An Overview of Cryptocurrency Trading
Crypto trading enables us to trade different cryptocurrencies (like Bitcoin, for example), for fiat money (a government declared legal tender) like the US dollar. Cryptocurrencies are paired with Bitcoin, and other with fiat currency. Crypto trading is a great way to get involved with cryptocurrencies because it does not require any real investing.
Crypto Trading vs. Forex Trading
There are many reasons why trading crypto is better than forex trading, but let’s look into the three significant advantages that cryptocurrency trading has over foreign exchange.
• Easier Entry & Exit
It can take less than sixty minutes to start turning a profit trading cryptocurrencies. Conversely, seeing profits with forex trading can sometimes take weeks. Signing up for forex trading often involves a security measure like sending you registration forms and access codes via mail. It can also take days before the money transferred from your bank updates with your forex broker. Crypto trading is also relatively easy to exit. It’s as simple as moving your remaining cryptocurrencies out of the exchange and into your wallet. Exiting from forex isn’t nearly as simple of a process.
• Bigger Spread Ability
A spread is the difference between the asking price and the bid price. The asking price represents the highest amount someone wants for their cryptocurrency, also sometimes referred to as the selling price. The bid price, in contrast, represents the lowest amount someone is willing to pay for someone’s cryptocurrency, also sometimes referred to as the buying price. The spread of Crypto/USD is inherently more prominent than the USD/EUR since the market is less liquid. Even though there’s no rule of thumb when it comes to spreads, it’s realistic to expect a cryptocurrency spread to be at least ten times bigger than that of forex. And a more significant spread essentially opens up the possibility for a trading strategy called cryptocurrency scalping – the use of charts or big release news to make profits within a short time frame.
• Better Leverage at Exchanges
Traders have the option to make use of leverage trading on some cryptocurrency exchanges. Leveraged trading is the ability to trade an amount in cryptocurrency without actually having that amount readily available. Cryptocurrency exchanges can offer a leverage of up to ten times your standing (10:1). This means that for each dollar you have, you can get up to ten dollars of buying and selling power.
Crypto Trading Software
The human brain can only follow as much as several indicators at any given time. Computers, on the other hand, can monitor and test all the available indicators in a single moment. Unlike humans, computers don’t need any sleep and can remain trading actively – especially when something crucial happens.
Trading software has been in existence for many years, but they were initially only accessible to brokers and banking institutions. Today, you can buy annual access to the Bloomberg API at the cost of $10,000. Cryptocurrency software is managed on external cloud servers, so there’s no need to have a computer running all day. And most programs have settings that allow the user to choose from several strategies without the need for any coding or programming skills. It’s always a great idea to test the software before going all-in.
Crypto trading is an excellent opportunity to make lots of money. Many have seen their cryptocurrencies quadruple in value within days, with further potential to skyrocket. Much like Bitcoin has done over the past years.