The GKFX webinar series "The Trading Sessions" is devoted to crypto trading this week. On July 5, 2018 at 6 p.m. Philipp Pfitzenmaier explains the basics of crypto trading. In addition, he will compare crypto trading with classic forex trading. In the course of the webinar, Philipp Pfitzenmaier takes a closer look at cryptocurrencies and uses the methods of technical analysis. He will analyze trends, explain support and resistance levels and options for long and short positions.
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Bitcoins known since 2009
2009 mined the first bitcoins. Since then, more and more cryptocurrencies have emerged that continue to spread as a means of payment and speculation object. In the first few years, investors were primarily active in the crypto market who were willing to take risks and were not afraid of new things. For a long time, even experienced experts thought that cryptocurrencies were only a temporary trend, but cryptocurrencies became more and more attractive. Today, institutional investors are also facing investments in bitcoins. In addition, the first banks and financial companies have started trading cryptocurrencies and using the blockchain.
Trading in cryptocurrencies has become established
Especially trading in bitcoins has been very popular for several years. First, users exchanged bitcoins with one another in Internet forums and negotiated prices themselves. Over time, the first trading platforms and bitcoin exchanges emerged. In contrast, investors have been trading in euros, dollars or francs for a long time. As crypto prices went up significantly in 2017, crypto trading became more and more interesting for traders and private investors. Many of them wanted to participate in the unusually high return opportunities. After the highs at the end of 2017 , prices fell significantly in early 2018, which is just as normal for exchange rates as for share prices. For no value it is always uphill. CFD trading therefore offers traders the opportunity to bet on falling prices.
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Long-term investments via direct investment
Those who are more likely to long-term investments in cryptocurrencies interested in, a direct investment could be considered. With cryptocurrencies, it is widespread not only to trade them via a derivative, but also to buy them yourself. As a rule, dollars or euros are not bought directly and held in the long term, since the costs for this are comparatively high. In Forex trading, traders aim to leverage price fluctuations, which are often short-term. Traditional currencies are therefore often traded via CFDs.
Although short-term exchange rate fluctuations occur here, they are rather small compared to cryptocurrencies. The high volatility is one of the special features of cryptocurrencies. The euro or dollar is usually very constant over the long term. For this reason, investors generally do not achieve any return with long-term investments.
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Risks in CFD trading
A Direct investment in cryptocurrencies is associated with fewer risks than CFD trading, since no leverage is used here. There are only costs for using a trading platform or a crypto exchange. The purchased coins are then usually stored very cheaply in a wallet. This wallet is not required for CFD trading.
High price gains
Investors who invested in bitcoins early on were probably particularly pleased about the rapid price increase. In 2013 a Bitcoin was only worth around 30 euros; two years later 500 euros. Bitcoin and other cryptocurrencies have risen tremendously since the beginning of 2017. In mid-2017, a bitcoin cost almost 2,800 euros and by the end of the year, the courses were more than just 20,000 euros. Such increases in value are not known from well-known stocks or gold.
Price fluctuations as risk and opportunity
The greatest risk of cryptocurrencies is their high price fluctuations. Both the Bitcoin rate and the rates of other cryptocurrencies can change several times a day. High profits are possible as well as high losses. CFD trading can therefore result in a margin call. Since the obligation to make additional payments to CFDs was prohibited some time ago, the position is automatically closed by the broker in this case. If this were not the case, the losses would exceed the capital on the trading account.
Forex markets short-term volatile
In established Forex markets, short-term volatility may occur, in the long term, however, they are usually quite constant. However, how the prices of cryptocurrencies will develop in the future is completely unclear. Since cryptocurrencies have been on the market, there have been repeated increases and decreases. Some experts believe that the Bitcoin price could soon crack the 50,000 euro market, while others still warn of total losses.
So far there is no uniform international regulation for cryptocurrencies. However, sensible, prudent regulation that does not slow down technical innovations could lead to market stability. The regulations in countries such as Japan, the USA or Germany are sometimes very different. Central banks have no influence on cryptocurrencies.
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Watch messages related to cryptocurrencies
In addition, there are reports of hacker attacks on crypto exchanges and security gaps lead to uncertainty. For this reason in particular institutional investors have little confidence in cryptocurrencies. Regulated brokers who are licensed by the national financial regulators are a sensible alternative to crypto exchanges.
