How to Trade Crypto CFDs 2021 - A Guide to Crypto CFDs
Table of Contents
- Trading in Cryptocurrency - A Brief History
- Trading Crypto CFDs - Noteworthy Alt Cryptos to Trade with
- Crypto CFD Trade Pairings and Cryptocurrency Asset Codes
- Why Trade Cryptocurrency CFDs?
- Trade Bitcoin CFDs
- Trade Bitcoin Cash CFDs
- Trade Litecoin CFDs
- Trade Ethereum CFDs
- How Does Mining Fit into All of This?
- Where Do I Find Cryptocurrency CFDs in the MetaTrader 4 Trading Platform?
- How to Open and Close a Position in the Ethereum Cryptocurrency CFDs
- An Easy Way to Get Started
Have you positioned yourself as a long-term investor in crypto or have you been taking advantage of the Buy/Sell trend when trading crypto CFDs? Or both?
The growingly mass-accepted, thriving world of cryptocurrency has been on a buy/sell/profit run over the past few years - both 2020 and now, 2021 has seen various coins in ATHs (All Time Highs)!
If you didn't believe nor pay attention in the not-so-distant past, you may now be adjusting your strategy. The option to trade crypto CFDs, rather than direct buy and sell via crypto exchanges, comes with many sizeable benefits. Low or no fees, instant and incredibly efficient in terms of effort... let us guide you along your trading journey while trading cryptocurrency CFDs.
This article will provide you with a guide to trading cryptocurrency CFDs where you will learn about why traders use CFDs for cryptocurrency trading, how to start trading crypto on MT4 and MT5 - some of the best crypto trading platforms available - and all about day trading crypto strategies and trading crypto volatility. We will also look at the different types of cryptocurrency CFDs available to trade on such as Bitcoin, Litecoin, Ethereum, Bitcoin Cash, Stellar Lumens and other exciting crypto CFDs we have added in 2021.
Trading in Cryptocurrency - A Brief History
The topic of trading crypto, and more specifically, trading crypto CFDs, has been 'all the buzz' for the trading community over the past few years - And now, in 2021, it has most definitely gone 'mainstream' in every sense of the word. Let me give you a prime example - on June 9th 2021, El Salvador was the very first country in the world to make $BTC legal tender! That is pretty ground breaking. Crypto seems like it will be sticking around, at least for now - but let's take it back a few steps and see where crypto and trading in cryptocurrency began.
Bitcoin came to the surface in 2009 as the one and only cryptocurrency - While now, it still remains "the big dog". But what is cryptocurrency, exactly? Cryptocurrency is a type of ''digital asset'' or ''digital currency''. It does not exist in the physical sense, as is the case with regular fiat currencies such as the Dollar and the Euro. Crypto exists on the blockchain which is secured by cryptography. The basis of this technology means it cannot be counterfeited nor double spent. Cryptocurrencies are not regulated or managed by any financial authorities, or bank, in the same way as traditional currencies are. It is mostly self-regulated, through the use of various encryption techniques and users within associated networks providing the verification that enables transactions to occur. Many will refer to it as the technological key of the "free world".
Moreover, Bitcoin was originally proposed as an electronic payment system based on cryptographic proof. The cryptographic proof came from the emerging technology of the blockchain — a kind of list of digital signatures that provide computational evidence describing the entire transaction history of each Bitcoin.
This public chain of ownership allows peer-to-peer transactions, without any need to entrust a third-party with the task of processing the payment. This lack of any kind of third party operating in a single, supervisory role means that Bitcoin is a decentralised digital currency. Back in 2009, some market commentators dismissed this new, virtual currency as a mere fad, a transitory reaction to the subprime crisis that had racked the global economy back in 2008. Can you imagine their thoughts now?
