bobbymanha's Blog
    

Posted on Aug 24th 2021 at 04:27:51 PM by (bobbymanha)
Posted under crypto, trading

Cryptocurrency trading means taking a financial position in the direction of the price of a cryptocurrency against the dollar (in cryptocurrency/dollar pairs) or against another crypto through crypto-to-crypto pairs. CFDs (contracts for the difference by their initials in English) are a popular way to trade cryptocurrencies, as they allow greater flexibility, the use of leverage, and the ability to take positions to buy or sell, or in other words short or long.

The Growing Popularity of Cryptocurrency Trading


In the last decade, since the debut of Bitcoin on the internet, cryptocurrency trading has become increasingly popular. Cryptocurrencies are digital currencies created using blockchain or peer-to-peer technology that uses cryptography for security. They differ from fiat currencies issued by governments worldwide because they are not tangible: instead, they are made up of bits and bytes of data. Furthermore, cryptocurrencies do not have a centralized authority, such as a central bank that issues them or regulates their circulation in the economy. As any government body does not issue cryptocurrencies, they are not considered legal currency.

Although cryptocurrencies are not recognized as legal tender in the global economy, they can change the financial landscape, which makes them very difficult to ignore. At the same time, blockchain technology, which is the foundation of cryptocurrency creation, has generated new investment opportunities that traders can capitalize on.

Types of Cryptocurrencies


While there are hundreds of cryptocurrencies available today, the interest of traders seems to focus on about half a dozen cryptocurrencies. The list of the most popular cryptocurrencies includes Bitcoin, which is considered the original cryptocurrency. Due to a "hard fork" in its original blockchain, Bitcoin branched out into two additional new digital currencies: Bitcoin Cash and Bitcoin Cash ABC. Other popular cryptocurrencies are frequently traded on cryptocurrency exchange markets and online CFD trading platforms, such as DotBig (https://dotbig.com/), including Ethereum, Litecoin, and Ripple XRP.

Popular cryptocurrencies can be divided into several "types." Those intended to offer fiat currencies, including Bitcoin, Bitcoin Cash (BCH), Bitcoin Cash ABC, and Litecoin. Ethereum, on the other hand, is only intended to be 'spent' on Ethereum's smart contract platform, which can also be used to create decentralized applications (Dapps). Ethereum, therefore, is considered more of a "utility token" than a coin. On the contrary, Ripple XRP is used as a blockchain-based payment platform. Finally, the Crypto 10 index can be compared to a stock or currency index, but which is made up of the 10 largest cryptocurrencies with the largest market share.

Bitcoin (BTC)


In 2008, Bitcoin or BTC was the first cryptocurrency to be unveiled in the world. This cryptocurrency was the first to adopt blockchain technology. Today, Bitcoin has become one of the most valuable cryptocurrencies in the industry, with a value that exceeds even that of gold.

Bitcoin Cash (BCH)


Bitcoin Cash results from a hard fork that occurred on the original Bitcoin blockchain in August 2017. The change was an attempt to allow larger blocks on the original blockchain, allowing for faster processing of transactions.

Bitcoin Cash ABC (BAB)


It results from another 'hard fork,' this time on the Bitcoin Cash blockchain on November 15, 2018. The Hard fork resulted from a software update of the Bitcoin Cash blockchain that Bitcoin Cash Adjustable Blocksize Cap (which is where the 'ABC' comes from) wanted to present. At the time, the Bitcoin Cash Adjustable Blocksize Cap was the largest software client for the blockchain. The update's goal was to introduce the possibility of non-cash transactions such as smart contracts and prediction services from Oracle. Those behind the fork also wanted to replace canonical transaction orders with topological transaction orders.

However, not all members or nodes of the Bitcoin Cash network accepted the update, so when the updates were introduced, another hard fork occurred, resulting in the Bitcoin Cash ABC.

