Ultimate Guide to Trading Litecoin CFD

Ultimate Guide to Trading Litecoin CFD

What is a Litecoin and a Litecoin CFD?

Litecoin is interesting since it’s sort of an advancement to Bitcoin. The currency has a much higher eventual supply which solves the issue of scarcity that Bitcoin may have in the future. Thus, it’s a great option to trade since it most probably will increase in value over time.

Furthermore, there are many advantages to using Litecoin. The average block time is also 2.5 minutes, four times faster than Bitcoin. That means that transactions can happen much faster than Bitcoin and it can handle more transactions. It was really made to be one of the currencies which will be used when cryptos become much more mainstream.

Litecoin is an interesting cryptocurrency to trade since it’s very volatile. Before January, it was worth about $3 per coin. This dramatic increase in value is easy to justify why Litecoin is great for cryptocurrency trading. If you buy Litecoin and then trade, it can be very profitable in the short run.

That’s an added advantage which I think can affect the price of Litecoin in the future.

The best thing to do is to buy Litecoin from a platform like Plus500, and then trade them throughout the day. Essentially, the term is called CFD trading. On Plus500, you can trade Litecoin CFD. This method does take up much more time, however, the short term profitability is worth putting in the time.

CFD trading is essentially a market of speculation. You purchase CFDs which represent a specific commodity. In this case, you would trade a Litecoin CFD. You purchase a Litecoin CFD, which is representative of the asset and has the price of the asset. Thus, you can either go long or short on the Litecoin CFD to make a profit. Usually, traders prefer to short Litecoin CFD because of the high volatility.

Where to Trade Litecoin CFDs?

Plus500 is a leading CFD trading platform for instruments such as commodities, stock and market indices. It offers some high standard features that professional traders might use for everybody. Since a CFD can be volatile and cause losses, Plus500 provides risk management tools to increase the safety of your funds.

The tools can help you make sure that your loss isn’t excessive. Let’s take an example of a short which didn’t go well. When you short an asset, you “sell” it to buy it later on. You can make a profit from that exchange if the price of the asset decreases during this time. Let’s say that it doesn’t and the price starts to increase. Now, you will be entering a loss. However, you can set a stop loss which will prevent any more losses above a specific loss that you set. This helps if you cannot monitor your trades every minute of the day.

A great feature on Plus500 is that it displays most of the world’s financial instruments market prices on the website in real time. So, you can monitor your favourite commodities and allows for better monitoring of the profits or losses that you make.

Apart from Litecoin CFD, it provides both Ethereum CFD and Ripple CFD trading on its platform. Thus, for anybody interested in CFD trading and cryptos, you have a large base of choice to trade.

Plus500’s free account also offers a demo version of CFD trading. This is pretty interesting because Plus500 gives you $100,000 in virtual money to trade bitcoin. You can start practising on the Plus500 demo version and then choose if you want to invest or not. I think it’s better for beginners to open a demo account first and then deposit their capital.

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About Article Author

Martina Kelowsky
Martina Kelowsky

Currently working on her Master Degree in Economics & Computer Science she lives in Russia. She is a Bitcoin Enthusiast since 2013 and Investor in various ICO since 2014. She aims to democratize a future where money is decentralized and transaction anonymous.

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