But as Bitcoin has grown in value and credibility over the years, interest in this new type of currency – and the technology framework that underpins it – has blossomed. As more investors, payment providers, industries, and now, a country, have embraced Bitcoin, its value has been driven higher, which in turn has driven greater interest in this asset class. This has led to an incredible increase in value and volatility. At this time of writing, Bitcoin's ATH in its entirety was recently, in April 2021, when BTC hit $63,729.5 after the Coinbase IPO launched.
The Rise of The Alts (Alternative Cryptocurrencies)
As a consequence of all of this, a large number of alternative digital currencies (known as Alts) have arrived on the scene (and on some occasions have departed just as quickly), based on the innovation of the blockchain or such similar concepts. Before things really started to heat up in early 2016, the combined value of all cryptocurrencies was estimated to be around $8 billion; by March 2017 this had ballooned to around $25 billion. And now, in June 2021, the total cryptocurrency market cap in hovering around the $2 trillion mark. Yes, that is with a 'T'!
The claim to fame for many Alts came in 2017. Of course, it also proved to be a remarkable year for Bitcoin, and the cryptocurrency market in general. Generally speaking, Alt coins tend to follow the movement of Bitcoin; BTC broke above $6,000 in October of 2017 and by early December had rocketed above $10,000 - Then set a record level of $19,783 at the end of 2017. The leader behind Bitcoin, Ethereum (ETH), also had its first big spike in 2017, which comes to no surprise considering the patterns shown so far in cryptocurrency. In June 2017, Ethereum hit its ATH (All Time High) of $343.42, where it was only $94.01 in May 2017. Now, in June 2021, Ethereum stands around $2,444.42, with its ATH at $4,376.31 which took place on May 12, 2021. Can you imagine if you were amongst those who bought to "HODL" back in 2017, or even earlier?
To clarify, if you're new to the "Cryptoverse" and have seen the term "HODL", no, it is not a spelling error. "HODL" is a term used amongst cryptocurrency investors and those trading in cryptocurrency. It stands for "hold on for dear life", which can certainly put some people off, as you would imagine. In reality, the slang term remains popular as used amongst many considering the volatility that comes with trading cryptocurrencies. Depending on the type of trader and investor you are, volatility can be a very beneficial factor to your portfolio, if you manage it correctly.
Cryptocurrency as a whole is an industry that is certainly maturing as time goes by. Many serious investors and notable business figures have already partaken, with more boarding the ship into what seems to be "Crypto Paradise" for those who want to maximize on profits, with a calculated risk, of course. For example, Sir Richard Branson was quoted by a Bloomberg reporter back in 2016 when asked what he thought of Bitcoin as a currency. The quote reads, “Well, I think it is working. There may be other currencies like it that may be even better. But in the meantime, there’s a big industry around Bitcoin. — People have made fortunes off Bitcoin, some have lost money. It is volatile, but people make money off of volatility too.” It would be hard to deny that Sir Richard Branson may have had some clever intuition, which comes as no surprise.
Ethereum has certainly led the way for many of the alt currencies which have followed suit. In our next section, you'll have the opportunity to explore more alt cryptocurrencies and the crypto CFD parings we offer at Admirals (formerly Admiral Markets).
Trading Crypto CFDs - Noteworthy Alt Cryptos to Trade with
We have covered plenty on the topic of Bitcoin, its rise to fame, its high and lows, and the continued belief that the leading cryptocurrency has potential in the mainstream financial world. But what other cryptocurrencies, all of which are considered "Alternative Cryptocurrencies", are out there and beneficial to your crypto CFD trading journey?
The runner up to Bitcoin, which we have covered, is without a shadow of a doubt, Ethereum. Alt cryptos are an interesting topic as they coincide with smart contracts. Smart contracts, simply put, are programs stored on the blockchain which automatically execute once predetermined conditions are met. These smart contracts can be used within finance, medical, real estate and so on as a contractual agreement shared amongst all parties mutually, without any intermediary's involvement, hence saving time. In short, Ethereum remains the most widely used platform for smart contracts on the blockchain, heavily influencing its rising price. It is mentioned that it could be the global standard of smart contracts in the not-so-distant future.
