Cryptocurrencies are changing the way people think about money and investing. If you are curious about how to start trading crypto but do not know where to begin, this guide from IGW-Management is here to help. We will walk you through the basics of crypto trading slowly and carefully. Let’s dive in.
What Is Cryptocurrency?
Before you start trading, it is important to understand what cryptocurrency is. Cryptocurrency, or ‘crypto’ for short, is a type of digital money. Unlike traditional money, such as dollars or euros, crypto is not controlled by a bank or government. Instead, it runs on technology called blockchain, which records every transaction securely and transparently.
Source: https://investingnews.com/crypto-forecast/
Alt-text: Crypto coins
Some of the most well-known cryptocurrencies include Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). People use them to buy goods, send money across borders, or invest with the hope that their value will increase over time.
What Are Crypto CFDs?
Now that you know what crypto is, let’s look at crypto CFDs, which are a popular way to trade cryptocurrencies.
CFD stands for ‘Contract for Difference’. When you trade crypto CFDs, you do not own the cryptocurrency per se. Instead, you are agreeing to exchange the difference in price from when you open the trade to when you close it. If the price moves in your favor, you make a profit. If it moves against you, you make a loss.
To help you understand better, here is an example: You think the price of Ethereum will rise, and you open a CFD trade. If Ethereum’s price goes up and you close the trade, you earn the difference. If it goes down, you lose that difference.
Advantages of Trading Crypto CFDs
There are many reasons beginners choose to trade crypto CFDs instead of buying actual cryptocurrencies. Here are some of the top advantages put together by IGW-Management:
- No Need for a Crypto Wallet: You do not need to set up a digital wallet or worry about security risks like hacks or forgotten passwords. Since you are not owning crypto in reality, there is less technical hassle.
- Trade Rising or Falling Markets: With CFDs, you can try to profit whether the crypto price is going up or down. This gives you more opportunities to trade, no matter what the market is doing.
Source: https://crypto.com/en/university/what-are-crypto-cfds
Alt-text: Examining market changes
- Use of Leverage: This form of trading allows traders to use leverage, which means they can trade larger amounts with a smaller deposit. This can increase their potential profits, but be careful, as it can also increase your losses.
Final Thoughts
Trading crypto might seem confusing at first, but it does not have to be. With the right tools and support, anyone can learn how to trade confidently. Platforms like IGW-Management offer a beginner-friendly platform, strong security, and helpful resources to guide you every step of the way.
Lastly, always remember: trading comes with risks. It is important to trade responsibly and never invest more than you can afford to lose.
