Trading cryptocurrencies allows you to earn enough money on a short, medium or long term. But before you start trading cryptocurrencies, you need to know some basic principles. First of all, you need to know the different ways to speculate on this market and the risks you are exposing yourself to. In this article, you will learn more about it.
Opting for Future Contracts
Take a look at this page to learn how to trade cryptocurrency and make profit. One of the most common ways to trade cryptocurrencies is through the option of futures contracts. The primary purpose of this approach is to reduce the exposure of assets to risk. Future contracts are excellent ways to predict whether the rise or fall of a cryptocurrency in the market.
It is important to note that these types of contracts require the use of leverage to increase profits. However, you have to be careful, because the ease with which you can gain with leverage is double-edged. It is very easy to lose money.
In practice, it is also important to have a solid foundation in liquidation concepts. This is because these are positions that are open at a certain level relative to the price. In case you don't master this concept, you will risk having trivial losses on your positions. Fortunately, there are ways to limit your exposure to liquidation. For example, you can place stop losses and trace profits.
Try CFDs (contract for difference)
These products are very similar to the previous one, but here you do not have full control of your assets and the orders you will issue will not have an expiration date. The advantage of this approach is to bet on the behavior of a currency without necessarily needing leverage.
Another advantage is to trade with the euro and directly with brokers. However, you have to take into account the liquidation which is also involved here. In the end, CFDs allow you to take risks, but you have to know how to do it.