Crypto 10 Index


The Crypto 10 index is an index designed to offer a tradable benchmark for cryptocurrency-type assets. It is made up of the 10 largest and most liquid cryptocurrencies and tokens on the market. Prices are taken from the average of the major exchanges. The index was standardized at 1,000 points on December 23, 2016, and, as of January 9, 2018, it has been recalculated against the market movements of its 10 components continuously.

Ethereum (ETH)


Designed to be a fast way to process transactions, Ethereum is a blockchain network developed based on the original Bitcoin blockchain technology. Vitalik Buterin first proposed the cryptocurrency in November 2013.

Ripple (XRP)


Ripple was developed as a payment service in 2012 by Ripple Labs Inc., a US-based tech company. Ripple's main goal was to simplify the current global payment transfer system by minimizing costs and processing time.

Litecoin (LTC)


Litecoin was introduced to the world of cryptocurrencies in October 2011 as an attempt to facilitate international payments. It was designed to offer faster transaction verification compared to Bitcoin.

Factors That Determine Cryptocurrency Prices


In addition to being the basis for the creation of cryptocurrencies, blockchain technology has great implications in the global economy, including its possible application in smart contracts and the field of the Internet of Things (IoT). As cryptocurrencies were only created in the last decade and are not considered legal tender, they are not subject to the same forces as traditional markets. This means that trading cryptocurrencies are not the same as trading in traditional financial markets.
Due to the decentralized nature of cryptocurrencies, their price movements are less affected by factors such as the release of economic data, political uncertainty, and changes in interest rates. Also, because they are a new financial instrument, cryptocurrencies have relatively few correlated assets that could affect their price movements.

However, the prices of cryptocurrencies can be affected by several factors, such as changes in blockchain technologies and regulatory attempts to control their acceptability and "credibility" in the financial markets. News such as disagreements on how a particular cryptocurrency should be updated or processed can also affect its price. Any security flaw exposed by hackers is also likely to affect the price of a cryptocurrency negatively. Of course, government policies and regulations that seek to prohibit or limit the sale of cryptocurrencies can also affect its price.

How Are Cryptocurrencies Traded?



Cryptocurrencies can be traded in various ways. The first is the digital exchange of the cryptocurrency, buying and selling it on a cryptocurrency exchange market. Another way to trade cryptocurrencies is through derivative financial instruments, such as Contracts for Difference (CFDs), available on the DotBig platform. The latter has gained a lot of popularity in recent years, as it involves less capital outlay and, at the same time, allows investors to speculate on the price movements of the cryptocurrency without having to acquire them.

As you can see in the image below, a selection of different cryptocurrency CFDs is available for trading on the DotBig platform.

Once you have selected the cryptocurrency you want to trade, you must open a SELL or BUY position. Both stocks will open a trading window, as you can see below. From here, you can select the number of contracts and choose whether you want to implement any risk management orders, such as Stop Loss or Stop Profit, which are triggered once a certain price is reached.

When you are ready to close the position, click the Close button.

Is Cryptocurrency Trading Right For Me?



Like all forms of financial trading, Cryptocurrency trading requires relevant knowledge, skills, and available capital. If you want to trade the cryptocurrency market, you must first ensure that you have the necessary skills to analyze the market. It should be noted that cryptocurrencies are more volatile than traditional instruments and therefore carry more risk. This volatility can provide more profit opportunities, but remember that it can also lead to greater losses than you can bear.

Starting to Trade Cryptocurrencies


If you decide that cryptocurrency trading is right for you, you can open a trading account with DotBig. You can then choose the crypto CFD you want to trade from the wide selection on offer and open a position when your analysis tells you that the time is right.


                                                                                                                                                                                                                                               
This is bobbymanha's Blog.
View Profile | RSS
Blog Navigation
Browse Bloggers | My Blog
Hot Entries
Hot Community Entries
Site content Copyright © rfgeneration.com unless otherwise noted. Oh, and keep it on channel three.