Thanks to today's high-speed internet and mobile technology, online trading is fast becoming the preferred investment option for people looking to expand their financial horizons. 2020 has been a volatile year for stocks, oil, and even gold, but cryptocurrency traders have seen a steady rise throughout the year.
Prices are rising again and for traders this can be an incredible opportunity to go short. Read on to see how to trade crypto for the short or long term and take advantage of today's crypto prices, no matter what budget you have. Follow the steps below and you could open your first trade today.
Is Crypto Still a Profitable Investment?
The granddaddy of all cryptocurrencies is BTC (Bitcoin), and it might surprise you to learn that it has been a tradable asset for over a decade. In fact, if you had bought $ 100 worth of Bitcoin in 2010, that investment would now be worth more than $ 600,000.
Of course those days are behind us and prices are comparatively stable today. So can you still make money with BTC? The short answer is yes, but more as a trader than as an investor. Investors put money in a company or asset with expectations of growth. Traders enter and exit markets when prices are favorable. Instead of spending 16K on one coin and trying to earn a couple hundred dollars on the upside, you could consider another way that doesn't require a large amount of funding and offers both up and down opportunities.
Leveraged cryptocurrency trading
Trading is about buying when it is low and selling when it is high. Like most assets, cryptocurrency price movements come in waves. Let's stick with BTC for a recent example. In early 2020, we saw the price of Bitcoin drop below $ 5,000 and then climb to more than $ 17,000. Any trader will tell you that a triple price is something to dream about. That means a $ 100 investment contract would have increased in value to $ 340. It's not exactly life changing. Fortunately, brokers provide a way to multiply that return with something called leverage.
Exness offers leverage of up to 1: 2000. This is how leverage changes everything. All traders who invested $ 100 on March 16, 2020 at 4:44 PM with 1: 2000 leverage, effectively had a $ 200,000 investment order. If they then closed that order on Nov 16, 2020, it would have generated a staggering $ 700,000 + profit.
Of course, this is not a realistic exchange. Such a perfect moment is rare and worthy of an epic celebration.
Also, you should know that not everything is sun and rainbow. Yes, leverage multiplies your gains, but it also increases the speed at which you can lose. Exness provides negative balance protection, so you can't lose more than your deposit, but you can lose quickly when you're trading on leverage. A slight move in the wrong direction can kill your trading order in seconds.
Exness offers flexible leverage. This means that you can control how high you want your risk and reward to be. Most cryptocurrency traders set their leverage between 20X and 50X, which can still provide an attractive return and make the investment less sensitive to unexpected fluctuations. So now you know what is possible. But what currencies should you trade?
Which cryptocurrency is the best in 2020?
There are hundreds of cryptocurrencies on the market, but not all of them are recommended by professional traders. A few have a legitimate place in the slow transition to a global digital currency. Professional traders tend to stick with the 5 big names.
Bitcoin and Ethereum tend to follow a similar pattern, historically showing 6-9 month growth followed by rapid declines or price corrections.
Bitcoin Cash is a completely different vehicle, and its prices can reflect or contrast Bitcoin. It is not easy to analyze, but it offers interesting price contrasts for long and short term traders.
Ripple is the outlier that shows greater price stability than all the others. In some periods, higher leverage may be required to see greater trading results.
There is enough history and information on each coin to write a book, but which coin is all the rage right now depends on when you are reading this article. This overview is just an introduction. Professional traders often say:
“Diversification is key. Don't put all your eggs in one basket ”.
Consider trading more than one currency and seeing which investment works best for you. Any of the Big Five will offer you countless opportunities to negotiate the waves.
Benefiting from a fall
Let's get to the important part. How to benefit from cryptocurrencies? Traders do their best to buy when they are low and sell when they are high. Since BTC and other cryptocurrencies are high (at the time of writing), the time to sell could be just around the corner. In the financial world it is called shorting.
When viewing a price chart on your PC or mobile device, you can see a BUY and SELL button. Tapping the SELL button means you intend to profit from a price drop. It's that easy. The greater the drop, the greater the profit. Cryptocurrency traders are patiently waiting for the next reversal event, and since Bitcoin is on the rise right now, a dip may be imminent.
It is impossible to predict how high Bitcoin will go this time, but, as with all investment instruments, what goes up must come down. Price charts are never flat lines! It is the nature of commerce. There are two perfect times to trade. When prices soar and when prices are low and stable. The unlucky traders are the ones in the middle. If the prices are correct when you read this article, you may not have much time to react. Read on to see how you can get a trading account in less than an hour and invest in cryptocurrencies today.
How to start trading with Cryptocurrencies
The first thing you will need is access to the cryptocurrency market. With Exness, registration is free, easy, and only takes a few minutes. Investing online is legitimate, so you will need to prove your identity and address, and yes… it is advisable to post all tax earnings. Exness plays no role in this, so keep your own records.
Once registered, you can fund your trading account in a number of ways, depending on where you are. Online bank transfer deposits are safe and popular, as are credit card transactions. By far the most recommended method is electronic transfer. Check if Exness accepts your e-wallet. If so, deposits are quick and easy, and you can enjoy instant withdrawals.
Prices are high, but are unlikely to stay that way for much longer. If history repeats itself, large investors will begin a series of massive SELL stages, cryptocurrency prices will drop, and the opportunity will be lost. Exness supports one-click trading, so you can react quickly if it happens soon. There is even a mobile app so you can monitor the market anywhere, anytime. And with the latest news notifications directly to your mobile, you won't miss a thing. Plus, you can use two automated tools to stop loss and make profit, so you won't have to look at charts 24/7 if you don't want to.
Follow the steps below and activate your trading account today. There is no obligation to trade and you can withdraw 100% of your funds if you miss the moment.
- Step 1: Prepare your deposit method and documents to prove your identity and address.
- Step 2: Click on the sign up link and follow the simple and guided process to open a secure business account.
- Step 3: Open the price charts on your mobile device or PC and prepare for a price reversal.
Disclaimer: Analysis publications are marketing communications and do not constitute any type of research or investment advice. Its content expresses the general opinions of our experts and does not contemplate the personal circumstances, investment experience or current financial situation of each reader. The material is not written in compliance with legal requirements based on the promotion of independent investment research and Exness is not subject to any prohibition in its operations prior to the release of the content. Readers should consider the possibility of loss and Exness is not responsible for any losses that may be incurred as a result of the use of available analysis material.