Hello steemit family, here is my homework post for profesor @kouba on CFDs.
WHAT ARE CRYPTOCURRENCY CONTRACT FOR DIFFERENCE (CDFs)?
Cryptocurrency Contracts For Difference is usually a contract between two parties which usually implies that one of the parties will pay for the difference between the current value of a crypto asset and its value at the time stipulated in that contract.
This type of contract is always being offered through online platforms. This cryptocurrency CFDs offer investors the chance to make speculations on how the price of cryptocurrencies like Bitcoin and Ethereum will change over a specified period of time.
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HOW DO I KNOW IF CFDs ARE SUITABLE FOR MY TRADING STRATEGIES?
For you to know if CFDs are suitable for your trading strategies, you need to understand how these Contracts For Difference works, what such Contracts entails and the risks involved in it.
When it comes to CFDs, you have to take a look at your trading objectives and compare it with at least those general features that CFDs always come with. You need to understand that the Volatility, Leverages, charges and funding costs involved in CDFs and then compare it with how you want to do your own crypto trading.
ARE CFDs RISKY FINANCIAL PRODUCTS?
CFDs are risky financial products, some things that makes it to be really risky include price volatility, the leverages, charges etc. The price volatility itself makes CFDs to be quite risky because cryptocurrencies and the CFDs linked to them are very vulnerable to instant changes due to activities in the market.
The leverages that some firms always offer is another risk factor, it can multiply your profit, but in that same way, it can also multiply your losses if it happens to be a loss and in some cases, you can loss more than your initial investment.
DO ALL BROKERS OFFER CRYPTOCURRENCY CFDs?
Well, brokers are known for always offering Cryptocurrency CFDs, but not all of them do that. This is where we see those brokers called Non-CFD brokers. An example of such is a US brokerage.
HOW TO TRADE WITH CRYPTOCURRENCY CFD ON ETORO PLATFORM
The first step is for you to visit their website
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The second step is for you to click on 'join now' and then supply all the needed information.
The the third step is for you to switch from real portfolio to virtual portfolio.
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Then lastly, start to copy trading as you are now start to trade with cryptocurrency CFDs just after these few steps.
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