New and exciting, cryptos present traders with massive levels of opportunity and risk.
At FOREX.com, rather than buy cryptocurrencies on an exchange, you can trade cryptocurrency CFDs which enables you to speculate on the price without ever actually owning it.
Reasons to trade crypto CFDs
Go long or short
Crypto CFDs enable you to profit from both rising and falling prices:
- You can go long, meaning that you buy cryptos in the expectation that they will rise in price
- Or you can go short, meaning that you ‘sell’ cryptos in the expectation that the price will fall
Shorting a crypto enables you profit when the price decreases in value. This is not possible when you buy actual cryptocurrencies.
It is also worth noting that shorting can be used to hedge any exposure you have.
Read more about CFDs
Trade 24/5
At FOREX.com, you can trade cryptos 24 hours a day, 5 days a week from 5pm Sunday to 5pm Friday GMT.
Leverage
Leverage lowers the cost barriers to trade cryptos. It enables you to put up a fraction of the deposit to access a much larger trade size.
At FOREX.com, our crypto margin requirements start from 25%. This means that to trade 1 unit of a cryptocurrency, you only need 25% of the value of that unit to take a position.
Leverage can magnify your profits, but it can also magnify your losses. This is a critical trading concept to understand.
Read more on leverage
Volatility
Cryptos can experience massive changes in price over a short period of time. It is not unheard of for Bitcoin to experience a 10% swing over a weekend.
This presents traders with big opportunities and risks in equal measure.
No wallets
By trading crypto CFDs, you don’t have to deal with cumbersome digital wallets and setting up additional accounts – all of which is required when you buy cryptos for real.
Risk management tools
If you buy cryptos on an exchange then you have to constantly monitor the price.
If you trade using crypto CFDs at FOREX.com, you can use tools like stops and limits to ensure you’re not caught out by any adverse market movements.
Ready to start trading? See How to trade cryptocurrencies