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Beginner's Guide: How to choose the ETH trading platform and make money with Ethereum CFD ?

2022-08-01
2144
Even if the price of ether plummets, you can make money. Is there such a good thing?

In recent years, with the rapid popularity of the NFT market, Ethereum has become the second largest virtual currency under Bitcoin, triggering an investment boom. However, many people see that the volatility of ether is very volatile, especially after the skyrocketing rise in 2021, it is currently on a downward trend, which is prohibitive.

This article tells you how to make money with ether contracts and how to make money even when ether goes down.

Ether vs. Ether Contracts, what's the difference?




Source: Pixabay ( Peter Patel )

Whether you are a novice or a veteran, the goal of all investors is the same, to make as much money as possible. There are two ways to invest in ether:

  • buy and hold ether
According to the current trend of ETH, each ETH is currently $1,000-1,600. The purchased ether will be stored in your virtual wallet, and you can only profit by waiting for the market price to rise, and there is a risk of being stolen by hackers.

  • Open an Ethereum contract on CM Trade
Alternatively, you can also enter the market with a lower threshold, such as investing in an ether contract of $150, and you can freely choose to go long or short. No matter whether ETH rises or falls, there is a chance to make a profit.

For example: Suppose at the end of last year, you bought 1 ETH at a market price of $4,500 when the virtual currency market was booming according to the trend of the ether exchange rate at that time. Within a month, this investment would evaporate 40% in an instant when the value of the currency fell. , and then down to the current $1,500, a loss of $3,000.

But if you invest in contracts, your losses will be limited to a maximum of $150. Even if you timed it right and used your leverage correctly, you could potentially make a whopping $3,000 while everyone else is being ripped off.

How to make money with Ethereum contracts?


In fact, ether contracts, like other foreign exchange or futures contracts, are a speculative tool that earns the middle spread.

And ether, like all cryptocurrencies, has a very high price volatility and can crash in a few days or even minutes, but if you're playing a contract, it means you don't have to actually own the currency itself, but rely on Bet on the direction of the ether price and profit from the difference.

The volatility of cryptocurrencies is one of the key factors contributing to the growing popularity of Ethereum CFDs or other virtual currency contracts, as traditional forex traders find that they can use this investment tool to quickly exchange for one day to the benefit of a huge spread.

What should I pay attention to when playing Ethereum contracts?


As with any speculative form of trading, there are always risks, so what should you pay attention to when playing Ethereum CFDs compared to other investment trading tools?

  • spread
Transactions in the traditional market face various handling fees, regulations, commissions and higher capital requirements, while CFDs have fewer rules, mainly because the cost of the spread will reduce trading profits. Therefore, when investing in Ethereum CFDs, you should try to choose the lowest price. Spread platform.

  • volatility
Unlike traditional financial markets, the volatility of cryptocurrencies can be triggered by almost anything, especially market news and public opinion trends, such as a tweet by Elon Musk, can make cryptocurrencies shine, and therefore short-term investments such as ether The currency contract needs to be fast, ruthless, and accurate. When the wind direction changes slightly, it is a good time for you to enter or exit the market.

  • Ethereum blockchain development
Ethereum CFD traders should also keep an eye on news from the blockchain itself, including climate change, the environmental impact of mining, security, privacy, transaction fees, and Ethereum upgrades and mergers. To be a successful cryptocurrency trader, you should have an in-depth understanding of how Ethereum works, as the development of blockchain technology is an important factor driving the price of Ethereum.



Source: Pixabay (WorldSpectrum)

How to choose an Ethereum contract trading platform


  • 24/7 trading available
As mentioned earlier, short-term trading will turn the rudder when it sees the wind. Don’t miss the opportunity to invest because of different time zones. For example, in the evening time in Taiwan, it is the daytime in the European and American markets. Any news that can affect the currency price It may appear during the closing time in Taiwan, so choose a platform like CM Trade that can trade 24 hours a day.

  • High security
Out of the investment, of course, safety is the most important! Choosing a platform for independent depository of margin deposits can protect the security of client funds and data, which is the basic premise of investment profit. CM Trade uses high-level encryption technology and is certified by authoritative organizations. It configures a unique quotation serial number for each price and displays it. On every transaction order, it is safe and convenient.

  • Diversified investment and transaction methods
The investment market often affects the whole body, and even the cunning rabbit has three caves. Therefore, it is a good platform to allow your funds to have multiple combinations of investment methods, so you can choose CM Trade in addition to cryptocurrency transactions. In addition, there are platforms for up to 32 popular trading products such as foreign exchange, precious metals, crude oil, etc., allowing you to freely plan your investment portfolio.



Source: Pixabay (WorldSpectrum)

Ethereum Contract Trading FAQ


  • Are ETH contracts trading at the same price as the actual ETH price?
Because CFDs are derivatives, brokers who trade cryptocurrency CFDs will generally charge a mark on the spread. For example, assuming the actual ETH traded at $2,440, you might see an Ethereum CFD at $2,450.

The price of ETH can vary from exchange to exchange, but the difference is not that big and ranges around a few dollars.

  • What are the investment analysis methods for Ethereum contract trading?
Since Ethereum also has a price history of about six years now, most technical indicators are valid, and it is also appropriate to use the general technical analysis research used when trading Forex, stocks or stock CFDs.

  • How to calculate the profit and loss of the Ethereum contract?
On CM Trade, the profit and loss method is generated according to the following formula:

Total profit and loss = (selling price – buying price) x contract unit x trading lot ± overnight interest

In addition, if the position is closed on the day of opening, there is no need to pay the overnight interest; the actual overnight interest is mainly based on the actual transaction; if the order is placed through the CM Trade platform, no commission will be charged.

In conclusion


Ethereum CFDs can be bought up or down. If the direction is correct, you can earn the middle price difference without worrying about whether the value of ETH in the wallet is constantly losing, because CFD trading does not require actual possession of tokens own ownership.

If you are looking for a highly volatile market then Ethereum contracts are the place for you. Of course, higher volatility also brings higher risk.

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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