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Cryptocurrency Trading

Cryptocurrency Trading

What is cryptocurrency trading and how does it work?

Cryptocurrency trading is the act with making transactions on a cryptocurrency price movements trough a CFD trading account or through stock exchange.

CFD trading in cryptocurrencies

CFD trading helps you to make transactions on cryptocurrency price movement without taking ownership of coins. If you think that a cryptocurrency price will go up, you can buy (long) or the other way, you can sell (short).

This is a system that use leverage, meaning you only need small deposit in order to make transactions with full volume. Your profit or loss calculated with this large amount, so leverage increases both profit and loss.

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How do cryptocurrency markets work?

Cryptocurrency markets are decentralized. Central authorities like government do not issue them. Instead they run on a computer network and can be traded through stock exchange markets or be kept in digital wallets.

Cryptocurrencies stored on a block chain and are presented only on as a shared digital record of ownership unlike traditional currencies. When a user wants to send cryptocurrency to another, it will be sent to the digital wallet of the user. Until it is verified and added to then block chain with mining process, transaction will not be final. The new cryptocurrency tokens are made with the same process.

How do cryptocurrency markets work?

A block chain is a digital record of the shared digital data. This is a transaction history of a cryptocurrency which shows how has the ownership changed over time. Block chain works by recording transactions in 'blocks' with new blocks added to the front of the chain.

Cryptocurrency mining is the process in which recent cryptocurrency transactions are controlled and new blocks are added to the block chain.

The difference between the bid and ask prices for a cryptocurrency is spread. When you open a position in market you will be offered with two prices. If you want to open a long position, you make transaction at a slightly above market price. In the short position, you make transaction at a slightly below market price.

Leverage offers you to trade with large amount of cryptocurrency without having to pay the exact value of your trade. Instead you invest a small deposit called margin. When you close a leveraged position, your profit or loss depends on the exact size of the trade.

Margin is a term used to describe the initial deposit you make to open leveraged position. your margin requirement will change depending on you broker or your trading volume, when trading cryptocurrencies on margin.