A few years ago, most people had no idea about cryptocurrencies or how they worked. All that’s change in the last couple of years thanks to the surge in Bitcoin’s value and the interest it created all over the world in the cryptocurrency market.
The number of traders taking advantage of the volatility of cryptocurrencies is on the rise. Anybody can learn how to trade cryptocurrencies, and the following is a simple guide for beginners.
Two Ways to Trade Cryptocurrencies
You can choose from two ways to trade cryptocurrencies. First, you can buy and sell cryptocurrencies through an exchange. Second, you can speculate on their price without actually owning and holding any of them.
- Buying and Selling Coins:When you trade cryptocurrencies through an exchange, you are actually purchasing the coins. To do this, you have to first open an account at the exchange. Then you have to exchange your fiat or traditional currency for cryptocurrency tokens. You have to store your coins (tokens) in a wallet till you are ready to sell them for a profit.
Cryptocurrency exchanges have their own pros and cons. Depending on the exchange you have signed up at, you may have to spend a lot to maintain your account. Exchanges also set limits on your deposits and withdrawals.
- Cryptocurrency CFD Trading:This is the second way to trade cryptocurrencies. CFDs allow you to speculate on the price movements of cryptocurrencies without actually owing and holding the coins. These are leveraged financial products that allow you to either go long or short. If you feel that the price of a cryptocurrency will rise, you can go long or buy it. If you feel that the price of a cryptocurrency will fall, you can go short or sell it.
CFDs are leveraged products, which allow you to open a trade position for just a percentage of the total cost of the trade. Leveraged products should be used with caution as they can magnify loss as well as profit.
How Cryptocurrency Markets Work
A cryptocurrency is a decentralized currency powered by blockchain technology. Cryptocurrency trading is done through exchanges as well as online brokerage accounts. Unlike fiat currencies, which have a physical existence, cryptocurrencies are completely electronic.
When you want to send cryptocurrency tokens to someone, you send the coins to their wallet. The transaction will be verified through a procedure called mining, which is also used to create new cryptocurrency tokens.
Several factors are responsible for movements within the cryptocurrency market, and here are some of them:
- The total number of cryptocurrency tokens in circulation
- The value of all the cryptocurrency tokens in existence and traders’ opinion of how this value will change in the future
- Media reports of the cryptocurrency
- The extent to which the coins are integrated into existing systems
- Major events related to economy, security, and regulation
Benefits of Cryptocurrency Trading via Online Brokerage Accounts
The following are the benefits of trading cryptocurrencies through online brokerage accounts:
- Online brokers are rather choosy about the cryptocurrencies they offer for trading, but exchanges will give you a wider range of cryptocurrencies to trade. Unlike exchanges, however, online brokers offer a wide range of trading tools that will help you make informed trading decisions.
- The spreads are very tight at online brokers, sometimes as low as 0.1 pips.
- Online brokers offer sophisticated online trading platforms with features such as multiple chart viewing, quote flow tracking, indicator sets, and others. Some of them also offer strategy builder tools that help you create trading strategies without having to know any coding.
- While exchanges do not maintain a high level of security, online brokers operate on financial licenses granted by regulatory bodies such as FCA, CySEC, SEC, and others. If you are unhappy about the online broker’s services, you can always file a complaint against them.
- Unlike exchanges, online brokers maintain trader deposits in separate bank accounts and never mix trader money with operational funds.
Cryptocurrency Trading at IQ Option
As previously mentioned, the number of traders who are taking advantage of the profit-making potential of cryptocurrencies is on the rise. Cryptocurrencies are highly volatile financial instruments with powerful market trends and, therefore, great potential for profits. IQ Option India offers cryptocurrency CFDs that help traders and investors to leverage their profits.
Trading cryptocurrencies at IQ Option involves the following steps:
- Select the cryptocurrency you would like to trade by clicking on the Asset button.
- Select the fiat currency value of the cryptocurrency you want to trade by using the Amount link.
- If you want to buy, click on the green Buy button.
- If you want to sell, click on the red Sell button.
- Enter stop loss or take profit orders based on your trading strategy or plan.
- Monitor your trade position carefully and enter/exit trades at the right time.
You can trade more than 20 cryptocurrencies at IQ Option, and some of them are Ethereum, Bitcoin Cash, Bitcoin, Ripple, Dash, ZCash, and others. The good news is that IQ Option keeps adding new cryptocurrencies to its portfolio.
Trading cryptocurrencies on the IQ Option trading platform has a number of advantages, as follows:
- User friendly and easy-to-use online trading interface
- Several reliable payment options
- Get started with a demo account
- Trade cryptocurrencies on your desktop, laptop, or mobile device through native mobile trading apps
- Licensed and regulated online broker
- Quick, courteous, and personalized customer support
- Hundreds of assets to trade, including cryptocurrencies
If you are trading cryptocurrencies for the first time and do not know much about it, you can get started with IQ Option’s demo account or practice account. This is a type of account that allows you to trade cryptocurrencies using virtual currency.
You can use a demo account even if you are an expert trader who would like to test a new trading strategy. You can use your demo account as long as you wish and then move on to live cryptocurrency trading.
When you are ready to start trading for real, you can start with a small capital as the minimum deposit is just $10. Plus, IQOption.com allows you to trade with as little as $1. However, you should exercise caution while trading cryptocurrencies as they are volatile assets associated with a high level of risk. If you win your trade, you win big but if you end up losing, you will lose a lot of money.