Libertex- Offers crypto CFD trading to users

How to trade crypto CFDs

The cryptocurrency market is becoming more mainstream by the day, with investors getting involved across the spectrum, from retail to institutions, looking to gain some exposure.

Trading CFDs for cryptocurrency

Libertex is a multi-award winning online broker that offers trading of cryptocurrency CFDs among other asset classes in one account. Contracts for Difference, or CFDs, are a type of derivative instrument that allows traders to speculate on a wide range of financial markets.

They can take a trade on whether they think the price will go up or down, without taking direct ownership of the underlying asset.

There is no need to open an account with a cryptocurrency exchange or a crypto wallet to trade. Libertex takes the cryptocurrency price from the most trusted exchanges, to ensure accuracy and competitiveness.

How much money do you need to start trading crypto CFDs?

One of the main advantages of trading crypto CFDs is that a nominal amount of capital can be used. If you’re just starting out, it can be a good way to kick-start your trading journey thanks to the ability to use leverage.

Essentially, a smaller amount of capital can give you access to a higher value trade. For example, €100 in your trading account with a leverage of 1:30 allows you to open trades worth €3000. Be aware that leverage can give you the opportunity to generate higher returns, but it also increases the level of risk.

When deciding how much capital to use in your trade, it’s important to consider your general risk appetite and how tolerant you are. Get an understanding of the volatility of the various cryptocurrencies as they vary, some swinging more than others.

Different Cryptocurrency CFD Trading Styles

● Scalping – This trading style focuses on profiting from small price changes, trying to profit quickly and getting in and out of a trade quickly. This will usually be done by looking at a chart with a lower timeframe such as 1-minute or 5-minute.

● Day trading – It involves buying and selling CFDs through a single day’s trading, with the intention of making money from small price fluctuations.

● Swing trading – This would involve holding CFD positions for a few days to a week, looking for larger price swings in the market.

● Position Trading – A trader will typically hold positions for weeks or even months, it will be based on following a long term trend, look at a daily to the monthly chart.

Cryptocurrency Trading Risk Management Strategies

When it comes to trading, risk management is one of the most important aspects to consider. With the simple use of a stop loss, when you place a CFD trade, you also set a predetermined level at which the position will close if it does so against your bias. It can prove to be extremely effective in preventing large losses.

Another risk management strategy to explore is the relationship between risk and reward. Typically, as a general rule of thumb, traders will want to place a trade with a minimum risk to reward ratio of 2:1.

For example, if you make a trade, your risk might be €50, with the chance to make €100. It allows traders to potentially double their money.

Including a predetermined stop loss and a well-considered risk-to-reward ratio are possibly good simple risk management strategies. However, it is still important to note that trading is still high risk.

Research and news reading before trading

Before entering a crypto CFD trade, it is important for traders to potentially assess the fundamentals behind the asset they are trading. Is there, for example, any important news that could have an impact on the digital resource?

Cryptocurrency headlines and updates are constantly coming out, and it’s also important to be in tune with what may be happening fundamentally.

Simply digesting news articles surrounding the assets you are trading can even potentially help you make an informed trading decision.

Exchange for more: Libertex

Part of the Libertex Group, Libertex is an online broker regulated by the Cyprus Securities and Exchange Commission.

It gives traders access to CFDs across markets such as cryptocurrencies, commodities, Forex, ETFs and more. Libertex also offers commission-free investments in real shares, market spreads apply.

Over the years, Libertex has continued to be globally recognized, collecting 40 prestigious international awards and recognitions.

It has won the likes of “The Most Trusted Broker in Europe” (Ultimate Fintech Awards, 2022). Libertex is the official trading partner of Tottenham Hotspur FC and Bayern FC, bringing the exciting worlds of football and commerce together.

The Libertex Group has grown into a diverse group of companies since its founding in 1997, serving millions of customers in multiple countries worldwide.

For more information about Libertex visit their website.

Risk warning: CFDs are complex instruments and have a high risk of losing money quickly due to leverage. 62.2% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Disclaimer

All information on our website is published in good faith and for general information purposes only. Any action the reader takes on the information contained on our website is strictly at their own risk.