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How to buy cryptocurrencies for beginners?


To venture down the path of cryptocurrency trading, one needs a good understanding of what trading typically entails. We’ll be looking at both topics in this article. Investors and traders turn to different financial markets to trade a variety of financial instruments. This includes currency pairs, stocks, indices, metals, commodities, cryptocurrencies, and others. They both do this to generate potential profits.

However, how they do this usually differs, particularly in terms of strategy and time horizon. Investors typically look to make a return over a lengthier period (months, years, or decades). In contrast, traders seek to leverage market volatilities, opening and closing multiple positions more often, and accumulating profit with each trade.

Trading strategies

A range of trading strategies exist and can be applied to all types of financial instruments, including cryptocurrencies. The strategies typically dictate, to some extent, the way traders enter and exit positions over specific timeframes. Some of the most popular trading strategies are:

Technical analysis and cryptocurrencies

Technical analysis is one of the most popular tools used by traders to make trading decisions. It can be applied to most financial markets and is often used by global cryptocurrency traders. This is largely because the crypto market is a highly volatile space and primarily driven by speculation. This makes the implementation of technical analysis tools highly useful.

Cryptocurrency trading via CFDs

A CFD (Contract for Difference) is essentially a financial agreement between a buyer and seller that instructs the buyer to pay to the seller the difference between the initial value of an asset and its value when the CFD is entered into. Through CFDs, traders can speculate on price movements without taking ownership of the underlying asset. Speculating on cryptocurrency price fluctuations via CFDs or buying and selling the underlying coins on an exchange is known as crypto trading. 

Leverage

Crypto CFD trading is typically a highly leveraged activity. Leverage enables a trader to open larger positions than what their account balance would typically facilitate. In essence, it is the act of borrowing money with the hope of maximising returns. Leverage is however highly volatile and the risk of losing a massive sum of money is substantial. This applies to crypto trading just as much.

How to trade crypto CFDs

The steps to starting your trading journey are relatively simple.

Key components of a trading plan:

Keep learning

If you’re only now venturing into cryptocurrency trading, investing time into learning as much as you can about this space is vital.  In the process of selecting a broker, establish to what extent they can help you widen your scope of knowledge. Ascertain the educational resources they provide to continuously boost your skills and expertise.

T4Trade Academy

T4Trade is a powerful global broker that offers a wide range of tradeable instruments across several asset classes. Its Academy provides access to unique trading insights via webinars, podcasts, videos-on-demand, e-books, and Live TV. The information provided caters to beginner and professional traders and is delivered by experts to enhance your trading strategies.

In conclusion

The cryptocurrency market is an exciting space for cryptocurrency traders. It offers many opportunities for generating profitable returns, provided you remain mindful of the risks involved. Be vigilant of the drawbacks of cryptocurrency trading and ensure you have a proper strategy in place to handle whatever challenges are thrown your way. Always monitor the markets, follow the news, and stay informed.

#source


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