Many traders have sent queries to AtoZ Markets' team with the MetaTrader crypto questions: what are crypto CFDs and how to trade cryptocurrency in MT4? MT4 crypto trading is, in fact, similar to forex trading. The concept also involves making profits from the difference in prices from the market volatility. In this crypto CFDs beginners guide, we will explain to you the crypto CFDs basics and how to trade cryptocurrency in MT4. Of course, we will mention the best mt4 cryptocurrency broker.
August 9, 2021, | AtoZ Markets – Cryptocurrencies have shaken up the world's financial markets. This innovative digital technology provides a new dimension in contrast to traditional currencies. Since cryptos allow a person to transact quick, unregulated, anonymous payments all over the world.
Bitcoin was created in 2009, and since its launch, the cryptocurrency trading hype has been picking up. Especially, after its all-time high with its a Cryptos are known for its price volatility and developments. At that time, it was not easy for traders to invest or trade in cryptocurrencies, as it is in today's market.
Physical Bitcoin Investments Vs. Bitcoin CFD Trading
Unlike traditional currencies, cryptocurrencies are different and totally decentralized. They use blockchain technology with various platforms for various uses. All of these factors make Bitcoin and other cryptos high-unpredictability instruments since their values fluctuate heavily on fundamentals, such as government releases, geopolitical tensions, security concerns, regulatory news, blockchain news, and many other factors.
Before investing in BTCUSD MT4 or cryptos, it is important to understand the differences between physical cryptos investments and cryptos CFDs.
How to Invest in a Physical Bitcoin?
If you wish to purchase and store Bitcoins, the primary step is to create a wallet. This is often just about like opening a bank account for fiat currency. Opening a wallet can be done at crypto firms that offer wallets or crypto exchanges. You'll use the wallet to receive bitcoins, store them and transfer them to others.
Most people find it a bit confusing to purchase physical bitcoins and to protect their wallets. Moreover, this is often not suitable for traders who are use to margin trading like in the FX or CFDs market. Since buying and selling cryptos on crypto exchanges is not easy as with a trading platform in FX.
Pros of Investing in Physical Cryptos
- Purchase of altcoins
- Using Crypto Exchanges to make trades
- Purchase of fewer know cryptos
- Individual ownership of the Cryptos
- Simple international trade to other accounts
- Make payments in cryptos
Cons of Investing in Physical Cryptos
- Traders lack charting tools to analyze and trade a crypto
- Risks of Crypto Exchange hacks
- Risks of losing the wallet
- Many wallet providers now charge money to prioritize confirmations from vendors
- Unclear tax regulations when withdrawing large sums
What is Cryptocurrency CFD Trading?
A CFD (Contracts for Difference) is where a buyer and a seller agree to pay in cash any difference in prices because the value of the cryptocurrency rises or falls, rather than buying the underlying asset itself. So, there's no typical “buyer” and “seller” in such a contract. If the trend is accurately predicted, you'll get paid the difference within the value of the cryptocurrency. If not, you'll find yourself paying the difference to the opposite party.
Trading Cryptocurrency CFDs means that you don’t need to invest in the actual asset. You can make a judgment on which direction the price may go. You also don’t have to worry about insecurity. Trading CFDs also allow the trader to line take profit and stop-loss levels. This is often very useful, given how volatile cryptocurrencies are often. There are other advantages to trading CFDs.
Pros of Trading Cryptocurrency CFDs
- No need for a crypto wallet or exchange, meaningless risks
- Funds in the account are segregated and some brokers are part of the Investors Scheme Fund
- Traders can cut losses in any uncertain situation with stop loss and risk management
- As a trader of cryptocurrency CFDs, you've got access to charts and tools of study to assist you in creating decisions
- MT4 charting tools helps a trader to make a better analysis of crypto CFDs
- Professional support from brokers in different languages
Cons of Trading Crypto CFDs
- A limited selection of cryptos to trade
- Not possible to trade altcoins
- Not possible to trade less popular cryptos
- No ownership of the actual crypto
How to Start Trading Cryptocurrency in MT4?
You can trade BTCUSD MT4 CFDs and other cryptocurrency CFDs on the forex industry’s most popular online trading platforms; MT4 and MT5. Many forex brokers support both desktop and device-compliant versions, plus WebTrader for trading via your browser. You will need to open an account first with a reliable Forex broker, fund the account, and then start trading with real money. MT4 and MT5 have powerful charting tools to assist you in making trading decisions.