Along with Ethereum (ETH), Admirals offers crypto CFD trading on the following alts which carry smart contract capability: Stellar (XLM), EOS, Ethereum Classic (ETC), Bitcoin Cash (BCH), Ripple (XRP), Dashcoin (DSH), and Zcash (ZEC). If you want to get started with crypto CFDs, you can jump ahead to this link here to view more information and get started.
Litecoin (LTC), which we also offer as a CFD with both EUR, US Dollar and BTC vs. LTC pairings, is partnering with Flare Networks in order to add smart contract capability in Q2 2021 (which will likely have an effect on the price, once this launches officially). Monero (XRM), which we also offer, does not have the capability of smart contracts on their own.
Why do we mention smart contracts when discussing alternative cryptocurrencies? Well, while there are many factors which affect crypto prices – News, supply and demand, capabilities for broader use cases, mining, internal governance, crypto regulation, to name a few – smart contracts, with the wide spectrum they provide and growing popularity, will inevitably be a driver behind the prices of alts.
Crypto CFD Trade Pairings and Cryptocurrency Asset Codes
Cryptocurrencies are quoted against the US Dollar (USD) and the Euro (EUR) - two of the world's most widely-used currencies. They are also more and more commonly being quoted against the Bitcoin price in CFD crypto trading.
The following list shows you the crypto asset codes used to represent these major cryptocurrencies against the US Dollar:
- Bitcoin against the Dollar - Code: BTC/USD
- Ethereum against the Dollar - Code: ETH/USD
- Bitcoin Cash against the Dollar - Code: BCH/USD
- Litecoin against the Dollar - Code: LTC/USD
- Ripple against the Dollar - Code: XRP/USD
- Ethereum Classic against the Dollar - Code: ETC/USD
- Dashcoin against the Dollar - Code: DSH/USD
- Stellar Lumens against the Dollar - Code: XLM/USD
- EOS against the Dollar - Code: EOS/USD
- Monero against the Dollar - Code: XRM/USD
- Zcash against the Dollar - Code: ZEC/USD
Similarly, the list below shows the crypto asset codes for the major cryptocurrencies against the Euro:
- Bitcoin against the Euro - Code: BTC/EUR
- Ether against the Euro - Code: ETH/EUR
- Bitcoin Cash against the Euro - Code: BCH/EUR
- Litecoin against the Euro - Code: LTC/EUR
- Ripple against the Euro - Code: XRP/EUR
- Ethereum Classic against the Euro - Code: ETC/EUR
- Dashcoin against the Euro - Code: DSH/EUR
- Stellar Lumens against the Euro - Code: XLM/EUR
- EOS against the Euro - Code: EOS/EUR
- Monero against the Euro - Code: XRM/EUR
- Zcash against the Euro - Code: ZEC/EUR
Admirals also offers digital currency cross pairs:
- BCH vs BTC CFD - Bitcoin Cash versus Bitcoin
- DSH vs BTC CFD - Dashcoin versus Bitcoin
- EOS vs BTC CFD - EOS versus Bitcoin
- ETC vs BTC CFD - Ethereum Classic versus Bitcoin
- ETH vs BTC CFD - Ethereum versus Bitcoin
- LTC vs BTC CFD - Litecoin versus Bitcoin
- XLM vs BTC CFD - Stellar versus Bitcoin
- XRM vs BTC CFD - Monero versus Bitcoin
- XRP vs BTC CFD - Ripple versus Bitcoin
- ZEC vs BTC CFD - Zcash versus Bitcoin
Why Trade Cryptocurrency CFDs?
