Nowadays, all sorts of cryptocurrencies are gaining popularity, so many traders add them to their list of assets for trading. And such virtual funds are used for price volatility in a market where they occupy certain positions, which are selected either through the exchange of allocated assets or through a broker offering contracts for difference (CFD).
At its core, trading operations conducted by a variety of assets or any cryptocurrency are almost indistinguishable. The difference is how the trader trades: regular or digital currency. Carefully read the data located below, you can see these differences.
Optimal Time To Trade Cryptocurrency
You can bid using the regular currency during the entire workweek. The decentralized currency Bitcoin is provided for trading all week, without a weekend. Thus, the trader can work with crypto currencies on specialized exchanges 24 hours a day on all days of the week. This is the main difference.
Now, many traders prefer to spend their activities precisely on weekends (from Monday to Friday they are engaged in basic work), using known cryptocurrency such as Ripple, Ethereum, Dogecoin, Dash, Litecoin in the financial markets.
Some of the brokerage companies also provide conditions for carrying out financial transactions with real currencies or shares during the weekend. Mostly, these are usually long-term contracts, the expiration time of which occurs not on the opening day of the position, but on any other day of the month or week.
Using The News To Trade
Traders who work with both conventional and virtual money, often conduct trading operations using the most important news of the economy and politics. This information is usually linked to the intervention of the Government and banking authorities, which, when inflation is to prevent deflationary risk, can change interest rates upwards in order to boost economic growth. Such a procedure would considerably strengthen the currency of the State, and the lowering of interest, on the contrary, can weaken it. So traders, based on the decisions taken by the central bank, will be able to purchase transactions and benefit from the growth or depreciation of the exchange rate.
Information related to virtual money can also have a significant impact on the exchange rate or its value. The significance of a cryptocurrency is usually determined by its prominence and universal recognition. Any solution, which prevents the use of such funds for shopping or business organization, may cause some concern among traders. This in the end will lead to a certain pressure on the market. For example, the recommendation NYFDS «BitLicense» (Resolution on the use of Bitcoin in one of the American states) has triggered an inappropriate response among traders. This circumstance forced some traders to sell with the help of an exchange and purchase a contract at a new price.
Something similar will happen with the strengthening of capital controls in the progressive or still only emerging economy, and it will create a fairly large demand. For example, when China began to slow economic processes, the state has introduced a variety of methods to control the movement of capital to limit their withdrawal from the country. This has greatly increased demand for cryptocurrency contracts.
Each type of virtual assets have distinctive features. For example, Litecoin has a direct interdependence with the US dollar, and Bitcoin has a small negative correlation with the US currency. Traders who know about it will quickly make a decision to make a deal.
Electronic money, which is thoroughly supported by its creators, is valued quite highly. For example, Ethereum in its functionality is not inferior to Bitcoin, and later, if it gains significant popularity, then this situation can not but affect the exchange rate of Bitcoin. Thus, the daily amount of virtual money is usually viewed by traders so that they can consider prevailing trends that will be useful for the trading of cryptocurrency in the future.
Supply and demand for virtual money exchange rate determined by both real and electronic currency. But the demand for Bitcoin and other types of such money is never created artificially. At the same time, some positive information can encourage traders to purchase cryptocurrency through the Internet.