The downward trend (falling Bitcoin price) and the movement in the range do not allow physical holders to take advantage of fluctuations in the current Bitcoin price, as well as in other cryptocurrencies.
In addition, purchases in a downtrend or consolidation are often not the best choice. Therefore, anyone who wants to actively participate in the market and accumulate profits must turn to other financial derivatives such as contracts for difference.
Trading at a falling Bitcoin price can be key because it gives traders the opportunity to enter the market and accumulate profits when the long-term trend in the asset is downward. At the same time, those who own Bitcoin or another cryptocurrency accumulate losses and do not have many options in front of them.
Of course, it is good for investors to keep in mind that trends are always changing and not eternal. However, since at the moment the long-term upward trend in the price of Bitcoin seems to have remained far in the past, CFDs seem to be the best way to trade cryptocurrencies.
In addition, contracts for difference allow those who have a Bitcoin investment to hedge (insure) against a falling Bitcoin price. This can happen by opening a short position in Bitcoin CFDs.
Trading Bitcoin CFDs is probably not much different from trading any other currency pair, commodity or highly volatile CFDs that are building serious trends .
The interesting thing about the deals lies in their diversity and through studies of price movements, traders must be able to make profits that make them financially independent and stable.
Bitcoin CFD practitioners should focus on:
1. Following the trend
2. Proper capital and risk management
3. The main trading sessions: London, New York and Tokyo.
Proper money management is the holy grail of trading financial markets and Bitcoin and cryptocurrencies are no exception. If proper risk management is applied in a strong trend environment, a huge return on investment in Bitcoin can theoretically be generated.