As cryptocurrency market grows, more and more regular users are attending the idea to invest in this kind of transaction. This reality has been proved in the growth of the most popular coins that are exponentially increasing their demand. Nevertheless, this market is quite complicated and for starters can represent a lot of money lost if they don’t act cautiously. In that matter, Ethereum is precisely one of the most difficult to trade thanks to the way its platform works and that’s why sometimes it is recommended to start trading Ethereum with CFD.
What is CFD?
CFD is a financial product “contract for difference” where two parties agree to exchange the difference between an opening and closing price of an asset. In a few words, it is like lending your capital to someone who’s experienced in the market so they invest according to their knowledge and then collecting the difference.
Of course, this represents a risk of loss if the price of the investments is lower at the end than it was at the beginning but it’s a controlled risk if we select wisely our CFD broker. Besides, opportunities are bigger because no matter the time you have or the disposition, your CFD will be trading 24/7 so you might make money even while you sleep.
Advantages of trading Ethereum with CFD
- Liquidity: you will always be able to sell you Ethereum coins, which is quite harder if you’re an independent trader.
- Diversified investments: most CFD have variable investment modes like “stop loss” or “Take profit” that automatically close transaction when they reach a number of Ethers or a “Short selling position” that bets on the descend of the price.
- Safety: CFD is quite stablished and has security protocols that have proved to work so your money will be as protected as it can be.
How to Trade Ethereum with CFD
The first thing you have to do is select the CFD that suits you, eToro, Plus5000 are good options when it comes to this kind of trading. Most CFDs have a really friendly system to register and start trading.
Once you’ve selected your CFD, registering on the website would be the next move. Subscription regularly implies some verification like phone number and some documents or a verification code they send to your mail.
Once you’ve registered, trading Ethereum with CFD is quite easy and ascertainable since this kind of websites counts with a series of tools and charts that give complete information on the transactions that have been made.
Selecting the currency you can determine that asset you will exchange which in this case would be Ethereum/USD. After that, you will be given a chart with the register of the cryptocurrency flow so you can analyze, study and decide where your bet will be put. It’s basically predicting if the price will rise or will fall and put your investments in that behavior.