In Thailand, the public is increasingly interested in trading Bitcoin. By mid-2020, the government had approved 13 cryptocurrency service providers. These exchanges, brokers, and dealers are now operating lawfully. However, Bitcoin trading still faces certain challenges that should be resolved in the future. The best way to avoid them is to trade without a digital wallet.
The Challenges of Bitcoin Trading
Owners of bitcoins trade them through formal exchanges, semi-formal systems or fragmented groups that work via messengers. Therefore, liquidity provision is not homogeneous, and regulators need to make efforts to unify it.
Bitcoin trading, particularly beyond formal exchanges, is associated with data leaks and other security risks. Today, the only way to trade cryptocurrency without wallets is through special derivatives offered by licensed forex trading brokers.
These instruments allow you to profit from the cryptocurrency market without owning any coins. All you need is sharp foresight, so you can predict market trends. There are CFDs on Bitcoin, Ripple, Ethereum, and other altcoins.
How CFDs Work
A contract for difference is an agreement between the client and the broker. Its subject is price direction for a certain instrument. Different assets may serve as underlying assets, from currencies to commodities. Bitcoin CFDs are extremely popular, as they allow you to benefit from the coins without buying them.
Even if you know nothing about derivatives, you have probably heard of futures. These securities are traded on the stock exchange, and they are linked to physical barrels of crude oil that must be delivered by a certain date. However, traders do not intend to buy those barrels.
Instead, they focus on short-term changes in the market, selling and buying futures quickly. Their profit is the difference between the prices for sellers and buyers. CFDs function similarly, but they are even more accessible. Their value changes along with the price for the underlying asset. Traders profit from the difference between their entry and exit.
What’s more, these are leveraged financial instruments. This means you may open positions worth more than your deposit. The broker lends a portion of their funds according to a special ratio, while your funds are referred to as ‘margin’.
Where to Begin
You may open a CFD account online through a global regulated broker like AvaTrade. There is no hassle. The company will ask you to upload a few documents, and you are all set. Education is also completely free, and you can practise with zero risks if you open a demo account. All CFDs are bought and sold via cutting-edge platforms (e.g., MetaTrader 4) and even mobile apps (e.g., FXTM Trader and Tezos ico recovery).
All CFDs are bought and sold via cutting-edge platforms (e.g., MetaTrader 5) and even mobile apps (e.g., FXTM Trader and Tezos ico recovery). This means you can make money on the go, wherever you are. Just use your tablet or smartphone to access live quotes and make profitable decisions that will help you grow your wealth.
Pros and Cons
For instance, if the margin requirement is 1 to 100, you may open a position for CFDs worth $100,000 when there is just $1,000 in your account. This boosts potential profit, as you trade with higher volumes than you could otherwise afford.
On the other hand, high volume translates into higher risks. Traders need to be extra cautious when they deal with highly leveraged instruments. This is why responsible brokers stress the importance of sound trading strategies.
Importance of Risk management
CFD trading eliminates typical risks associated with the exchange of Bitcoin. You do not have to worry about security, and powerful VPS systems will protect your trades from technical glitches or power outages. However, the market itself presents a specific cluster of risks that must be dealt with.
First, cryptocurrencies are highly volatile. This is part of their appeal: short-term price changes can be substantial. This means traders can make high profits faster than from more stable assets. However, they may also lose more.
These threats are familiar to any FX trader. Market supply and demand are beyond anyone’s control. Trading CFDs through a regulated broker eliminates security concerns.
However, you need to have a thoughtful risk management strategy in place. Always protect what you have, and risk up to 1% of capital per trade. Avoid leverage until you gain sufficient experience.
Trading Without Wallets in 2021
Investment in Bitcoins is trendy, as their value is so volatile. However, getting them and selling is a pain in the neck. Bitcoin exchanges have many requirements and restrictions. Why bother, when you can profit from the same market indirectly via derivatives?