Trading Bitcoin with Leverage - A Beginner's Guide


Cedar Hill, St. Vincent and the Grenadines -- (SBWIRE) -- 11/03/2017 -- Cryptocurrencies are now the most volatile and talked-about instruments on the market. Leverage allows you to earn more with the same investment. Right now, four of the most volatile instruments are Bitcoin, Ethereum, Litecoin and Ripple. In that article will be discussed how cryptocurrencies are presented in margin trading.

Let us have a closer look at OctaFX which provides the most convenient trading conditions:

Trading crypto is available on the MT4 and MT5 platforms
Up to 1:10 leverage for cryptocurrency
The lowest spreads comparing to other brokers
Accurate trading signals system from Autochartist (free for OctaFX traders)

Bitcoin - the digital gold

Bitcoin is the first digital currency, created back in 2009. The main difference from traditional currencies (EUR, USD, JPY, etc) is that transactions are decentralised, highly secure, and what's more, completely private. Bitcoin is one of the most volatile, discussed and popular instruments among cryptocurrencies. Bitcoin trading mainly happens on news, for example a bullish trend before Bitcoin forks (this is the separation of Bitcoin when cryptocurrency owners get part of a new crypto). A bearish trend is usually seen after news regarding the ban of Bitcoin in some countries (China, for example). Bitcoin can be easily predicted using technical analysis figures, making your trading more profitable. Bitcoin is the most profitable instrument for trading in USD.

Right now the leverage for Bitcoin at OctaFX is set to 1:5, which is more than enough considering the high volatility of that instrument. Apart from that, you also can trade Bitcoin in microlots (0.01) which allows to plan your trading budget effectively. OctaFX sets the amount of 1 lot to 1 Bitcoin, which is comparatively low and requires less investment.

Ethereum - invest in the future

Ethereum is the second most interesting instrument to trade in USD. Nowadays there are more and more ways to buy Ethereum for fiat without exchanging it into Bitcoins. That means that the price of Ethereum is now less dependent from the Bitcoin price compared to other cryptocurrencies. It can be considered an independent instrument.

Etherium is a digital currency created in 2015. It is a system to support smart contract technologies to invest in the ICOs of new start-up companies. The more start-ups are interested in Ethereum - the more expensive it becomes.

To analyse the price of the Ethereum it's wise to research how many ICO contracts are about to be issued in exchange for Ethereum. Compare results with existing data - the more contracts, the higher the price. It's also good to pay attention to news about other cryptocurrencies supporting ICOs and competing with Ethereum. The most important competitors are Waves and Bitshares. Technical analysis figures work well with Ethereum too.

Combining that information with the leverage at 1:10 which OctaFX currently provides traders, Ethereum can sometimes lead to more profit than with Bitcoin.

Litecoin - crypto silver

Litecoin was first issued in 2011 and is quite similar to Bitcoin. If Bitcoin can be defined as the 'gold' of today's cryptocurrencies, this makes Litecoin the 'silver'.

Litecoin provides secure and fast transactions inside the blockchain, with the ability to purchase goods on the internet. The main difference from Bitcoin (and the central benefit of Litecoin) is the capability of processing much higher volumes in one transaction. While Bitcoin can only have up to 21 million coins, Litecoin offers four times as many - 84 million.

The Litecoin price now greatly depends on Bitcoin. That makes it possible to use the Pairs trading strategy with Bitcoin as a main currency to successfully forecast Litecoin changes.

The leverage provided by OctaFX for Litecoin is 1:5, and 1 lot equals 100 Litecoin.

Ripple - transfer it all

Ripple is not just another cryptocurrency - it's also the name of a system capable of processing a wide range of transactions. Ripple has the same goal as Bitcoin - to grant users all over the world access to quick and secure transactions. However what differentiates Ripple from other cryptocurrencies is that it allows users to transfer not just one currency - Ripple - but any other currency as well, including both cryptocurrencies and traditional ones such as USD, EUR and others.

Since Ripple is basically a banking product, the more interest about Bitcoin, the less Ripple costs. Watch out for news about Ripple acceptance by different companies and support of that cryptocurrency by major banks.

The leverage at OctaFX is 1:5 and 1 lot equals 10,000 Ripple.

There's currently a lot of talk around cryptocurrencies - some predict a fast rise and a dramatic fall, while others are confident that they are the currency of the future.

Sounds interesting? You can keep reading the hottest news and best articles on cryptocurrency, but you'll get much closer to understanding how it works by cryptocurrency trading.