Before we give you the information needed on how and why to trade cryptocurrency CFDs, first let us briefly explain the difference between trading crypto CFDs and owning crypto (to then trade). When you are purchasing any given cryptocurrency to own, you must do so through an exchange where you then have the crypto stored in a wallet. The wallet can be built into the exchange (which is not highly recommended to use, as crypto exchanges can be easily hacked, exposing any funds held), or the wallet can be a third party of which you have installed on your computer directly or via the wallet website. In this case you literally own said crypto. If you want to take advantage of the ongoing price fluctuations and trade this crypto for profit, you can, however this will always involve sometimes expensive fees and generally is not an instant transaction. For this reason, if you are looking to buy and sell crypto, it really does not make a huge amount of sense to trade via crypto exchanges.
So, how is it different when trading crypto CFDs? And why should you trade crypto CFDs in the first place? Well, as you may already know, 'CFD' stands for "Contract for Difference", where you do not own the underlying asset - you do however maintain the right to the underlying asset between yourself and the brokerage - with Admirals, for instance. This is the utmost important difference to keep in mind when differentiating between the two.
That leads us to the many why's of trading crypto CFDs and why it could be the most beneficial. First off, CFDs do not have an expiry date, giving you the freedom to position yourself in the market at any time, to either buy or sell. Where you will most definitely have fees associated to trading crypto on an exchange, you will not incur fees for your positions set when you trade crypto CFDs with Admirals. When it comes time to open or close a position, the action is instant, so you are taking advantage of the current price right then and there. Having the option to trade with a small amount of capital (typical minimum contract size of 0.1 Lots) to start is another huge advantage to trading with crypto CFDs; this benefit is most certainly true for the beginner trader. This gives the beginner trader a confident starting point where they can grow their positions as they learn and gain experience.
When you use a CFD broker such as Admirals for your crypto CFD trading, it comes with great convenience, as you can access many crypto assets in one place. Before entering your CFD contract, you can also set your Take Profit and Stop Loss, managing your risk appropriately and also in a sense, saving time by somewhat automating your trading. The option of leverage also comes into play, as long as you manage your portfolio appropriately (also, make sure you are aware of the risks associated with leverage).
Trade with a Demo Account
Traders that choose Admirals (formerly Admiral Markets) will be pleased to know that they can start by using a risk-free demo trading account. Instead of heading straight to the live markets and putting your capital at risk, you can avoid the risk altogether and simply practice trading crypto CFDs until you are ready to transition to live trading. This gives you a great opportunity to put your newfound crypto knowledge to the test and see how you fair trading alongside volatility - without risking any capital whatsoever.
Trade Bitcoin CFDs
For even the finest of crypto CFD trading newcomers, it has been made clear - Bitcoin still remains to be the 'King' of all cryptos. We quickly mentioned previously in this how to trade crypto CFDs guide, alt cryptos generally follow the pattern of BTC. So, when you want to learn CFD crypto trading, wouldn't it make sense to study the patterns of Bitcoin?
So, how do we do it? With crypto CFDs (or any CFDs), you can either choose to place a 'Buy' order, expecting the price to rise, or a 'Sell' order, expecting the price to decrease. Naturally, you and only you can decide what you believe the price outcome will be, and what that timeframe will be. Again, remember - CFD positions do not expire, as in the case of options; you can always wait it out for the price to rise, so you can at least break even, or ideally profit (fees may apply when holding positions over night).
When it comes to answering how to trade Bitcoin CFDs, you must consider the following factors. What's your strategy? Are you day trading in the BTC price volatility? Day trading is incredibly technical, time consuming and may not the best option for a beginner CFD trader. Swing trading the BTC price is slightly more simplified - you are buying and selling based on market movements, typically riding out the trend and selling once you get a hint of a trend reversal; technical analysis is paramount here. Knowing the Fibonacci retracement levels comes as a nice advantage here. If you're swing trading, positions could remain open for a few weeks, a few days, or a few hours - which allows a bit more flexibility. You could also decide upon scalping Bitcoin CFDs as a strategy - quick Buy and Sell movements, taking advantage of micro market movements (always knowing your exit strategy). These are the three most common crypto CFD trading strategies to consider, while you may want to keep in mind that not all brokers allow scalping.