In this walk-through, we will show you, how to start trading cryptocurrency in MT4. Why MT4? Well, it is the most popular and used trading platform out there in the Forex market. So follow the below-mentioned steps and you can easily make your start on the Crypto CFDs market:
- The first step is to find a reliable MT4 cryptocurrency broker that offers Cryptocurrency CFDs trading. Nowadays, many forex brokers allow Cryptocurrency CFDs trading, but you should find a broker that is regulated.
- Open a demo or live account on your preferred regulated MT4 cryptocurrency broker, and download the MT4 platform using the link sent to your email after registration.
- Open the MT4 platform and log in to your account using the account information sent to you by your broker.
- Then click “View” and then “Symbols” from the top navigation window, or simply press Ctrl + U on your computer. This will show the Crypto CFDs which are listed on the platform.
- Click on the + sign beside ‘Crypto’ to open the list of cryptocurrencies. Then click on “Crypto” to select all the cryptocurrencies. Then, click on “show” to display them all in the Market Watch window. However, you can select each cryptocurrency pair individually.
After completing these steps, you can trade with your favorite cryptocurrency pairs on MT4.
Best Forex Brokers for Cryptocurrency Trading
We have prepared a rating that will allow you to use the best MT4 crypto brokers for trading bitcoins. Since 2017, it became possible to trade Bitcoin on MT4. Due to the high volatility, trading this cryptocurrency pair is becoming an extremely attractive tool for traders.
There are not so many really reliable cryptocurrency MT4 brokers that support full-fledged work with BTCUSD MT4. Therefore, this section contains only the most famous MT4 crypto brokers that offer work with the BTCUSD MT4.
AvaTrade is one of the best MT4 crypto brokers today. The company was founded and registered in Ireland, received a license in the same country by the Central Bank of Ireland (No.C53877), and also has an FCA license (No.504072), which indicates that it complies with the Financial Markets Directive.
Also has a registered ASIC group in Australia (registration number 406684), where it is regulated by the state commission for the Central Bank. He is also licensed by the British Virgin Islands BVI FSC and the Japan Futures Association FSA (# 1662).
Brokerage company OctaFX is an international MT4 cryptocurrency broker. Created in 2011, OctaFX is headquartered in London, UK. Forex broker OctaFX has an SVG license and operates in accordance with the requirements of this regulator. The broker's reliability is recognized in many countries of the world, as evidenced by the prevailing positive feedback on various thematic forums dedicated to online trading in the international currency markets.
3. Vantage FX
Vantage FX is a provider of online trading in currencies, CFDs, futures, and other financial instruments. The company is a subsidiary of Enfinium Pty Ltd, licensed AFSL 322081. The broker was founded in 2009. Registered in Australia and headquartered in Sydney.
Forex4you is a structural unit of the international financial and investment group E-Global Trade & Finance Group, Inc. The broker was created in 2007 for traders who primarily value a progressive approach to the process of trading currencies. Forex4you is one of the best MT4 crypto brokers and the firm is officially registered in the British Virgin Islands and is regulated by the FSC. This broker has offices in such countries as India, Great Britain, and Malaysia.
The rating of Forex4you among competitors is quite high due to the range of account types offered by the company, which makes it possible to choose the most optimal trading conditions.
HotForex is an award-winning STP commodity and forex broker that provides services and trading tools to both private and institutional clients. This broker is preferred by traders from all over the world as it adheres to the policy of providing the best trading conditions to its clients and allows both small-value speculators and traders using expert advisors to have unlimited access to their liquidity.
HF Markets Europe Ltd., which operates under the HotForex trademark, is authorized by the Cyprus Securities and Exchange Commission (CySec) and is regulated by that authority. In addition, the company has an international license (No. 183/12), according to which the company is granted the right to provide investment services around the world.
The choice is entirely up to you, to invest either in a psychical Bitcoin or trade cryptos CFDs. Cryptocurrency CFD trading is perfect for traders who have knowledge about Forex, stocks, indices and CFD trading through MT4. Additionally, you can make use of your favorite technical tools and indicators to trade Cryptocurrencies through MT4.
Since crypto CFDs trading is quite similar to forex trading, you've got to start first with proper training. Aside from the trading practices, you need to also learn about risk management and money management. In terms of trading strategies, there are many trading strategies available online. You only need to choose one among them that suits you most and start practicing!
Do you have questions? Let us know in the comments section below.