Author - XBroker

Cryptocurrency Trading

What is Cryptocurrency?

Since Bitcoin was launched, cryptocurrencies have gone on to attract many investors and traders. Having emerged onto the scene only as far back as 2009, they remain a relatively new kind of digital currency and are designed to work as a medium of exchange. Cryptocurrencies are based on a peer-to-peer system which allows them to be completely decentralized and independent from any government or central banks. In this way, participants can exchange money directly with each other with much lower transaction times, minimal fees and without the involvement of third parties such as banks during the transaction process.

Cryptocurrencies use cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Hence, the term”crypto” refers to the use of cryptography for security and verification purposes while transactions are taking place.

Cryptocurrency transactions are generally conducted via a blockchain network, effectively a joint bookkeeping process. As blockchains are designed to be decentralized, every computer connected to the network must successfully confirm the transaction prior to being processed which establishes a safer transaction for all concerned.
Although being the first cryptocurrency to have emerged, Bitcoin is not the only digital currency on the market. There are a range of others which are growing in market share and value and are worth considering. Some of the top ranking coins today besides Bitcoin include Litecoin, Ethereum, XRP and EOS.

How to Trade Cryptocurrency

Trading any type of currency including cryptocurrencies involves exchanging a currency you own into another currency and exchanging it back when the price changes with the purpose of making a profit. This is known as forex trading and usually takes place using online platforms.
Since cryptocurrencies came onto the market, many forex brokers have started offering their clients the opportunity to trade cryptocurrencies via CFDs. Without ever directly buying or selling cryptocurrencies, with CFDs, you can still trade on their value. Cryptocurrency trading works in exactly the same way as forex, but rather than buying and selling fiat currencies such as US dollars or the Euro, traders buy and sell cryptocurrencies, such as Bitcoin, Ethereum (ETH) or Litecoin.

Traders interested in the cryptocurrency market can adopt either a long or short term trading strategy. Those adopting a long term strategy will buy and hold cryptocurrencies over a long period of time, either weeks, months or sometimes years. This gives them time to scrutinise price trends over a long period and make informed decisions while avoiding the impact of short-term dips in value. This is an ideal strategy for traders who believe the value of a cryptocurrency will grow steadily over a long period and wish to avoid the stress of short-term value dips.

With a short-term trading strategy, a trader forgoes the stability of long-term trading for the chance of profiting from short-term price swings and involves buying and selling cryptocurrencies in the space of a few hours to a few days.
This strategy is suited to those who prefer the characteristic volatility of cryptocurrencies by getting in and out of trades quickly.

Advantages of Cryptocurrency Trading

With XBroker, you can access a wide range of CFDs on cryptocurrencies such as Bitcoin, Ethereum and Litecoin which allows you to benefit from the difference in price between the opening and the closing price without actually owning the underlying asset. CFDs allow you to open and close your positions in an instant since you do not own the underlying digital currency.

Another advantage of trading cryptocurrencies is that you have the potential to profit from both rising and falling markets and can trade 24/7 wherever you are located, even on a mobile device. Furthermore, cryptocurrencies are great way to diversify your portfolio, especially if you are concerned for example, about central bank monetary policy decisions on fiat currencies.

It’s a well known fact that cryptocurrencies can be highly volatile but the upside is that you can find some big moves in a very short period of time. Traders make profits when the price of the currency shoots upwards and because cryptocurrencies often experience large price movements, you can often make a lot of profit with a relatively small outlay.

With cryptocurrency trading, the exchange platform you use deducts a small percentage as commission for the service it provides. As the fees for transferring cryptocurrencies, usually by wallet payments, are less than credit card and bank transfer fees, cryptocurrency trading fees come in cheaper than forex trading fees.

Why Trade Cryptocurrencies with XBroker?

There’s no doubt that cryptocurrencies are here to stay and will have an even bigger impact on the world’s financial system. More people are using it and more businesses are accepting it and this increase in demand is this reason why price has soared in recent years.

Whatever the size of your investment, XBroker offers a wide range of cryptocurrencies, so there’s something to meet everyone’s trading requirements. With XBroker, you are best placed to benefit from a wide range of cryptocurrencies which continue to reach a high-level market share such as Ethereum and Litecoin!

