Crypto Academy Week 10 - Homework Post for @kouba

Hi!professor thank you for the class and for giving out the homework task for this week.

This is the submission of my homework task.

What is CDF
The CFD (Contract for Difference) is a derivative financial instrument that can act as a contract between a trader and a broker. For cryptocurrency CFDs, traders do not use digital currencies. Instead, it tries to take advantage of price changes and predict whether the value of the selected cryptocurrency will rise or fall. An accurate prediction will save you money. If his prediction is wrong, he will have to compensate for the losses that come with it. Profit and loss is the amount of change in the value of the asset multiplied by the amount, and a small portion is paid to the broker as a service commission.
One of the main differences between cryptocurrency trading and CFD trading in cryptocurrencies is the ability to leverage CFDs. The potential benefits of leverage are obvious, as traders can trade multiple cryptocurrencies of their choice in exchange for direct purchases. However, it should also be noted that, as leverage increases, potential losses can also increase.

There are other advantages of crypto CFDs. All major cryptocurrencies, including Bitcoin and Ethereum, are volatile, and for some people these fluctuations are difficult to handle in daytime transactions. CFDs give you more flexibility in trading, with the ability to enter and exit quickly, use stop-loss orders, and develop hedging strategies. This is where traders can gain an advantage as the access and flexibility of CFDs and the different interest rates and interest rates of the US dollar or other cryptocurrencies provide a way to protect and limit. excessive market risk.

How do I know if cryptocurrency CFDs are suitable for my trading strategy?

Before you start trading cryptocurrency CFDs, you should do research and conduct some kind of research. In order to find out whether cryptocurrency CFDs are suitable for your trading strategy, you must consider the following points.
-Cryptocurrency trading is extremely risky and venture capital must be used in trading.
-CFD trading is suitable for short term trading.
-you should always invest money that you can afford to lose. Cryptocurrency is a very volatile market, and traders may lose all their funds.
-If the trader's capital is insufficient, he wants to use leverage trading. Cryptocurrency is expensive and not everyone can buy it. Therefore, CFDs are easy to trade for users with very little money.
-Training is conducted in the safe environment of a certified broker.
-These transactions require an adequate understanding of margin trading and leverage.

Are CFDs risky financial products?

As we all know that CFDs are risky financial products. As well, cryptocurrency is inherently liquid and can move quickly in any direction (short term or long term). If the market goes against the price expectations of the traders in this way, then the traders will suffer a huge loss. Since margins and leverage are part of CFD trading, they add risk. It is very important to understand this commodity well, otherwise it will result in high risk and the trader as a whole can lose your money. As a result, every brokerage site has a warning on the home page indicating that the risk of trading is high. It may not be for everyone. Therefore, it can be said that exchanging CFDs with cryptocurrencies is extremely risky and only the investor should invest.

Do all brokers offer cryptocurrency CFDs?

The answer is: not all brokers provide cryptocurrency CFDs, only some brokers offer cryptocurrency CFDs. I have provided a list of brokers who serve traders. These are listed below and they are the best brokers offering cryptocurrency CFDs.
XBTFX
Etoro
Bitcoin
Tiomacte

Explain how you can trade with cryptocurrency CFDs on one of the brokers (Using a demo account) .

Thank you so much for reading through sir.