Crypto Academy Week 10 - Homework Post for @kouba01

Hello my friends welcome to another homework post which is on CFDs given by our new professor @kouba01 who explain all about it in his lectures so if you want to read the lecture visit here

In this homework there are questions i am going to be answering 1 by 1 starting from the first one so without wasting your time let's begin.

Questions and Answers

1). What is a cryptocurrency CFD?

First of all crypto currency stands for digital currencies while CFDs stands for Contacts for differences, CDFs are agreement where someone must not be the owner of that asset to trade with that asset on whether the price of that asset will increase or decrease.

Cryptocurrency CFD is an understanding in which the cost of a cryptocurrency is exchanged depending on whether it can rise or drop.

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

If i possess the following features then CFDs are suitable for my trading strategy and those features are.

• The price of cryptocurrency can go up and down anytime so if you loose you have to accept it.

• If you have low capital you can make more from margin and leverage trading

• If you don't know how to predict charts don't do CFDs

• You must know what a long and short position means.

3). Are CFDs risky financial products?

Obviously CFD is risky, because it uses margin and leverage that will make it more riskier. It works with leverage so it even makes it more risky because if the price fall below your position you can get liquidated that is why CFDs are very risky.

4). Do all brokers offer cryptocurrency CFDs

I have a list of brokers who offer CFDs because it is not all brokers who offer CFDs, listed below are the Two Brokers who offer CFDs.

1). XTB
This platform offer CFDs, it also has one of the best brokers for cryptocurrency. It deals with LTC, XRP, Bitcoin,Dash and Ethereum.

2). eToro
This is known as one of the best cryptocurrency broker it also has a regulatory body and they are CYSEC and ACIS.

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

I am going to be explain process by process how you can trade crypto currencies with one of the broker listed above and it is eToro demo accoun also known as virtual portfolio.

• Create and log into your eToro Account.
• Then click an icon located top left to open a slide menu

• You will see a button that when you click it slides down and it has real and virtual, click virtual as shown below.

• Now you are in your demo account you can now practice trading which you can do by locating a crypto you want to buy and then press trade like in the below picture.

• After you click trade then you will see a box which you have to fill the amount of coins you want to buy and always calculate before you trade so that you don't buy with all your money unless that is your actual plan.

• After you have confirm everything you can now open trade.

Conclusion
Cryptocurrency CFDs are appropriate to those who have less capital want need to make more benefit in a brief time. But you've got to be very cautious in using leverage here otherwise you can lose a lot. Too ought to have a point by point idea about the cryptocurrency market.

Thanks for reading and i am @okoyeclinton400