Once you know which CFD crypto trading strategy is ideal for you, it is crucial you understand the market you're working within, in this case Bitcoin. It is wise to pay close attention to the charts we have available in both the MetaTrader 4 (MT4) or MetaTrader 5 (MT5) platforms - which you can access for free.
Using the MT5 platform, below shows the price fluctuations within a five-minute time period - to give you an idea how volatile the crypto market is, and how you can use this to your advantage by using the tools we provide to quickly Buy and Sell positions for profit.
Source: Admiral Markets MetaTrader 5, BTCUSD, 5 minutes - Data range: from June 18th 06:45 to 16:05 CET, accessed on 18 June 2021 at 15:30 CET. Please note: Past performance is not a reliable indicator of future results.
Convenience is perhaps the main benefit when trading Bitcoin (digital pairings, BTC/USD or BTC/EUR) using CFDs. All that's required is to open a live trading account, and you can then readily trade BTC/USD or BTC/EUR from a chart using a trading platform such as MetaTrader 4 (MT4) or MetaTrader 5 (MT5). Remember, now you can also trade with BTC against other digital currency pairs as well.
Trade Bitcoin Cash CFDs
Did you know Bitcoin Cash is simply an offshoot of Bitcoin, resulting from a hard fork in the blockchain? A hard fork is effectively a divergence in the transaction record into two separate and incompatible chains, each governed by a different set of rules. The hard fork in Bitcoin that created Bitcoin Cash arose from a bottleneck within the Bitcoin network, caused by the size of the blocks which also created a problem of higher fees and delays in transactions.
A section of the Bitcoin community wanted to increase the size of each block in order to deal with this issue of scalability. Others wanted to keep things as they were, and in August 2017, the blockchain split. Bitcoin Cash adopted larger blocks in a new branch of the blockchain, and mainline Bitcoin continued with the original chain.
Now, in June 2021, the price hovers around $597.82. To put things in perspective, its ATH was $3,160.00 which occurred on December 22, 2017. Does this mean Bitcoin Cash is undervalued at the current?
Consider our points made in the above Bitcoin CFDs section in regards to how to trade Bitcoin Cash CFDs.
To view the historical and current price of Bitcoin Cash to see how it has changed over time, you simply need to follow these next steps.
- Login to your MT4 or MT5 trading platform provided by Admiral Markets Cyprus Ltd
- Right-click on the 'Symbols' window
- Select 'Show All'
- Search for BCH/USD (or BCH/EUR or BCH/BTC) in the list
- Right-click on this and select 'Chart Window'
Source: Admiral Markets MetaTrader 5, BCHUSD, Weekly - Data range: from 24 March 2019 to 16 May 2021, accessed on 14 June 2021 at 13:30 CET. Please note: Past performance is not a reliable indicator of future results
Trade Litecoin CFDs
Now that you understand the process of purchasing crypto CFDs, you might want to know the history of some leading coins. Litecoin began in 2011 when it was created by Charles Lee, whilst he was still an a employee at Google. Litecoin was, for a while, the second-largest cryptocurrency, gaining a reputation as being the silver to Bitcoin's gold. It has in recent years been eclipsed by other newer cryptocurrencies though. Litecoin's core aim was to provide an alternative to fiat currency for payment.
While Litecoin is very similar to Bitcoin in a technical manner, the crypto offers much faster transaction times and lower transaction fees. This makes it more suitable for smaller transactions and real-world use. At the time of writing, Litecoin is the sixth-largest cryptocurrency in terms of market capitalisation. Aliant Payment Systems, a US-based payment services merchant, announced in February 2018 that they were adding Litecoin to their range of services, alongside Ethereum and Bitcoin.
