Bitcoin Online Trading | Your Questions Answered
What is the best way to trade Bitcoin Online?
Bitcoin Online Trading is a new activity that most of the Forex Brokers and exchanges started to offer in the last year and even more so in the last couple of months. This makes it harder for Traders to figure out which forex Broker or exchange they should use for trading this crypto-currency. The differences are in general in the following topics
Spreads: Some brokers take fixed spread where are go for the variable spreads which means you will know how much it will cost you at the moment you open an position.
There are also Brokers that take Simply a % of the Trading volume but they will in general show you how much your trade will cost you in spread at the time of opening your positions.
Leverage: thou many consider Bitcoin to be a currency it has been and will be treated by the forex brokers more as a CFD, this also means that the leverage will be lower than trading currencies. I have to as yet see a broker that offers trading cryptocurrencies 1:200.
Most of the brokers are offering the leverage to be between 0 and 1:20. I would suggest especially in the beginning to trade with brokers that offer low leverage as your risks will be lower.
Trading Platform: Bitcoin Online Trading can be done on several different trading Platforms. Metatrader 4 or MT4 as most people are calling it will be the most common as this trading platform is the main trading platform of most brokers. But some brokers with proprietary Trading platform (Belongs to the broker) offer Bitcoin Online Trading on those platforms.
And then there is the options of Copy Trading and social Trading as offered by Etoro. This trading format is the perfect form of trading or investing when you are new to trading and want to start and learn in a controlled way with real money or full functional demo account.
How does Bitcoin CFDs trading actually work?
Bitcoin Trading a CFD is trading on the price of Bitcoin at the time of purchase or in your case opening a trade. Then it becomes simply what the rate of the Bitcoin will do. This means that When the Bitcoin price rises, so does the value of your buy position on Bitcoin. Keep in mind that also means for the reverse and if you bought Bitcoin, but the price drops you will lose money in the process as the value of the Bitcoins you bought (you do not actually buy them, just trade on the rate) decreases.
At any time, you have the choice to close your positions in order to take the profit or avoid further losses. This is exactly the same as with any currency trading. You always will have these choices, you can hedge your positions or keep riding the wave of fortune if you bought Bitcoin and the price keeps rising.
How and where can I best learn to trade Bitcoin?
The answer to this question is the reason of this site. Since there are many brokers that offer bitcoin online trading but not every broker is created equal it makes sense to narrow it down for you to the best Brokers to trade and teach you how to trade.
In this Etoro takes a unique position due to their trading platform which is a social Trading platform allowing you to engage other traders and pick their brains for tips while learning how to trade with their educational tools. This is partly the reason why we consider them to be the Best Forex Broker for trading Bitcoin and other crypto currencies.
Find the right Demo Trading account to trade Bitcoin You have to make sure that the demo grading account which you are opening, and which allows you to trade but not with real money is as accurate as the real thing.
It is also important that you are able to trade for some extended period of time and not just for a few weeks if you feel you need to have more time before committing money to trading.
Available Funds for Trading Bitcoin in demo account
It is also important that in the demo account you have enough play money so to speak to actually make the trades and practice, if after 3 trades your account would be empty it would not serve you as it should. Make sure you get enough funds (etoro for example gives you $100,000 virtual Money to Practice Trading). Good Luck
Why Trade Bitcoin with a Regulated Forex Broker ?
This is a good question, since now also many of the Cryptocurrency Exchanges are offering Trading in the crypto currencies they are supporting why not also trade there.
If you think about it, you buy bitcoins dash, ripple or Ethereum. have them in your wallet and then later you sell them again the moment the price is where you wanted them.
This is not trading as I mean, this is investing.!
So trading you actually do not own any of the coins that you are trading. The same format works for the forex industry as a whole. You do not actually buy the currencies, you trade or speculate on the value of the Coin and according to that you are able to Earn money or lose money.
Advantage for Forex Brokers working as a Bitcoin Broker
So what would be the advantages of Trading cryptocurrencies with a forex Broker instead of an Exchange like Coinbase or cex.io ?
There are several advantages that a forex broker offers or possesses over an exchange:
One of the most important advantages is actually experience. Most of the brokers, at least the brokers we have here on Bitcoin Broker Review, have been in the business for at least 5 years, most of than even more than 10 Years, they have seen I all and lived through it all. They know what it takes to run a broker and provide their clients with the trading tools and services that a trader requires.
Regulations is important for the simple fact that you should see it as an insurance for you. The crypto currencies are not regulated, this is the appeal to these currencies to begin with. This does not matter for the broker, the broker is regulated towards you, regardless if the instruments are under regulations or any government entity.
this means that if the broker would go belly up for some reason you will have claim to a compensation as is set under the regulations, this is in most of Europe around $25,000 and in the UK this double. You are insured where with an exchange this is not the case
Where you are trading ,m the charts , the tools and how fast the trading platform is are all important aspects for the right trading experience. There are many platforms out there but one of the most used and popular is still the Metatrader 4. There are of course other solutions like the Openbook of Etoro which is a social trading platform. The Platform should be run by a company that knows what it is doing, a forex broker this is their bread and butter. This is what they know.
Most of the forex brokers has had it fair share of angry customers as there are enough traders that during trading make a mistake and rather blame the broker then actually take responsibility. But there are also even more Brokers that don’t take it serious when it comes to customer service and many are scam Brokers. that is why our list at Bitcoin Broker Review only have the best brokers in the industry. All these brokers stood the test of time and are known as trustworthy brokers.
It is important to point out that Trading in crypto currencies is still very new, and as such even the brokers do not know yet what this means when it comes to profits and losses for them. You want to deal with a company that has the financial backing and deep pockets to be able to turn over the profits if you were so lucky or skilled. These are in general then not the new company not start-ups that opened an exchange.
If you look to invest and simply buy an amount of for example Bitcoin or dash, then the exchange is the place to be. This is simply the market place for the cryptocurrency.
But if you plan to trade and day-trade on any cryptocurrency , the Forex brokers are the only true option , they have the experience, regulation , support, tools and finances to offer this service in the right and legal Manner.