Cryptocurrencies are a hot topic of conversation now and hardly a day goes by where someone isn’t talking about them for one reason or other. Therefore, there’s a lot of advice out there and sometimes it can be confusing what to listen to and what to treat with a little caution. To help you, here’s some friendly advice from Jones Mutual on cryptocurrency trading and how to use CFDs with them.

Benefits of cryptocurrencies

Let’s start by thinking about why you might want to trade in cryptocurrencies – sure, they are new and interesting, but does that make them a worthwhile investment? There are some strong points in their favour:

  • No limit to time – unlike a lot of markets, such as commodities, which only trade between specific hours, cryptocurrency trading can be done at any time which means you can fit it in around your working schedule.
  • Market volatility – while volatility can be bad in some markets, it is viewed as a positive when it comes to cryptocurrencies – there’s the chance of big profits. If you make a loss, the chance is things will swing back around in your favour and quickly.
  • Quick and cost-effective – most platforms take only a small commission for their services on these trades and fees are smaller than for standard currencies. So, it is quick and cost-effective to trade.

CFD cryptocurrency trading

Once you are won over by the idea of cryptocurrency trading, the next step to consider is what approach you will take. You can buy the currency, just like you would other assets, but a popular option is to trade with CFDs or contract for difference.

The idea of CFDs is that you don’t need to own the whole asset to trade with it. There are two reasons why this is good – you can start exchanging with lower capital, and you don’t feel the full impact if there’s an abrupt downturn in value.

We’ve all seen the tremendous rise and fall of Bitcoin over the last year. If you owned the Bitcoin, you might have made a significant profit selling at the right time or a substantial loss buying at the wrong time. With CFD, you don’t own the asset, so you don’t feel the full force of those fluctuations – in fact, market volatility is a potential opportunity to make more money.

Long or short trading?

Another factor to think about, with types of trades, is whether you want to be a long-term or short-term trader.

Short term trading dives into that market volatility and makes the most of it. You can use short-term price swings and make trades over hours or even days. The trades are quick and intense and can be a bit str and more frequent profits.

Long-term trades take place ovressful at times, but they are the most exciting way to trade with potential for lots of smalleer weeks, months or even years and they are designed for people who love to plan. You study the price trends over a longer time frame and decide when is best to make that all important trade. The aim is to avoid those sudden dips and still make money.

Get the right platform

The key to whatever approach you take is getting the right platform for your trades. Here at Jones Mutual, we offer CFD trading for cryptocurrencies and various other assets. We also provide plenty of advice and help to get you started allowing you to learn as you trade. You can develop a strategy to accommodate your capital and available time and start making those profits almost straight away.