3 Reasons Why You Should Use a Broker To Buy Cryptocurrency
This strategy saves a lot of screen-watching, stress, and trading fees. Day trading lets you profit from Bitcoin without having to understand its technical complexities nor hold a long-term position in a new form of money, which is still Maxitrade scummers considered experimental. Trading View allows you to create an account where you can save your charts. There is also a social aspect. You can join the Bitcoin trading group chat on trading view to share your views and charts with others.
Considering the notoriously high volatility of the cryptocurrency market, they may come in handy and protect you from devastating losses. At the same time, advanced charting tools and analytical support offered by brokers help to make informed investment decisions and improve your overall performance. Direct cryptocurrency trading is often associated with technical issues. People who are not tech-savvy are sometimes scared by wallet opening procedures, a verification process on a cryptocurrency exchange and other crypto-related nuances.
These differences can be thought of as trade-offs, and whether they are better or worse depends on your needs as an investor or trader. For example, some brokers do not permit weekend trading of their cryptocurrency CFD contracts. The top cryptocurrencies for traders are generally the ones with the highest market cap.
In some other cases they have faced regulatory scrutiny for operating without a license, and/or potential AML/KYC violations. The ForexBrokers.com annual forex broker review (three years running) is the most cited in the industry. With over 60,000 words of research across the site, we spend hundreds of hours testing forex brokers each year. How we test.
Meanwhile, cryptocurrency transaction on blockchain may take hours and even days, depending on the coin and the network capacity, which means that traders won’t be able to benefit from rapid market changes. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs.
Proper licensing will need to be obtained in all jurisdictions in which the company plans to operate. In many places, cryptocurrency exchanges operate without significant oversight, as government and regulation have not yet caught up with technology, while in other places including the US, Bitcoin operators must be licensed Money Transmitter businesses and must follow SEC and CFTC rules and regulations among others. Proper legal counsel is a must. It is typical that exchanges, because they fall into the currency exchange umbrella, must adhere to Know Your Customer (KYC) regulations, which have become more and more prevalent to combat money laundering.
Additionally, high volumes aren’t a guarantee that a cryptocurrency exchange is entirely reliable. OKEx follows Binance with a 24-hour trading volume of just over $1 billion. Like Binance, Bitcoin is the most widely traded digital currency on this exchange as well with almost 30% of the overall volumes. The next most traded platform on OKEx is EOS, opening up an opportunity for users looking to trade this coin.
With Globalblock, Cryptocurrencies can be bought directly in pounds sterling, saving on any FX conversion fees. Trading directly with Crypto exchanges requires customers to deposit in USD, therefore costing UK customers a hidden exchange fee of circa 2%. With CFD trading, you are trying to trade in the direction of market fluctuation in order to profit from the difference of the price of the asset when you entered the trade and when you exited the trade.
Best Overall: Crypto Rocket
- This isn’t just for Bitcoin MT4 trading, it applies for trading Bitcoin in general.
- For cryptocurrency trades below AU$50,000, there’s no real benefit.
- CFD crypto trading comes with a price in the form of a spread, which represents the difference between the buying and selling prices.
- Some traders will support whichever direction favours their pocketbook as if cheering their favourite sport team.
When choosing a broker, it is vital to understand that CFD trading is based on a contractual type of relation between the trading company and its client, rather than a buy-and-sell type of transaction. It means that your profit or loss depends solely on the prices registered at the start and the end of the trade. So, make sure that your broker uses reliable trading data and doesn’t manipulate prices. Otherwise, you will never be able to benefit from cryptocurrency price movements, no matter how good and precise your forecasts are. It is a challenging issue as currently there is no official source for cryptocurrency quotes, while prices at different exchanges may differ considerably.
When trading cryptocurrencies by using contracts for difference (CFDs), the trader is simply speculating on the price movements. They do not actually buy or sell the crypto asset itself, but rather a contract on the price of the crypto asset.
This expense should be monitored especially by traders who want to hold on to their cryptocurrencies for a while. We will again scan the overnight fee for Bitcoin only, but you can find how big this fee is for specific altcoins on the trading platform of the broker or on a page dedicated to broker’s fees. How much do you plan to trade with? Does your crypto broker offer to trade with a small starting capital? If not, is it an obstacle for you?
IQ Option is a Cyprus based trading platform that is regulated by Cysec. Cysec is a trusted body when it comes to the regulation of cryptocurrency trading, https://maxitrade.plus and all other types of online trading. IQ option has grown over the last decade to become one of the largest cryptocurrency trading brokers.
Lopsided markets allowed traders to make quite a few quick bucks leaving brokers deep in red and forcing them to suspend their crypto offerings or limit exposure by preventing new positions from being opened. In December 2017 some CFD brokers started to reduce their exposure to cryptocurrencies due to high risks of Black swan events and tiny hedging opportunities via CBOE and CME futures. For all its benefits and value-adds, CFDs for cryptocurrencies has some drawbacks and pitfalls, worth considering before putting your money in it.
Cryptocurrency is the most volatile asset class of our time. It’s not uncommon to see price swings 50%+ in any direction within a given day. The volatility is largely due to the highly speculative market of cryptocurrencies. As well, cryptocurrencies do not follow any regulatory oversight, have thin order books, lack institutional capital, and currently have no intrinsic value.
The agent and owner of financial operations are Max Capital Limited F20. It consists a team of financial market professionals assembled specifically in order to provide the best possible trading conditions to its customers. Our specialists have been involved in the development of technical specification for designing an up-to-date platform that is suitable for both beginners and experienced traders.