Bitcoin trading on the Forex
Yes, the crypt is an absolutely amazing asset, which at the very beginning was considered as a technology of calculations with an anonymous algorithm of work. But its attractiveness as an innovative currency led to the transformation of information technology into a financial tool that allows users to earn fantastic money.
Bitcoin is a non-standard tool not only in terms of its algorithm of work, but also in the matter of earnings on this asset. For earning in the crypto-currency market, there are many specialized approaches and techniques that allow you to receive income in a variety of receptions and formats.
Today we will try to understand the intricacies of classical speculation, such as bitcoin trading on the Forex market.
Here we propose to understand the immediate algorithm of the work of the crypto currency, the subtleties of the exchange rate of electronic coins and the factor of influence on this market, and also consider practical methods of market analysis and recommendations for increasing the efficiency of traders in this trading regime.
What is Bitcoin?
In simple terms, Bitcoin is not exactly a currency, it is a technology for calculating and or an instant, anonymous transfer of funds online. In fact, the coin of the crypto currency is a piece of computer code, in which the data of all transactions of the system are recorded. Thus, when users talk about buying Bitcoin, they mean that they have received a code on their computer or a specialized purse that displays the cryptonym.
The popularity of an electronic coin among users is explained quite simply. This coin is a decentralized calculation tool, that is, there is no single center for managing or regulating Bitcoin, and of course no state or private organization can limit or regulate the coin's work in the system.
The second factor of popularity is a limited currency issue: a maximum of 21 million coins. That is, limiting the mass of currency in the market makes it the most inflation-protected tool. Thirdly, the anonymity of settlements - by conducting operations with Bitcoin, you can be sure that your transactions, regardless of the amount of their number and the geographical location of the transfer of funds, will not be tracked by official authorities, including tax authorities. For these reasons, investors began to actively consider Bitcoin as an investment tool with high liquidity and a level of capital protection.
But in the positive moments of the crypto currency, you can find several negative factors - for example, huge financial risks. The lack of regulation and the fantastic level of volatility in the crypt market can lead an investor to a rapid loss of capital.
In addition, the active development of crypto technologies has attracted the attention of the government of the majority of states that are looking for ways and means of regulating these currencies - this is a negative factor for the impact on asset quotes and further increases the risk of collapse of quotes of electronic coins.
But, despite this, Bitcoin is actively used by investors as an instrument of direct investment of funds, and as a trading asset for trading on Forex, which we will now talk about in more detail.
Bitcoins Forex trading
Forex market operators began to actively include crypto-currencies in the listing of their assets about 3 years ago, when the capitalization of crypto-moneys began to grow at a rapid pace, and customers of trading platforms began actively switching to specialized crypto-exchanges.
Today, the bulk of Forex brokers make it possible to carry out SFD speculative transactions with contracts on such assets and in honesty for Bitcoin. Bitcoin coins are not only a specific means of calculation, but also an extremely interesting trading tool.
Market participants in trading on crypto currency should know that there is a very specific mode of exchange rate, based on the principle of perceived value for investors. In simple words, here the price of a crypto currency as a financial asset does not depend on the issue, inflation or restrictions of financial regulators.
Bitcoin's price reflects the level of the value of the asset that investors are willing to pay at a particular moment. That is, if tomorrow Bitcoin becomes not interesting for any reasons, it will simply acquire zero value in an instant (by the way, this causes many experts to fear in terms of investing large investment capitals).
Against this background, trade in the crypto currency is rarely used classical trading strategies. They just do not work here. To correctly predict the market of electronic coins, you need to understand the main drivers of influence on its rate formation. Here we offer a set of key indicators: