Opening an account while trading CFD
I recommend that you first open a Bitcoin demo account and test the trading platform. The CFD brokers offer a completely free demo account with virtual credit. You trade without risk and only with play money. This imitates trading with real money.
Opening an account is very simple and quick. Enter your personal data and verify the account. The provider will ask you for further data and guide you through the account opening process.
- Select the bitcoin as your trading symbol
- Choose a suitable volume for your position (you can use leverage)
- A direct market execution or limit order is possible
- Protect your position with a stop loss
- Invest in rising or falling prices
How to hedge your positions in Bitcoin CFD
A stop loss and take profit can be set in the trading platform. These are price marks for a loss and a profit in exness cryptocurrency. The stop loss automatically closes your position at a certain price in the loss and the take profit closes your position at a certain price in the profit. These tools can be used for optimal risk management.
- The Stop Loss automatically closes your position at a loss
- The Take Profit automatically closes your position at a profit
The use of leverage in Bitcoin CFDs
Bitcoin CFD brokers offer trading with or without leverage. For example, the featured provider BDSwiss has a maximum leverage of 1:25 and at the provider eToro you can trade Bitcoin without leverage.
Using leverage allows you to open larger positions in the market. You need less capital in the form of margin for a trading position of $10,000.
Example calculation with leverage 1:50:
A trader loads €1000 into his account and wants to trade Bitcoin speculatively. The account is backed with a leverage of 1:50 for cryptocurrencies. A maximum position size of 50,000€ in Bitcoin would be possible (1000€ x 50 leverage = 50,000€). However, this would immediately end in a margin call and the broker would automatically stop you because the security deposit of 1000€ was immediately used up.
Intelligently, the trader wants to trade exactly one Bitcoin. The current price is currently 9000€ of one Bitcoin. He opens the position with a volume of 1.00. This is possible due to the high leverage of 1:50. A lower margin of only 180€ is required by the CFD broker (9000€ / 50 leverage = 180€).
In summary, the leverage allows you to open higher positions. However, the current price fluctuation of the high position will directly affect your account balance. If the price of 9000€ were to drop to 8000€ and the trader had bought. The leverage must therefore be used carefully and the trader should not open too large positions.
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