What is Cryptocurrency trading?

Cryptocurrency trading is the most burning topic of the decade. People are seeking about it curiously and want to know more. This is all because of the money generating nature of this trading.

Before, knowing about cryptocurrency trading, one should know ‘what is a cryptocurrency?’ You can have the answer of this million-dollar question, in our blog whose link is provided.

Definition of Cryptocurrency Trading

Let’s get back on the topic with the introduction of cryptocurrency trading. It is a speculation of cryptocurrency price movement with CFD trading account. In a simple word, it is a buying and selling of cryptocurrency or digital coins via an exchange.

What do you mean by CDF Trading?

It is a contract for difference. CDF is a contract between seller and buyer. In which, buyer will pay to the seller an amount of difference between the current value of its purchased coins than its value at the time of contract without taking the ownership of the coins.

Here are two options, log and short. If you think the value of a cryptocurrency will rise, you can go for long (“buy”) or in case of fall you can go for short (“sell”).

These are leveraged products. It means, you need to do a small deposit (or we can say margin), in return you will get full exposure over whole underlying market. This will calculate your profit or loss over full size of your position. This will magnify your profits and losses.

What do you mean by Cryptocurrency Exchanges?

Cryptocurrency exchanges is a platforms or applications, which allow you to do trading of cryptocurrency. It is an intermediary between a buyer and a seller. It earns from commissions and transaction fees.

First of all, you have to create an account over such platform and then put a value for your asset to open a position. Then you have to store the cryptocurrency, until you reach to the appropriate time to sell it.

These exchanges have many features, that will help you to learn and get familiar to this new era of digital money transaction. It also provides you an option of limiting your deposits. So that you will not feel it expensive to maintain.

Structure of Cryptocurrency Market

Now you get familiar with all technical words of cryptocurrency trading. So, it’s an optimal time to understand the structure of cryptocurrency market. This will answer the question that how do cryptocurrency market work?

As we know that cryptocurrency is decentralised. It has zero control of any authority or government. It run over a network of computers. While, we can sell and purchase it via exchanges and stored it there, in digital wallet.

Cryptocurrency is a shared digital record of ownership that is stored on a blockchain. It is sent by one user to another by their digital wallet. This transaction is verified by a process called mining.

This is the way Cryptocurrency circulate in the market. to get more about it in deep then can read our article “What is Cryptocurrency?”