Trade Ethereum CFDs
What is Ethereum? Ethereum (also interchangeably referred to as ETH) is a decentralised, blockchain-based computing platform. Which is to say, where Bitcoin is a currency pure and simple, Ethereum is a whole lot more. It takes the technology at the heart of Bitcoin – the tamper-proof public ledger known as a blockchain, and run by a network of nodes – and uses it as the infrastructure for a system that proposes to turn the way the cloud works on its head.
Rather than apps, payment services, and cloud storage being operated by single parties, Ethereum proposes a network wherein no single entity governs these processes. To use this network, you need Ether. Ether is a cryptocurrency that allows you to pay for transactions and services within the Ethereum network and essentially acts as the driving force behind the network.
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Ethereum vs Bitcoin
Ethereum offers substantially faster transaction times compared to Bitcoin, owing to its shorter block time – which is the mean amount of time for the network to generate another block within the blockchain. This also means lower transaction fees compared with Bitcoin.
Perhaps most interesting of all is that Ethereum offers smart contract functionality – a new technology that has been opened up by blockchains. Basically, a smart contract enforces the terms of a relationship with cryptographic code. Ethereum has quickly grown in popularity, and is currently the second-largest cryptocurrency by market capitalisation ($215 billion at the time of writing - June 2021).
Ripple, Also known as XRP
What is Ripple? Ripple (sometimes also called Ripples or XRP) is a payment protocol that enables peer-to-peer money transfer. Like Bitcoin, it uses a public ledger for security that is constantly validated by a network of independent servers. Ripple is also the name of the company that runs the protocol, headquartered in San Francisco. Ripple is also used interchangeably for the native digital currency of the protocol.
The Ripple system was conceived as having a wider scope than Bitcoin, purporting to allow fast, secure financial transactions of pretty much any type. It doesn't just support XRP, but all currencies in fact. Ripples are the tokens that support the payment system, and they are the third-largest cryptocurrency by market capitalisation (at the time of writing).
Users need to have a small reserve amount of XRP on their account to act as an obstacle for hackers attempting to flood the network with fake accounts. For similar reasons, each transaction incurs a tiny XRP charge to preclude a flood of fake transactions. Ripple does not use mining like Bitcoin to create new tokens (see the mining section below for more information).
Instead, the founders created 100 billion XRP at the beginning and stated that no more would be created, based on the rules of the protocol. Somewhat controversially, a large chunk of that XRP remains in the hands of the founders. There are questions of how decentralised the protocol actually is, but at the same time, this cryptocurrency and payment system has garnered attention from mainstream financial institutions in a way that has eluded other rival virtual currencies.
How Does Mining Fit into All of This?
If you have a passing familiarity with either Bitcoin or cryptocurrencies in general, you have likely come across the concept of 'mining a digital currency'. In this context, what is mining exactly? To answer that question, we need to examine the creation of cryptocurrency. The terminology originated from Bitcoin and stems from the fixed number of Bitcoins that will ultimately exist (21 million) according to the Bitcoin protocol. Only a certain number of these have been 'unearthed' so to speak. Mining involves unearthing new cryptocurrencies, and this actually happens as a reward.
This 'reward' is an economic incentive given to a miner for the work completed in terms of creating new blocks of validated transactions, and therefore contributing to the upkeep of the network. It was also designed as an initial mechanism for distributing coins in the intentional absence of a central authority.
Cryptocurrencies rely on nodes. These are computers or servers that work together to exchange transactional information around the network. A mining node is effectively trying to win a race to solve a computational puzzle — an exhaustive search of possible inputs that when combined with data in the current block and passed through a cryptographic hash function, will give an acceptable solution.
The first node to do this 'wins' the race and adds a new block to the blockchain. This provides a new hash for the next block that defines the upcoming puzzle to be solved. The reward is a certain number of the cryptocurrency in question. Solving the puzzle is made intentionally difficult to prevent someone going back to alter information in older blocks.
