You can trade many of the major cryptocurrencies like Bitcoin, Ethereum, Litecoin, etc. using some of the reliable and credible forex brokers in the market like Pepperstone, AMarkets, eToro, Swissquote, etc.
Bitcoin is one of the most popular cryptocurrencies out there. As we all know, the entire world of cryptocurrency started with Bitcoin itself. It is also by far the most successful crypto with its value appreciating from merely zero in 2009 to ~$7,250 as of today. The total market capitalization of Bitcoin as of May 2019 is $127.6 billion with a daily trading volume of $31.2 billion. Users can trade Bitcoins from almost all the major cryptocurrency exchanges which are currently operating in the market.
The MetaTrader4, AKA ‘MT4’, is one of the most popular Forex trading platforms. This platform is used by millions of Forex retail traders across the globe. More than 95% of the forex brokers offer buying and selling of Crypto assets and other financial securities in this platform. All of the above-mentioned forex brokers can be accessed through this platform. MT4 is considered as one of the most complete trading platforms with a lot of trading tools & features. Traders prefer using this platform as it provides a lot of advanced tools & features like 80 pre-installed indicators, multiple chart setup, automated trading, etc. There is no service fee charged, and all of these services are provided to the traders for free apart from the minute brokerage fee.
Trading Cryptos like Bitcoin on the MT4 platform is such a seamless experience for traders because most of the major Forex brokers provide all of their services for both Bitcoins and the MT4 platform. With all these credible forex brokers, Bitcoin trading can be done with most of the major fiat currencies. Also, MT4 provides a lot of technical analysis tools that can help traders in accurately trading Bitcoins and other Cryptocurrencies.
What is CFD Trading
CFD (Contract Of Difference) in financial markets, is a contract between a buyer and seller. Seller is supposed to pay the difference amount between the current value of the asset and the value of that asset at the time of when the contract is made. If the difference is negative, then the buyer pays the difference amount to the seller. Traders can make a profit by trading CFD’s depending on the price changes in the underlying asset on which the contract is made, without even owning those assets. Traders are simply using their judgment to decide if the price of that asset will increase or decrease. In CFD’s, you can make money not only when the value of the asset is appreciating, but also when it is depreciating. You can either long trade CFD or you can also short. Long trading CFD means you are betting that the value of the underlying asset will increase. And it is vice-versa when you are short trading CFD’s.
Bitcoin CFD Trading
It is just a contract between the trader and a broker. It allows traders to bet on the changes that can happen in the price of the Bitcoin. For example, if a trader thinks that the price of Bitcoin may go up, they can open an account at any broker that allows Bitcoin CFD trading and go long on the Bitcoin CFD. If the price of Bitcoin increases, trader makes money and the broker pays for it. The broker will make money, and the trader will lose if the Bitcoin price decreases. It is essential to note that Bitcoin CFDs are extremely risky, considering the price volatilities of this crypto. Hence this type of trading is suitable for experienced traders and not for beginners.
There are many forex trading platforms to trade your Bitcoin CFD’s, but MT4 remains as one of the best platforms. It is the most popular platform among retail traders, and it provides a lot of valuable features. Features like advanced charting tools, wide range time frames, and different order types are the most notable ones.
Advantages of Bitcoin CFD Trading
Unlike most of the other trading instruments, where you can only make a profit when the price of that instrument go up, in Bitcoin CFD trading you can profit when the price of the Bitcoin is both increasing and decreasing. It all depends on what your bet with your broker is. The other significant advantage of Bitcoin CFD trading is that you can leverage trade them. Leverage or margin trade refers to those trades which you make using borrowed money. It is an aggressive form of trading where there is an extreme risk and ultimate reward. Traders generally leverage trade when the odds are in their favor.
Example: Let’s say you want to buy Bitcoin worth $500 and you only have $250. You will be able to borrow the other $250 to increase your bet if you are leverage trading. Many of the trading platforms provide this leverage with some terms and conditions. So now you can trade with $500 worth of Bitcoin instead of $250 worth of BTC. Suppose if the $500 increases to $750, you can liquidate your Bitcoins and repay that loan you borrowed. You will be left with a profit of $250. Your profit could have been just $125 if you didn’t leverage trade. You also don’t have to worry about the security of that Bitcoins as you don’t own them.
It is a type of trading where the trader decides to make multiple small trades in short period of time. The profits from these kind of trades are not as much as the profits you make from swing trading, but eventually, you can make substantial profits if you are patient enough and stick to your trading strategy. It is essential to know that traders need to be extremely quick and laser-focused in order to make most of Scalp trading. Traders heavily rely of core technical analysis in order to Scalp trade Bitcoins. They use many price action charts of Bitcoin and watch the major news events very keenly, in order to make most out of the spikes these news events cause to the Bitcoin price. Having premium tools like a live feed, direct-access to the broker, and ability to place as many trades as possible is required for someone to be successful for Scalp trading.
Experienced traders who depends solely on technical analysis, prefer MT4 platform to scalp trade Bitcoin, as there are many premium tools in this platform, which can be best used for analyzing price action. Since it is very important to keenly watch the price action while you scalp trade Bitcoin, tools like Stochastic indicators helps in analyzing price action easily.
Bitcoin Day Trading
Day trading refers to all the trading activities that a trader undertakes on a single trading day. The whole objective of day traders is to get into the market, choose and take a position, watch that position like a hawk, and exit at a profit. The time spans of these trades range from few minutes to the day’s trading close. Bitcoin day trading is nothing but the buying and selling of Bitcoin on a given trading day.
Algorithmic Bitcoin trading
This refers to the trading of Bitcoin using algorithms and trading bots. A trading bot is nothing but a software program that can interact directly with financial exchanges and place bull/sell orders on your behalf. Algorithmic Bitcoin trading is nothing but buying or selling of Bitcoin using these bots. The bots make these trading decisions by monitoring the Bitcoin’s price movements and react according to a set of pre-programmed rules. A typical trading bot will analyze most of the basic market actions like volume, price, time, and orders. These bots can generally be programmed to suit your own preferences.
This automated trading is one of the best and strongest features of MT4. This platform allows you to test, develop, and apply automated bots and technical indicators for you to automate your Bitcoin trading. You can give a set of predetermined rules & instructions to these bots otherwise known as expert advisors, on when to buy/sell your Bitcoins.
Other Major Cryptocurrencies
Other than Bitcoin, there are other major cryptocurrencies that can be traded through forex brokers. These cryptos include Ethereum, Ripple, Litecoin, Dash, etc. Just like Bitcoin, these cryptos can be traded in forex exchanges like Pepperstone as well as integrated platforms like MT4.