Trading cryptocurrencies with XBroker opens the door to a multitude of potential profit-making opportunities! Here’s what you get to help you along your way:

  • Traders Room: A place to manage your accounts.
  • XBroker Exchange: A Digital Asset Exchange that provides advanced financial services to global traders using blockchain technology.
  • MT5 Trading Platforms: Trade the instruments of your choice on XBroker MT5 available for both PC & MAC and mobile devices.
  • Social Trading: Follow the leaders and copy their trading activity or get rewards by allowing others to copy your trades!
  • MQL Trading Signals: Access to trading signals allows you to automatically copy the deals performed by other traders in real time.
  • Crypto Accounts: Crypto accounts are trading accounts nominated in cryptocurrencies, digital assets that work as a medium of exchange.
  • Crypto Wallets: Crypto wallets provide an easy way to send, transfer, exchange, store and receive Digital Currencies worldwide!
Read more...

Risk Management

Risk management in forex trading involves implementing certain strategies to control your trading risk. As trading can be risky, it is advisable for traders, especially for those just getting started, to limit their risk. This can be done in various ways such as limiting your trade lot size, ​knowing exactly when to take losses or by diversifying your risk by trading markets which are non-correlated i.e. those not impacted by the same events. Here are a some ground-rules:

Don’t Trade With Money You Can’t Afford to Lose

The most effective way to manage your forex risk is not to trade with money that you can’t afford to lose. Those new to trading often fail to take this into account, thinking large losses couldn’t happen to them, but as the experts will confirm, this can really affect your trading performance. Quite simply, if you trade with money you can’t afford to lose, you put yourself in a position where you could lose significantly. Sometimes, even just the thought of this occurring can affect your decision-making, causing mistakes to happen.

Trade In Accordance with your Account Balance

It is important not to get carried away with larger trades in the beginning. It is advisable therefore to make your trade sizes appropriate for your account balance. Trade what you feel you can safely trade with and steer away from opening large trades of, for example, requiring $50,000 margin with a $2,000 account. It is more important to make continuous smaller percentages rather than large ones, and a safer strategy too.

Using correct lot sizes is one of the most important risk management strategies you can use. While there is no exact science when it comes to using the correct lot size, certainly in the beginning at least, smaller is better.

Every trader will have their own tolerance level for risk and the best advice is to be as conservative as you can. It is important to understand the risk of using larger lots with a small account balance and that keeping a smaller lot size will allow you to stay flexible and manage your trades with logic rather than emotions.

Generally speaking, traders do not risk more than 1% – 2% of their total account equity on each trade. The whole concept of risk management is to stay in trading long enough to recover any losses.

Limit Your Losses

An excellent risk management tool is the use of stop losses i.e. knowing when to cut your losses on a trade. Because trades don’t always go the way you expect, you need a way to cut your losses. A good tactic is to set your stop where you know the trade will reach if you get it wrong with your trading strategy.

Stop-losses are one of the most important aspects of risk management and used correctly, can help reduce losses and protect the trader’s account from full exposure to the markets.

A stop-loss works whereby a trader closes the trade at a predefined price, usually when the trade is in a losing situation. Using a physical stop-loss helps traders clearly define the amount of risk or loss they are willing to tolerate. Stop-losses can also be moved while a trade is open to lock-in profits.

More experienced traders are also known to use mental stop-losses, a price level at which the trader decides he would rather get out of an open position. At this point, the trader will manually execute the trade. This type of stop-loss is best used by more experienced traders as less experienced traders could put their full account balance at risk.

Reward/Risk Ratio

The reward/risk ratio is an important concept in risk management as it will help determine a trader’s success or failure in trading. When a trader first sets out, losing trades will frequently outnumber winning trades according to a trader’s ability and strategy used, so to survive in forex trading it is vital that a healthy reward/risk ratio is maintained.

As a basic example, if a trader places a trade and decides to risk $500 and take profits of $500, this is a reward/risk ratio of 1:1. However, if you take into account that there may be more losing than winning trades, a reward/risk ratio of 1:1 will deplete your account very quickly. Working to a strategy of every second trade being successful i.e. a reward/risk ratio of 2:1 will keep your account balance growing thus 2:1 as a minimum is recommended. Higher reward/risk ratios tend to result in fewer wins but the profits will usually compensate for this.