Modifying a past block in this way would also require you to redo the puzzle solving for all the newer blocks chained after it. The difficulty involved makes it extremely unlikely that such an attacker could keep up with the addition of new blocks by honest nodes. Boiling it all down to the nuts and bolts, the process was designed to issue a steady stream of Bitcoin, while also maintaining the credibility and security of the transactional history – without relying on oversight from some central authority. The original Bitcoin proposal by Satoshi Nakamoto actually introduced the mining term.
Is the mining of Bitcoin profitable? Or should you instead mine Ripple or another cryptocurrency? The short answer is: it's not profitable for most people anymore. The Bitcoin protocol aims to yield a steady flow of tokens (one every ten minutes). It follows that the more people mining, the greater the difficulty of success. So back in the early days of Bitcoin, it would have been possible for an individual to profitably mine Bitcoin.
The competition now is so fierce though that extremely powerful, dedicated computer hardware is a necessity, running 24 hours a day. As you can imagine, this comes with an attendant cost in electricity that is substantial. Rather than mining as individuals, people pool their resources to set up 'mining farms'. These are data centres running thousand of machines, located in areas with low electricity costs.
As an individual, it is actually much more convenient to trade the valuation of a cryptocurrency by using CFDs. Trading crypto CFDs offers a quick, simple, and versatile way to speculate on the price of a variety of major cryptocurrencies. Now that you're up to speed with the big names, let's move on to actually getting started with trading cryptocurrencies.
How to Connect to a Cryptocurrency CFD Trading Account in MT4 or MT5
- Open a Live Trading Account
- Download MT4 or MT5 to use as your cryptocurrency trading platform
- Open the platform and click on the 'File' tab at the top left of the screen
- Select 'Login to Trade Account' and enter your trading account details
- Open the cryptocurrency CFD chart of your choice
- Click 'New Order' when you want to buy or sell
You can read more about opening an account and logging in to MetaTrader with article on How to Open a MetaTrader 4 Account.
Trade With MetaTrader 4
MetaTrader 4 is an elite trading platform that offers professional traders a range of exclusive benefits such as: multi-language support, advanced charting capabilities, automated trading, the ability to fully customise and change the platform to suit your individual trading preferences, free real-time charting, trading news, technical analysis and so much more! Click the banner below to receive your FREE MetaTrader 4 download!
Where Do I Find Cryptocurrency CFDs in the MetaTrader 4 Trading Platform?
While many traders try to use a trading crypto book to gain experience and skills in trading crypto, one of the best ways to start is to familiarise yourself with a cryptocurrency CFD chart. If you can't see the cryptocurrencies you want immediately in MetaTrader, just go to the MarketWatch window on the left-hand side of the platform.
In that window, you should see a list of market symbols. This may not be an exhaustive list of all the markets that are available for you to trade with Admiral Markets, however. To see this list, just right-click in the 'MarketWatch' window and select 'Symbols'. You should now see cryptocurrency CFDs in the list of prices, as shown in the image below:
The Symbols window from the MetaTrader 5 trading platform provided by Admirals
To launch a cryptocurrency chart, and start trading crypto just click on the symbol in the Market Watch window and drag into the chart window on the right. Alternatively, right-click on the cryptocurrency of your choice and select 'Chart Window'.
How to Open and Close a Position in the Ethereum Cryptocurrency CFDs
Placing an order on a cryptocurrency is very easy with MetaTrader 4 which is why many traders start day trading crypto on a demo account before they go to a live account. Let's run through an example of how to start trading crypto and open a position using Ethereum. For this example, we used an enhanced version of MT4 by downloading and installing the MetaTrader 4 Supreme Edition (MT4SE) plugin. The MT4SE plugin is free to download, and gives your platform a big boost in terms of the available number of indicators and expert advisors.
