchange cryptocurrency with another cryptocurrency. However, it is also possible to exchange cryptocurrency with fiat currency. This depends on the policy of the trading platform.
Another remarkable way of trading cryptocurrency is the exchange of crypto contracts for differences (CFDs). This system will allow you to earn profits without exchanging. Through this method, you trade your preferred cryptocurrency broker or bitcoin trade broker. However, you do not need to have any cryptocurrency to trade. Moreover, you do not need to worry about the security and storage of your cryptocurrency.
#1 Cryptocurrency CFD Trading
Cryptocurrency CFD Trading is just a contract between the trader and the broker. For Bitcoin, It allows you to bet on the changes that happen in the price of the Bitcoin.
At first, you have to open an account with the forex brokers that allow Bitcoin CFD trading. If you think Bitcoin’s price may go up, you can simply open a buy position from your chart. If the bitcoin price rises, you will earn money from the broker. On the other hand, if the Bitcoin price goes down, you will lose and the broker will earn money from you.
It is crucial to note that Bitcoin CFDs are risky, considering the volatilities of this crypto market. Therefore, this trading strategy is suitable for experienced traders only.
There are many forex trading platforms to trade your cryptocurrency CFD’s. However, MetaTrader 4 is one of the best platforms. It is the most famous platform among retail traders that contains many valuable features. The most notable features are advanced charting tools, different order time, and wide range periods.
#2 Cryptocurrency Scalping
Scalping is doing thousands of trades within a short trading period. Scalpers target price gaps and other short-term trading opportunities that allow them to turn quickly turn. In scalping, the trader enters multiple positions in a short time frame with the expectation of small gains.
Scalping is a popular method for its ease and psychological comfort. In a scalping strategy, profit realizes as soon as possible. On the other hand, holding a position for the longer term is stressful and difficult for novice traders. With scalping, trades are rarely last more than five minutes. The multiple short-term profits ensure a version of instant pleasure.
It is hard to make a profit from this; it is possible to make substantial profits. Therefore, you have to be more patient and stick to your trading strategy. You need to be quick and laser-focused to make most of Scalp trading.
Most of the traders rely on technical analysis tools in order to Scalp trade Cryptocurrencies. Moreover, they use many price action charts of the desired cryptocurrency and watch the major news events very keenly. Then they make a profit from the spike from the news and events. There are other valuable features like live feed, direct access to broker & the ability to place many trades.
Experienced traders, who depend on technical analysis only, prefer MT4 platform scalping. However, you should watch the price action very keenly. The tools like Stochastic, MACD will help to analyze price action easily.
#3 Cryptocurrency Day Trading
Day trading refers to complete all the trading activities within a single trading day. The objective of a day trader to analyze the market and take a suitable position. Then watch that position like a hawk and exit with a profit. The running time of the trade maybe a few minutes or a whole day. Cryptocurrency day trading is nothing but the buying and selling the cryptocurrency on a given trading day.
#4 Algorithmic Crypto trading
This refers to the trading of the cryptocurrency using algorithms and trading bots.
A trading bot is a software that can cooperate directly with financial exchanges and place the orders on your behalf. Algorithmic Crypto trading is nothing but buying or selling of cryptocurrency using these bots. The bots take trading decisions by monitoring the price movements and react according to the pre-programmed rules.
The trading bot usually analyzes the most basic market actions like price, volume, time, and orders. You can manually set these programs to suit your own preferences. This automated trading is one of the greatest and most solid features of MT4. MT4 allows you to develop, test and apply automated bots with technical indicators for you to automate your indicators.
You can set predetermined rules & instructions to these bots on when to buy/sell your preferred cryptocurrency.
Each trading system comes with its own set of risks and rewards. There is no perfect strategy that exists in the world that suits all traders. To gain from the forex or crypto market, you have to get proper training with suitable money management skills. Moreover, there are lots of trading strategies available online. You just have to choose one of them that suits you most.
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