Risk management is thus all about keeping your risk under control while making a profit at the same time. The more control you exercise, the more flexible you can be when the need arises. By limiting your risk, you ensure as much as possible that you can continue trading when things do not go according to plan. In summary, using effective risk management make all the difference towards becoming a successful forex trader.

Top Risk Management Tips:

  • Do not allow your trades to risk more than 2% of your account balance
  • Apply physical stop-losses rather than mental ones
  • Trail your stop-loss in the same direction of your open trade so as to lock in profits
  • Aim for a reward/risk ratio of at least 2:1 so that your potential reward exceeds the risk on every trade
  • Trade non-correlated markets i.e. those which are not impacted by the same events
Read more...

Why Trade Forex?

With huge daily trading volumes, forex trading is as popular as ever. The forex market is a highly liquid, global market and offers traders many advantages.

24 Hour Market. The Forex market is worldwide so you can trade when you choose, whenever the markets are open – 24 hours a day, five days a week.

Global Access. Anyone across the world can participate in the FX market which includes all world currencies.

High Liquidity. Liquidity is the ability of an asset to be converted into cash quickly and being able to move large amounts of money into and out of foreign currency with minimal price movement.

Low Transaction Costs. These are usually included in the price with Forex and are known as spreads. The spread is the difference between the buying and selling price.

Leverage. With forex trading, you can trade the market using leverage which is the opportunity to trade more money than what you have in your account.
For example, if you trade with 100:1 leverage, you could trade $100 on the market for every $1 that is in your account. This, in essence, means you would be able to control a trade of $100,000 with just $1,000 of your own capital.

Profit Potential. The Forex market has no restrictions regarding directional trading which means you can profit from both falling and rising currency pairs.

How Does Forex Trading Work?

Forex trading works by buying one currency and selling another at the same time. If the currency you buy increases in value against the currency you have sold, the position can be closed for a profit. Otherwise, you will make a loss. For example, take EUR/USD (Euro vs US dollar). A trader will seek to profit from the fluctuations in the exchange rate between these currencies. If they think that EUR will strengthen against the USD and buy EUR, they are also selling USD on the expectation that the exchange price will go up in value.

If their expectations are correct, the trader stands to make a profit. However, if proven wrong and EUR depreciates relative to USD, this will leave the trader with a loss.

Forex Basics

Newcomers to forex trading can find some of the new phrases and concepts a little tricky to master in the beginning. It is therefore important to be aware of at least some of the most basic ones before setting out to trade on a real account.

Lots

The size or volume of a trade is usually calculated in lots. It is a trading term used to describe the size of a trading position with reference to a standard of 100,000 units of the base currency in a forex trade.

Points, Pips & Ticks

Points, pips and ticks are terms used to describe changes in asset prices. Here is a further explanation:

Points
A point is the smallest price increment change that can occur on the left side of the decimal point. The fifth decimal place of most currencies and the third decimal place of the Japanese yen is called a point. Points give traders a more accurate indication of price movements and are a commonly used term amongst traders to refer to price changes in their chosen market.

Pips

A pip is is a very small measure of change in a currency pair in the forex market. Each pip is worth roughly one unit of the currency in which an account is denominated and is usually the fourth decimal place of the quote currency in a pair. Pips help traders calculate profit or loss in relation to the number of pips that a currency rises or falls, compared with the price at which it was bought or sold.

Ticks

As explained, a pip is the smallest increment by which a currency can change in value whereas a tick is the increment by which it actually occurs. A tick may be anywhere on the right side of the decimal point. How many ticks are in a point is determined by how many ticks it takes to increase the price on the left side of the decimal by one.

Spread

The spread is the difference between the buy and sell prices quoted for a forex pair and is traditionally denoted in pips.
Leverage

Leverage enables traders to enter into trades that exceeds the value of their initial investment and is expressed as a ratio.

Margin

Margin is the percentage of a trader’s account balance that is required to secure a position. The more leverage a trader uses, the less account balance is required as margin. Forex trading offers high leverage so that for an initial margin requirement a trader can accumulate and control a large amount of money.

Risk Management

Risk management can make all the difference when it comes to making a success of forex trading. Without the appropriate risk management in place, a trader can deploy the very best trading system but still go on to fail. Hence, once real money and emotions come in, risk management is very important.

