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How to Invest in Ethereum CFD (Advices from Successful Investors)

2022-07-25

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After the cryptocurrencies experienced a collective slump in the first half of the year, the prices of various virtual currencies in the market have gradually stabilized until July this year. Among them, ether is the most prominent, and the market value of ether currently accounts for 18.7% of the market value of all cryptocurrencies, which is also the highest point since May this year.

At the same time, under the promotion of Toyota, BP, Microsoft and other companies, Ethereum has also successfully carried out crowdfunding again. Now a lot of people like to talk about ether, but not trade it. Therefore, in this article, we will introduce investors to the relevant information of trading Ethereum CFDs, and share some of the opinions of currency analysts on Ethereum.

What are Ethereum CFDs

CFDs are a kind of financial derivatives born in London in 1990 - investors need to allocate a specific amount (margin) for a certain type of asset, and when investors sell the contract, they make profits according to the price of the asset when they are sold. During the process, the institution will charge the spread of the transaction.

For example: Dang I got some good news about ether, and judged that ether would rise in the next week, so I bought CFDs for long ether from institutions. As long as the market is as I want, I can make a profit , otherwise I will bear the loss.

Ether CFDs include long and short contracts. In essence, as long as the market fluctuates, investors will profit. Unlike the stock market, profits can only be made if the stocks purchased rise.

The process of trading Ethereum CFDs

Ready to trade tools

If you like to use a computer to operate, you can choose to download MetaTrade4. If you are more interested in the convenience of mobile devices, you can download the application developed by the exchange. Currently in Taiwan, we recommend trading on CM Trade. Compared with other institutions, CM Trade There are not only formal institutions for supervision, but also the most timely market information to help investors judge trading opportunities.

Create your own trading plan

There are several important indicators for formulating a trading plan: objectives, risk assessment, market research, and rate of return calculation.

Investors first consider what they want to achieve, and can set daily, weekly and monthly goals. Second, investors should understand the markets they are trading in, such as the ether market, and study them carefully (history, price influencers, etc.). The best thing to do is to identify how much risk you can take and determine how much reward those risks can bring you.

Stick to your plan

If you have determined a goal, please implement it strictly, and don’t be greedy or take chances. Also, it is necessary for you to know all the news and analysis about the market (Ether) before you start trading. You can register as a CM Trade member, and we will provide investors with analyst-level reports and opinions. In addition, CM Trade has a pending order function to help you sell ether at your psychological price.

start trading

After you're ready to work on your appeal, you can start preparing your own deal.

How to trade Ethereum CFDs with MetaTrader4

If you are accustomed to using computer software, then MT4 will be a trading tool that you cannot avoid. It is very simple to use MT4 to trade Ethereum contracts. You only need to download the MT4 software, register a new account and log in, and open the affiliate currency chart (ETH/ USD) to start trading.

Trade Ethereum CFDs with CM Trade

If you are trading on CM Trade, you need to register as a user on the CM Trade official website, and then download the CM Trade APP. Simply search for Ether in the APP and open its ticket. Choose your trade size, set any stops or limits, then click "Buy" to open a long position, or "Sell" to open a short position, and the trade is complete.

How to Calculate Margin on Ethereum CFDs

Calculation of margin: required margin = margin percentage x full notional value. For example, if I trade $20,000 in ETH (full notional value) via CFD and the CFD provider sets a 10% margin, you need $2,000 margin in your trading account.

The cost of trading Ethereum CFDs

The spread is the transaction cost of trading CFDs. The calculation of the spread is: point value = (one point / exchange rate) * lot size. For example, I bought 100 lots of ether, a spread provided by the institution is: 100, and when I sell ether, the price of ETH/USD is $1580.2, then I need to pay $6.328=(100/1580.2)* 100.

Advice for trading Ethereum CFDs

Source: Pinterest

Technical trading and proven tools should be used when trading Ether. This is the basis that investors need to learn before investing. CM Trade is a government-regulated trading institution that can be used as a tool for investors to invest in Ether CFDs. So I'll briefly touch on some technical trading advice.

In CFDs, a common type of technical trading method is scalping.

In general, most traders use the 1 to 15 minute timeframe for scalping, and the acceptable profit or loss per trade will depend on the timeframe you use. With a 1 minute scalper, you might be looking for a profit of around 5 pips per trade, while a 5 minute scalper might give you a realistic target of 10 pips per trade.

How to Profit with Ethereum CFDs

Above we have introduced the investment process, trading principles and costs of Ethereum CFDs, as well as some trading suggestions. So is there a 100% profit trick? I don't think anyone would make such a guarantee.

However, we can conclude that a failed investor often does not manage money effectively, and proper money management should theoretically lead to a huge return on investment. Losses can also occur due to huge volatility.

Therefore, it is very important to use proper capital management. CM Trade provides 24-hour reporting information during major market hours, and the same pending orders can help investors manage risks and reduce losses.

Of course, tools are only a small part of investors' profits. If you want to make profits in the market, you must continue to study and research, exercise your mind, and rationally face market changes. These are the main factors for long-term profits.

Summarize

If you want to trade Ethereum without having to worry about the wallet and network security associated with the crypto asset, I believe Ethereum CFDs are a great option. At the same time, CFD trading is not for everyone, and if you live in a country that bans CFD trading, you can naturally choose other alternatives.

For example, it is banned in the United States, but is allowed in countries such as Taiwan, Thailand, and Indonesia. Before creating an account, please check the laws of your country to ensure that your transactions are protected by the law.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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