Central banks have an impact on currencies from all over the world. For example, if the Fed changes interest rates in the United States, this will also affect the dollar. With cryptocurrencies you should have messages about cryptocurrencies on your screen. For example, if a well-known bank decides to work with cryptocurrencies, this could result in higher prices.
Keeping an eye on the prices of other cryptocurrencies
News from Asia and the United States play an important role here USA, where there are particularly important crypto markets. For example, if you trade bitcoins, you should also keep an eye on messages and rates from other cryptocurrencies, as the rates of the individual cryptocurrencies are often very closely linked. If the Bitcoin price falls, it can also go down for Litecoin, for example.
The fundamental analysis can thus make some statements about the further development of cryptocurrencies. This also includes the aspect that increasing recognition as a means of payment is important for cryptocurrencies. In addition, many traders rely on the technical analysis to get indications of trends from historical price movements.
Numerous cryptocurrencies on the market
Currently are almost 2,000 cryptocurrencies Represented market. Not all of them will assert themselves permanently. Bitcoin, Ethereum and Litecoin are very well known, but many traders also trade with Ripple and Dash. Before you start trading crypto, you should familiarize yourself with the cryptocurrency of your choice.
Litecoin is the second oldest cryptocurrency and is based on technology similar to Bitcoins. Ethereum provides its technical advantages especially in the foreground. So-called smart contracts can also be established via the blockchain, which have also attracted the interest of some well-known companies.
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Ripple and Dash are becoming increasingly popular
Ripple is known not only as a means of payment, but also as a marketplace for goods and services. XRP is the internal currency of the marketplace. Ripple also wants to establish a trading center for currencies, which also includes numerous other crypto and fiat currencies are recognized. Companies from the established banking system are also interested in Ripple, which repeatedly leads to criticism. In addition, all coins have already been produced by Ripple Labs, the company behind the cryptocurrency, so that users cannot participate in the production of new coins. Dash, on the other hand, is a cryptocurrency that focuses on anonymity and data protection. For example, users are involved in a question of the distribution of funds through a democratic internal system.
Cryptocurrencies at GKFX for almost a year
Since November 2017, GKFX has been trading in cryptocurrencies possible. The provider quotes cryptocurrencies against euros or dollars. When you buy bitcoins, you sell dollars or euros at the same time. If a trader goes long and prices rise, he receives a profit, and if prices fall, he has to accept a loss. When trading crypto with a broker, traders can also take a short position. This is not possible with a direct purchase of a cryptocurrency. In addition to bitcoins, traders at GKFX can also trade with Ethereum, Litecoin, Dash or Ripple. As with other trading instruments, trading can start from 0.1 lot. The maximum position size varies depending on the underlying. This also applies to the spreads.
Numerous tools available
GKFX offers numerous tools in crypto trading that support traders in trading. Trading takes place via the trading platform Sirix or MetaTrader. For crypto trading, you can choose the account types FIX, Variable or VIP at GKFX. Traders can suffer a maximum of losses equal to their account balance. In order to be able to use a lever in crypto trading, a security deposit of 50 percent must be deposited.
Conclusion: Current webinar on crypto trading at GKFX
For traders who are interested in crypto trading, this could be current webinar from GKFX will be interesting. In "The Trading Sessions: Fundamentals of Crypto Trading", Philipp Pfitzenmaier will compare crypto trading with forex trading on July 5, 2018 at 6 p.m. He also takes a closer look at trading cryptocurrencies using methods from technical analysis.
Trading in cryptocurrencies has become increasingly established since the advent of bitcoins in early 2009. They can be bought and sold on crypto exchanges and trading platforms, while brokers offer CFD trading in cryptocurrencies as an underlying. This has been possible at GKFX since November last year. Litcoin, Ethereum, Dash and Ripple can also be selected as an underlying.
Traders especially want to use the volatility of cryptocurrencies. There is always volatility in forex trading, but currencies like the dollar tend to develop more consistently in the long run. Such increases in value, as we saw last year for cryptocurrencies, are rather unusual on the international financial markets.
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