Risk management involves the implementation of several strategies to control your trading risk. It can be done in various ways such as limiting your trade lot size, ​knowing exactly when to take losses or by diversifying your risk by trading markets which are non-correlated i.e. those not impacted by the same events.

Stop-Losses

An effective form of risk management is controlling your losses i.e. knowing when to cut your losses on a trade. Stop-losses are one of the most important aspects of risk management and are designed to reduce losses and protect the trader’s account from full exposure to the markets. A stop-loss closes the trade at a price defined by the trader, usually when the trade is in a losing situation. Using a physical stop-loss helps traders clearly define the amount of risk or loss they are willing to tolerate. Stop-losses can also be moved while a trade is open to lock-in profits.

More experienced traders are also known to use mental stop-losses, a price level at which the trader decides he would rather get out of an open position. At this point, the trader will manually execute the trade. This type of stop-loss is best used by more experienced traders as less experienced traders could put their full account balance at risk.

Use Correct Lot Sizes

There is no exact science when it comes to using the correct lot size, but in the beginning, smaller is better. Every trader will have their own tolerance level for risk and the best advice is to be as conservative as you can. It is important to understand the risk of using larger lots with a small account balance and that keeping a smaller lot size will allow you to stay flexible and manage your trades with logic rather than emotions. Generally speaking, traders do not risk more than 5% – 10% of their total account equity on each trade. The whole concept of risk management is to stay in trading long enough to recover any losses.

Reward/Risk Ratio

The reward/risk ratio is an important concept in risk management as it will help determine a trader’s success or failure in trading. When a trader first sets out, losing trades will frequently outnumber winning trades according to a trader’s ability and strategy used, so to survive in Forex trading it is vital that a healthy reward/risk ratio is maintained.

As a basic example, if a trader places a trade and decides to risk $500 and take profits of $500, this is a reward/risk ratio of 1:1. However, if you take into account that there may be more losing than winning trades, a reward/risk ratio of 1:1 will deplete your account very quickly. Working to a strategy of every second trade being successful i.e. a reward/risk ratio of 2:1 will keep your account balance growing thus 2:1 as a minimum is recommended. Higher reward/risk ratios tend to result in fewer wins but the profits will usually compensate for this.

Risk management is thus all about keeping your risk under control. The more control you exercise, the more flexible you can be when the need arises. By limiting your risk, you ensure as much as possible that you can continue trading when things do not go according to plan. Overall, using effective risk management make all the difference towards becoming a successful forex trader.

Read more...

Why XBroker?

Why Choose XBroker?

XBroker is a Digital Asset Exchange & Trading Platform for traders of all experience levels to trade digital currencies online. With its extensive industry knowledge, the company has established itself as one of the new-era cryptocurrency brokers offering a comprehensive range of services specifically geared for the expanding community crypto traders across the globe.

Cutting-Edge Technology

An impressive range of online trading choices and powerful trading platforms allow traders to build a portfolio suited to their individual needs. In this respect, XBroker Exchange offers the most popular Digital Assets & Cryptocurrencies, including Bitcoin, Ethereum, DASH, Litecoin, Ripple, NEO, Monero as well as many more.

XBroker aims to deliver the fastest and most secure trading experience possible to its clients. Traders have the opportunity to build a cryptocurrency trading portfolio and start trading quickly, easily and safely, anytime, anywhere. With a great 1:3 margin trading leverage and short sell options with fast deposits and withdrawals, XBroker is fast becoming a leading choice for cryptocurrency traders.

XBroker also offers a social trading system. With copy trading, investors can choose a manager from the rankings themselves and their investment account can be connected to more than one manager at a time. In addition, our MAM accounts which are ideal for regulated jurisdictions, allow traders to copy orders from multiple managers accounts to one investor.

Profit from the Cryptocurrency Trends

Evidence shows that the crypto industry continues its rapid growth and more and more traders want to be part of the crypto revolution. XBroker is proud to have welcomed a continually growing number of global clients who use our services to capitalise on the potentially high returns offered by cryptocurrency trading.

Open an account with XBroker and access our complete cryptocurrency trading solution for Web, Desktop, iOS including Android apps. With XBroker, we give you the tools you need to profit from financial markets, wherever and whenever you want!

Read more...