As you have already seen, a broker needs to offer the right crypto CFD trading platform so that you have the tools to analyse the markets. Other qualities are also extremely important.
The crypto trading and CFD industries have many trustworthy brokers, markets, exchanges, and platforms. However, you will also find instances of sites that do not deliver promised services or engage in outright fraud.
For these reasons, the first step when selecting a broker for CFD trading cryptocurrency is to always look for two things: regulation and transparency. The site should be clear about the terms, bid/ask spreads prices, account minimums, and leverage ratios. Second, they should be accredited by one of their country's financial regulators.
There are hundreds of cryptocurrencies, but few have the liquidity and stability necessary for active trading. A broker should offer the most stable and time-tested currencies.
Market access is also important. One of the advantages of cryptocurrencies is that they are available worldwide, seven days per week. You should find a broker who does not impose arbitrary market hours, like TMGM.
Brokers should offer leverage so that traders can increase the size of their positions. At the same time, crypto markets are extremely volatile, so margin ratios should be reasonable.
Frequently Ask Question
With CFDs, you do not need to hold the cryptocurrency. Instead, you agree to pay or accept the difference in price between when you open the position and when you close it.
With this arrangement, you can trade the markets without worrying about the headache of holding cryptocurrency, which requires online wallets, complex digital addresses, and careful security.
- Since you trade contracts and not the actual currency, you do not need to hold your Bitcoin, Ethereum, or Ripple in a digital wallet. You can simply focus on reading the market rather than dealing with all other distractions.
- You also avoid the fees associated with sending the digital currency to your wallet and the security concerns of holding it.
- CFDs allow you to use leverage to increase your position size without the upfront capital.
- You can open an account with MetaTrader 4. You can trade crypto CFDs using advanced charts and customised indicators and take advantage of state-of-the-art order processing and back-testing features.
Two options stand out if you care about liquidity and trading volume: Bitcoin (BTC) and Ethereum (ETH). These two can experience a high degree of volatility, but you can also find a wealth of data and analyses to inform your trading. Other choices, like Ripple (XRP), are slightly less volatile, but you need to use leverage to take advantage of smaller market movements.