Crypto Academy Week 10 - Homework Post for @kouba01

in hive-108451 •  last year  (edited)

Hello everyone i am @okoyejoshua and i am here to answer this homework given to us by @kouba01 after his lecture which he lectured about CFDs if you want to check it out click here

Home work Task

What is a cryptocurrency CFD?
How do I know if cryptocurrency CFDs are suitable for my trading strategy?
Are CFDs risky financial products?
Do all brokers offer cryptocurrency CFDs?
Explain how you can trade with cryptocurrency CFDs on one of the brokers (Using a demo account).

Question and Answers

1). What is a Cryptocurrency CFD?

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Source

A CFD is the difference in value of an asset between the point to which the contract is open and when it is closed, this enables you to speculate on price movement on financial markets without buying or selling any underlying asset, you can trade CFDs on indices, shares, forex pairs, commodities, cryptocurrencies and many more.

Cryptocurrency CFD can be define as a contract by which the price of crypto currency is exchanged depending on whether the value of that currency rise or fall.

2).How do I know if cryptocurrency CFDs are suitable for my trading strategy?

If you are a trader and you have the following features then CFDs are suitable for your trading strategy.

  • There is always going to be corrections in the crypto market so if you loss you have to accept it and learn how to control your emotions.

  • you need to be able to read charts so that you can have a 90% chance of knowing the next price target.

  • you must really educate your self about leverage and margin so that you don't loose every thing.

3). Are CFDs Risky Financial.

In investment there is no 100% save investment because there is risk in every investment but just that some of them are very risky just like CFDs and the reason is because the price can fluctuate anytime which can lead to big loss or big profit and in CFDs we use margin and leverage so the risk is even higher.

4). Do all brokers offer cryptocurrency CFDs?

I don't think all brokers offer CFD but i know some brokers who offer contracts and i will explain 2 of them.

1). ETORO
Etoro is one of the top-rated cryptocurrency brokers which is directed by CySEC, ASIC, and the FCA. It incorporates Ethereum, Ripple, Bitcoin and Dash, and 13 more cryptocurrencies.

2). Bybit
Bybit is a cryptocurrency trading platform, they offer contracts which can be traded with leverage it includes Bitcoin, Ripple, Ethereum and litcoin.

5). Explain how you can trade with cryptocurrency CFDs on one of the brokers (Using a demo account).

I will be explain on how you can trade on one of the listed broker above which is Etoro.

  • first of all create and login to your Etoro
  • secondly make sure it is in virtual mode.

Screenshot_20210422-181044.png

  • After you must have do that you can now trade with demo money as you can see i bought Ada of $50000.

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  • if the price goes up then i will make profit.

Conclusion
I will advice you don't do this CFDs as a newbie because if you loose it is going to be a big loss anyway thanks for reading.

Thanks for taking your time to analyze my article @okoyejoshua

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Hello @okoyejoshua,
Thank you for participating in the 2nd Week Crypto Course in its second season and for your efforts to complete the suggested tasks, you deserve a 6/10 rating, according to the following scale:

OriginalityCompliance with topicConsistency of methodQuality of analysisClarity of structure & language
(0/2)
(2/2)
(1/2)
(1/2)
(2/2)

My review :

Acceptable content in which you were able to respond briefly to the questions asked. What I wanted that you added was a little analysis of the insights you provided, and it was also possible to try another CFD broker, so we could benefit from multiple experiences.

Thanks again for your effort, and we look forward to reading your next work.
Sincerely,@kouba01