Cryptocurrency Invest Example: Opening an ETH/USD Position
For this we used the Mini Terminal EA. Once you have installed MT4SE, you should see this listed as 'Admiral – Mini Terminal' in the list of expert advisors within your 'Navigator', as shown in the image below:
Source: MetaTrader 4 platform with the Admiral Markets Supreme Edition plugin installed - A Mini-Terminal order ticket for ETH/USD.
First we opened a chart for the ETH/USD, and then double clicked on Admiral – Mini Terminal to launch the EA. As you can see, this gives you a small order ticket. We then chose '1 lot' as the order size, and then by pressing 'CTRL' and then clicking in the S/L field (that is, the stop-loss field), we then opened up the S/L calculation dialogue box that you can see below the mini terminal in the image above.
This function allows you to specify the amount of risk you want to take on board with this this crypto position. You can define this as either as a flat amount in your account's base currency, or as a percentage of your account's free equity. The mini-terminal will then calculate the stop level for you that best matches your specified amount of risk.
Then, it's as simple as clicking 'Sell or Buy' to take a position in your chosen cryptocurrency CFD. Optionally, you can also set a take profit level and/or a trailing stop. So, once you have taken a position in the cryptocurrency of your choice, how do you then go about closing the position? There's more than one way to go about this. Let's first look at closing just part of the position:
Example: Partial Closing of an ETH/USD Position
Sometimes, it can be beneficial to reduce your exposure by closing off a portion of your open position. You might, for example, want to realise some profit on a winning position, or perhaps lighten your size on a losing trade. Either way, by partially closing, you retain some exposure to future price moves. When you have opened a position you will see lines marked on the relevant cryptocurrency chart that represent your trade, and any associated stop-loss or take profit orders.
Source: MetaTrader 4 platform with the Admiral Markets Supreme Edition plugin installed - A Partial close order ticket.
In this example, a 'Buy' trade was placed, and our position is shown with a green box. Had we chosen to sell, this would be a red box instead. Clicking in this box opens a web dialogue window which offers you a variety of options, such as to amend any stop-loss or take profit orders you may have. We clicked on 'Partial Close', and you can see in the image above the dialogue that this option presents. We entered 0.5 into the Volume field, which would allow you to close off half of the 1 lot open position.
Example: Total Closure of ETH/USD Position
Closing your whole position is no more complicated than making a partial closure. All you have to do is make sure that your trading size is the same as the open position, and then deal in the opposite direction. We originally bought 1 lot of the ETH/USD to open the position. To close this, we would need to sell 1 lot of the ETH/USD. Just as in the example above, traders could click on the green box that represents their open position and this time, just click on the red 'Close Order' button, without first clicking 'Partial Close'.
Source: MetaTrader 4 platform with the Admiral Markets Supreme Edition plugin installed - A trade confirmation box for ETH/USD.
An Easy Way to Get Started
So, now you've read about the different cryptocurrencies available to traders and how to trade them with CFDs, how do you take your first steps into the world of cryptocurrency CFD trading? Many people fall for trading crypto telegram scams which often send unprofitable signals to inexperienced traders. This is why many people ask: 'is crypto trading still profitable?'. The best way to find out is to start with a demo trading account. This allows you to explore the functionality of your chosen trading platform, and place orders on live cryptocurrency CFD prices, but without risking any money, until you feel confident enough to open a real position with a live trading account.
Trade Cryptocurrency CFDs With Admirals
Are you ready to join the growing cryptocurrency market? Admirals enables professional traders to trade 24 hours a day, 7 days a week with the EUR and crypto cross, as well as the ability to go long or short on any cryptocurrency CFDs, with no actual crypto assets required for trading. Trade CFDs on BTCEUR, ETHEUR, XRPEUR, BTCUSD, and many more! Click the banner below to open an account and start trading!
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”). Before making any investment decisions please pay close attention to the following:
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- The Analysis is prepared by an independent analyst (hereinafter “Author”) based on the NAME +(Position) personal estimations.
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