Understand the risks and awards of trading in term in cryptocurrency
While the cryptocurrency world continues to grow, it is essential for investors to understand the risks and awards of trading in the long term. Term trading implies the purchase or sale of assets with a predetermined expiration date, providing a means of covering yourself against market volatility and speculating on price movements.
What is trading in the long term?
Term trading in cryptocurrencies can be carried out via various platforms, including online brokerage houses, scholarships and trading software. These platforms allow users to buy and sell cryptocurrency term contracts, which are essentially betting on the future value of a specific cryptocurrency pair.
Types of cryptocurrency term contracts
There are several types of available cryptocurrency contracts available:
- Trading spot : This involves buying or selling cryptocurrencies with their current market prices.
- Contract in the long term : This is a bet on the future price movement of a specific cryptocurrency pair, generally with an expiration date in the future (for example, 30 days).
- Options contracts : These imply the purchase or sale of contracts which give the buyer the right to buy or sell a title at a specified price.
Risks of term negotiation
Although long -term trading can offer profits, there are several risks associated with this investment:
- Volatility of the market : The prices of cryptocurrencies can fluctuate quickly and unpredictably, which makes it difficult to predict future price movements.
- Risk of leverage
: Towol contracts often involve a lever effect, which means that investors can control a larger position with a smaller amount of capital.
- Risk of counterpart : the risk of defect by the counterpart (the other party involved in the trade) can cause significant losses.
- Competition and market manipulation : The cryptocurrency markets are very competitive, and market manipulation is common, which can cause manipulated prices and a reduction in commercial volume.
Term trading rewards
Despite the risks, long -term trading can also offer profits:
- Cover against volatility : By buying or selling contracts in the long term, investors can cover themselves against the drop in potential prices of their cryptocurrency assets.
- Speculation opportunities : Term trading allows investors to speculate on future price movements and take advantage of trends or models.
- Diversification advantages : Commercial term contracts can provide a diversification advantage by allowing investors to allocate capital to different asset classes, by reducing the overall risk of portfolio.
Key considerations for beginners
If you are considering trade in cryptocurrency, it is essential to keep in mind the following:
- Educate yourself : Discover the basics of trading in the long term and how they work.
- Understand the risks of leverage : Be aware of the risks associated with the leverage and understand how to manage your exposure.
- Choose a reliable platform : Select a renowned stock market or brokerage company that provides secure, reliable and transparent trading platforms.
- Define realistic expectations : Do not expect profits overnight; Term trading is a long -term investment strategy.
Regulatory environment
The regulatory environment for the term trading of cryptocurrencies evolves quickly:
- SEC SUCK : The American Commission for Securities and Exchange (SEC) has implemented regulations on the derivatives of cryptocurrencies, including term contracts.
- Commodity Futures Trading Commission (CFTC) : The CFTC regulates the term markets in the United States.
Conclusion
Term trading in cryptocurrency offers both rewards and risks. It is essential for investors to achieve, understand the risks involved and set realistic expectations.
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