Trading CFDs on cryptocurrencies and commodities

trading cfds

Traders can trade CFDs on several asset classes and some of them include cryptocurrencies and commodities. Trading each asset class requires knowing your asset and how to trade it.

Cryptocurrencies

What are cryptocurrencies?

Cryptocurrencies are digital currencies secured by encryption techniques which makes them less prone to counterfeiting. Most cryptocurrencies are decentralized networks built on blockchain technology which means that the network is spread across a large number of computers. This and the fact that they are not issued by any central authority, makes them theoretically free from government control and manipulation.

Bitcoin, Ethereum, Litecoin, Bitcoin Cash and Ripple are some of the most important cryptocurrencies. Traders Trust allows you to trade CFDs on all of these cryptocurrencies.

What is CFD?

A CFD is a contract which allows you to speculate on the falling or rising price of the underlying asset. In the contract, you agree to exchange the difference in price between the time you open the trade and the time you close it.

Therefore, if you think the price of an asset will go up, you open a long position. If your forecast is true, you make profit, but if the price goes down you have a loss.

If you think the price of an asset will decrease, you open a short position. If the price falls you make profit but if the price rises you have a loss.

How to Trade Cryptocurrencies

Before you start trading the digital assets, it’s essential that you follow some necessary steps:

  1. Study Cryptocurrencies: Learn how the digital coins work and study the market.
  2. Open an Account: Open an account with Traders Trust to start trading with excellent trading conditions.
  3. Prepare your Trading Plan: The cryptocurrency market is highly volatile so ensure you have a solid trading plan and good risk management in place.
  4. Trade your Preferred Asset: Trade CFDs on the cryptocurrencies you believe will have a change in price.

When to Trade

The cryptocurrency market is open 24 hours a day, 7 days a week. Cryptos are traded across different time zones all around the world so there is no optimum time to trade the assets as prices changes can occur at any time.

What moves the prices of Cryptocurrencies

There are a number of factors that affect the prices of cryptocurrencies:

  • Supply: The number of available coins, and the number of newly released, destroyed or lost coins can cause prices to either fall or rise.
  • Integration: Follow to what extend cryptocurrencies are integrated into mainstream business infrastructure.
  • Fiat Currencies Crises: When the economy struggles, investors could turn to cryptos.
  • Press Portrayal:  Pay attention to the way cryptocurrencies are presented in the media and to what extend the topic is covered.
  • Crypto Related News: Updates in regulations or security attacks can drive the prices up or down.

Commodities

What are commodities?

Commodities are hard assets (assets that you can touch) and some examples include gold, silver and oil. A commodity market is place where commodities are bought, sold or traded.

How to Trade Commodities

One of the ways you can trade commodities is by trading CFDs on your preferred asset. As previously mentioned, a CFD is a contract which allows you to speculate on the falling or rising price of the underlying asset. In the contract, you agree to exchange the difference in price between the time you open the trade and the time you close it.

With Traders Trust, you can trade CFDS on gold, silver, US Crude Oil and UK Brent Oil.

  1. Study Commodities Trading: Read books, attend seminars or watch webinars to expand your knowledge.
  2. Open an account: Open an account with Traders Trust to start trading with excellent trading conditions.
  3. Prepare your trading plan: Commodity trading trends to be more high-risk so make sure you have a well-studied trading plan and good risk management in place.
  4. Trade your preferred asset: Trade CFDs on any commodity you believe will display fluctuation.

What moves the prices of Commodities

Gold: The price of gold is affected by demand for the yellow metal, the amount of gold in the central bank reserves, the value of the US dollar, inflation, currency devaluation and the global sociopolitical situation.

Silver: The price of silver is affected by supply and demand, economic and political uncertainty, the value of the US dollar, industrial use, and the mining of other metals as silver is usually found combined with other substances.

Oil: The price of oil is affected by supply and demand, economic growth, reports on production levels, target pricing and investment levels.

Follow the blog for the next educational article that could help you upgrade your trading. Trading requires hard work, studying the markets and a broker that you can rely on. Traders Trust has been supporting its traders with trading conditions that really make a difference for more than a decade now.