How to trade digital currencies? Today we present an explanation of cryptocurrency trading. In our current era, digital currencies have been imposed, especially after the great demand, it has seen by its users on the trading market.
It became traded just like regular currencies within the forex market, or just like the trading of stocks as well, and with this, digital currencies were able to be a major part of the trading market, so today we will discuss in detail the mechanism by which digital currencies are traded.
What are digital currencies?
They are virtual currencies that do not exist on the ground, that is, they are only electronic, but despite this, they enjoy acceptance by their users in various parts of the world, and this made them have a distinctive price value.
The price value of it may be exacerbated by the price value of the base local currency that is dealt with, and this is according to the price value of each digital currency separately.
What makes these currencies acceptable is that they are encrypted, have limited productivity, and their trades are subject to complex algorithms that are difficult to copy, or imitate, and thus be safe when dealt with by their users.
What are the types of digital currencies?
There are more than a thousand types of cryptocurrencies, collectively known as altcoins, and both Bitcoin and Ethereum are among the largest types in this market, as Bitcoin represents about 38% of the digital currency market, and Ethereum 18% of the digital currency market.
Other digital currencies are traded, but they may be less popular than their previous counterparts in the stock market, which include Litecoin (LTC), Dash (Dash), Zcash (ZEC) Monero (MXR), and Ripple (XRP).
What are the best digital currency trading companies?
The China team has created a table that includes the best digital currency trading companies in the world to provide visitors with the best companies that can open investment portfolios through which to start trading CFDs on various digital currencies, and the following companies are among the best licensed digital currency companies at all.
Explanation of cryptocurrency trading
There are a lot of digital currency trading options that are relied upon, and it can be likened to trading on regular currencies in the forex market or marketing digital, where you practice short and long-term buying and selling operations on those currencies, concluding deals on them, and taking advantage of the difference in selling, buying, and making gains. From behind it.
Ways to trade digital currencies
Through stock exchange
Just like the foreign currencies that can be traded in the Forex market, digital currencies can be traded with this mechanism.
Where it is possible to wait for the daily or weekly fluctuation that occurs on its price value and then exploit the rise and fall of the price value by buying or selling the currency.
Trading through a broker
By resorting to a forex broker who has access to the stock exchange, and provides you with a trading platform to manage your trading from it, you can start your investment with him on cryptocurrencies with ease, without the need for a great experience in the world of trading.
It just needs to learn the basics, and then you can buy and sell digital currencies according to the deal that you find suitable for you.
Via futures contracts
Here, digital currencies will be traded at a specific price with a future delivery time, which is also known as derivative contracts, and this is because the value of the financial instruments that are traded, regardless of their types, are derived from another class of assets, and in which the two parties are made on the date of sale and purchase in advance. , But with a postponed date.
Via binary options
In it, an expected price of the digital currency will be determined within a future period of time, and you have the right to buy the currency when its price rises at a predetermined price between you and the seller.
While you also have complete freedom to choose not to complete the purchase if the price is lower than the expected price that you had, and predicted, then the buyer will keep his shares of digital currencies.
By investing in funds
It is also an easy way to trade digital currencies, in which a group of investors can invest in funds that buy digital currencies, and the most famous of these is the Grayscale Bitcoin Investment Trust, which trades under the name GBTC.
The success of this fund led Grayscale to launch four other cryptocurrency funds: Bitcoin Cash Investment Trust, Ethereum Investment Trust, Litecoin Investment Trust, and XRP Investment Trust.
Is it possible to profit from trading in digital currencies?
According to the previous mechanisms in which cryptocurrency trading and its methods were explained, the matter here is related to the digital currencies that you will conclude deals on, the extent of your correct expectations in those deals, and the timing of each transaction itself.
For example, the profit return that you will be able to achieve in the long term will be much higher than if you choose to trade in digital currencies in the short term.
In any case, it should be noted that digital currencies are among the most volatile investments, not only in the long run, but also in their price movements in the short term, so you must study this market well, and rely on concluding deliberate deals that enable you to profit from trading in it.
What are the risks of trading in digital currencies?
Not to mention the fluctuations in these currencies, but the sizing of the output from them may also constitute a risk factor in their circulation, as they will not make them widely available as regular currencies, and the fighting that these currencies are witnessing is from governments.
This may be witnessed in the future can eliminate its price value completely, if it is agreed not to count as a currency of payment, especially since it is a currency that cannot be regulated by the government.