Basic education for Forex and Crypto traders

Crypto and Forex

Since the launch of Bitcoin in 2009, cryptocurrencies have been around for almost 12 years and have grown in popularity. But why bring up cryptocurrencies while we’re talking about forex? The relationship between trading in cryptocurrencies and forex, as well as how to do so, will be covered in this article. Daily traders write many articles on forex and crypto trading.

What are Cryptocurrencies and How Do They Relate to Forex?

Cryptocurrencies are a type of digital or virtual money that can be exchanged for real money, used to buy goods, or traded on platforms as contracts for differences. You are essentially speculating on the price movement of the underlying instrument when you trade cryptocurrency CFDs.

Additionally, in addition to being coupled with other cryptocurrencies, fiat currencies such as the US dollar (USD), British pound (GBP), and euro (EUR) can also be used to create a Forex-crypto pair.

Additionally, it is well known that cryptocurrencies are incredibly volatile, frequently seeing significant price increases or decreases in a single day. To prevent trading more than you can afford to lose, always employ risk management techniques and tools. In addition to free how-to trade videos and articles to assist you in making more informed trading decisions, Plus500 also provides free risk management tools to help you try and limit your losses.

How to Trade Cryptocurrencies

Two of the various ways to trade cryptocurrencies include buying them from a cryptocurrency exchange and trading cryptocurrency CFDs with a reputable CFDs provider like Plus500.

Trading CFDs on cryptocurrencies is different from buying and selling actual coins. You can buy a cryptocurrency straight from a reliable cryptocurrency exchange, but doing so will cost you a lot of money in transaction fees. Additionally, you would need to make sure your device is secure against hacking threats that could jeopardize your cryptocurrency holdings. You would need to keep your cryptocurrency in a crypto wallet and remember the passcode in order to open it. also check: qumas ai

Trading cryptocurrency CFDs, on the other hand, allows traders to trade without having to worry about the aforementioned variables. Without really holding the underlying asset, you can speculate on its price swings by trading CFDs on cryptocurrency. As a result of changes in the underlying asset’s price, you may experience gains or losses. A variety of cryptocurrency pairs and instruments, including Axie Infinity, Uniswap, Filecoin, Chainlink, Bitcoin Cash ABC, Ethereum, Bitcoin, and more, are available through Plus500 as Contracts for Difference (CFDs), all of which are traded against the US dollar.

Cryptocurrency Trading Can Be Similar to Forex Trading

There are a few considerations to make when trading cryptocurrency. First, just as there are significant fiat currencies like the USD, JPY, GBP, and EUR, there are significant cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). These main cryptocurrencies are utilized as base currencies against both fiat currencies and other cryptocurrencies and have the biggest trading volumes.

Second, the Plus500 CFD Platform makes it simple to trade CFDs on cryptocurrencies and Forex by clearly displaying the bid and ask prices. You can put the appropriate Buy or Sell order on cryptocurrencies, forex, and other markets based on your predictions on whether the price of the reference instrument will increase or decrease.

Major Cryptocurrency Trading Pairs

Following our discussion of the connections between cryptocurrencies and forex, we will list the most popular and significant cryptocurrency pairs that are accessible on the Plus500 platform. For traders who would wish to assess the liquidity that is offered in the market before deciding on their next trade, this is crucial information.

Due to their high liquidity and market size, the following cryptocurrency pairs are the most popular ones for trading:

  • BTC/USD – The most popular trading pair for bitcoin (BTC) is the US dollar. In this case, BTC serves as the base and the quote currency is one BTC expressed in dollars.
  • ETH/USD – After Bitcoin, Ethereum (ETH) is the second most popular cryptocurrency. As a result, it also has a high trading volume and a lot of liquidity when compared to the US Dollar.
  • Litecoin (LTC)- is exchanged for US dollars in the LTC/USD market. Litecoin is a cryptocurrency created to be lighter and faster than Bitcoin.
  • Cardano/USD Cardano (ADA), which is also traded against the US dollar, has a market capitalization of over $37 billion, making it the seventh-largest cryptocurrency.
  • Solana (SOL)-a cryptocurrency and platform that enables the use of other cryptocurrencies, is comparable to Ethereum.

Implications of Cryptocurrencies for Forex

Trading cryptocurrencies is still less prevalent than trading foreign exchange, but because of their high levels of volatility, traders’ interest in doing so is rapidly rising.

In light of this, you can trade cryptocurrencies on the Plus500 platform, which provides a variety of CFDs on cryptocurrencies without requiring you to set up a cryptocurrency wallet. Trading in Crypto CFDs is available on the Plus500 platform around the clock, every day of the week (except for 1 hour on Sundays)