Trade Bitcoins Online: A Profitable Trader’s Favorite

Trade Bitcoins Online: A Profitable Trader’s Favorite

What is CFD trading?

When you trade bitcoins online, you “bet” that the Bitcoin (BTC)  price will rise. So you would buy 1000 Bitcoin (BTC) share CFDs to show that position in the market. Now, if the price of Bitcoin (BTC)  increases over the spread you will make a proportional profit however if it decreases, you would make a proportional loss.

However, these platforms don’t have any real-world market access, which means you won’t actually own Bitcoins (BTC), you’ll be betting on the possibility that the price rises. That means you can’t technically sell Bitcoins CFDs that you buy on the website for much other than selling it later on unlike bitcoins.

Margin Trading

With margin trading, you can trade bitcoins online on a loan from your broker. You need to put in around 50% of the trade, the rest of it is paid by the broker. In the case of CFD trading, this ‘broker’ would be the platform itself.

It will allow you to trade bitcoins online on the margin that you normally wouldn’t be able to. So the profit would be all yours, minus the capital that was borrowed. Therefore, it’s pretty useful to trade on margin since you can make higher trades.

Be aware that if you do trade bitcoins online on margin and the trade makes a loss, you can use all of your initial investment. So make sure to read a lot about the currencies you want to invest in. Only margin trade after having accumulated a lot of experience.

One great way to practice your skills at margin trading is to open a free demo account.

 

Low Spread

On CFD platforms, the profit or loss are calculated by determining the difference between the opening and closing trade. Let’s imagine you trade bitcoins online and estimate that the price of bitcoin will go down. Thus, you will buy 1000 share CFDs of bitcoin to show that position in the market.

The difference between opening and closing trades is your profit for each trade. Imagine the market price of bitcoins actually decreases but only by $0.5. You will not receive any profits since that’s the minimum spread that the price must cover.

On more popular CFD trading websites, the spread is pretty low therefore you can make profits from small variations in bitcoin prices. This spread is paid to the company, it’s the only way through which some of the platforms earn money.

Some platforms have little to no spreads on cryptocurrencies due to the volatility. This is because they keep lowering spreads for competitiveness. So, if you want to make a lot of profits on these platforms, you can rest assured that the company won’t charge you exorbitant fees.

 

eToro: Trade Bitcoins Online Now!

The eToro website is quite a new and innovative idea; to mix the community of a social network to the complexity of eToro bitcoins CFD trading. This mix allows very basic users to master the platform with the help of the education programs available on the website.

eToro is based on several interesting ideas. For example, if you have many followers who copy your trade, you can receive money from the website. In my opinion, the website’s user traffic of 5 million shows that it’s a trustworthy website and has good potential to grow in the future.

 

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About Article Author

Michael Serrano
Michael Serrano

Michael is an engineer and a bitcoin evangelist. He has been involved in cryptocurrencies since 2013. His biggest wish? 1 billion users of bitcoin, ether and litecoin by 2020. In the last 10 years he has worked for various early-stage start-up as a back-end developer.

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