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How to Trade Bitcoin Cash CFDs

Bitcoin Cash, or the BCH/USD CFD, was formed when Bitcoin went through a hard fork on August 1, 2017. We've explained what Bitcoin Cash is in one of our previous articles, but here's a quick reminder.

Bitcoin Cash (BCH), like its predecessor Bitcoin (BTC), is a peer-to-peer electronic payment system that is supported by blockchain technology and a decentralised computer network – a system based on cryptography processes that verifies and records electronic payment transactions without relying on trusted third parties, i.e. financial institutions.

Bitcoin Cash then lowers transaction costs by removing third parties who mediate disputes between buyers and merchants. Theoretically, it should decrease fraud by requiring security protocols, such as proof-of-work and digital signatures that are verified on a publicly-distributed ledger, known as blockchain.

How is Bitcoin Cash Different to Bitcoin?

Bitcoin Cash was created by the Bitcoin miner and developer community as they were concerned with the future of the cryptocurrency and its potential inability to scale-up effectively. BCH was formed as a result, with the main difference being that it features an increased block size, helping to accelerate the verification process.

How to Trade the BCH/USD CFD

Trading Bitcoin Cash CFDs are not much different to trading any other currency pair, commodity or CFD. However, when approaching the financial markets, it's critical to ensure that you're well prepared before entering any trade setups.

Yet, you might be wondering, what does a good level of preparation look like?

Well, traders should always be aware of three major components before tackling the markets. All three aspects are critical because they support each other and just one weak link could lead to failure. These components are:

  1. trading strategy;
  2. trading psychology;
  3. risk management.

A trading strategy or trading plan is important as it enables traders to know how and when to tackle the financial markets. It provides an outline of which tools to use and explains at which moments the odds could be stacked in their favour and when not.

Trading psychology is vital because risking real money will impact your nerves and possibly create fear and a potential rollercoaster of emotions. Trading psychology allows traders to formulate a proper response and helps them handle these situations.

Risk management is critical. It allows traders to protect their capital, which is needed to access the financial markets. Without proper risk control, traders tend to over-risk on one or a couple of trade setups, which may lead to large losses and drawdowns. See the video below for more details (English only).

A 50 EMA Strategy for the BCH/USD CFD

To successfully implement the below trading strategy, you will need to download Admiral Markets' MT4/MT5 plug-in called MetaTrader Supreme Edition. Among many other great tools, there is an indicator called the Admiral Pivot. To be able to trade this strategy, you need to follow certain rules.

Open Live Forex and CFDs account

Time Frame:

  • 30 min or H1 chart

Metatrader Indicators:

For buy trades, the MACD should be above the zero line, and the price, above the 50 EMA. When the price breaks the Admiral Pivot from below and closes above it, place a buy order.

Source: Admiral Markets MT4SE, BCH/USD Chart, m30 Time Frame, Nov 2017

The chart below shows how this looks on the MT5 platform. With just one click on the Admiral Mini Terminal, you can add the pivots to your charts.

Source: Admiral Markets MT5SE, BCH/USD Chart, H1 Time Frame, Oct-Nov 2017

Again, here's an example of a long trade using the MT5 platform:

Source: BCH/USD Admiral Markets MT5SE, M30 chart, Dec 2017

Trading Bitcoin Cash CFDs with MetaTrader 5

This enhancement is the future of online trading because MetaTrader 5, which retains the usability and the looks of MT4, is incomparably more advanced and feature-packed software, both on the client side and on the server side. This means that it's able to support even more instruments, markets, exchanges and trading setups, with almost no limits on flexibility or scalability – and that's really good news for our traders!

This new, revamped platform offers the following:

  • Hedging;
  • No FIFO rule;
  • An integrated fundamental calendar;
  • Commerce integration;
  • Improved charting and time frames;
  • Exclusive first-class indicators;
  • Multiple market order ability;
  • MT5 Supreme Edition integration.

This is just a small list of some of the new features that the new MT5 has, find out more and download for free today on our website.

Trading Other Cryptocurrency CFDs

Besides trading Bitcoin Cash versus the US Dollar (BCH/USD), Admiral Markets clients can also choose to trade CFDs on Bitcoin versus the US Dollar (BTC/USD), Ether versus the US Dollar (ETH/USD), Litecoin versus the US Dollar (LTC/USD) and Ripple versus the US Dollar (XRP/USD).