Investing in the cryptocoin market has certainly become one of the most rewarding opportunities in the recent times and trading Ethereum CFD is one of the best way among them. Like every virtual currency, Ethereum has already been able to record several hundred percent of fluctuations within weeks.
One of the best ways to make money with ethereum is to do it through trading using an online CFD broker. In this article we will see how to negotiate with Ethereum in Plus500 (CFD Service), one of the best online brokers of CFDs and probably the one that offers the platform of trading more intuitive and simple to handle. Plus500 becomes the first forex broker to be offering Ethereum CFD on its electronic trading platform alongside with Bitcoin.
What the heck is CFD ?
A CFD, is an contract between two parties to change the difference relating to the opening price along with closing price of the contract. CFDs are derivatives products that allow you to trade on live market price movements without actually owning the underlying instrument on what your contract is reliant.
You can use CFDs to speculate on the upcoming movement of market prices irrespective of whether the underlying marketplaces are rising or maybe falling. You can easily go short (sell), permitting you to profit from plummeting prices, or hedge ones portfolio to canceled out any potential damage in value of the physical investments.
CFDs are generally leveraged products, enabling you to help trade by paying just a part of the total value with the contract. This means you can potentially magnify your return on investment. Remember, however, that higher leverage can result in losses that could possibly exceed your preliminary deposit. If you are new to CFD and still confused about the basic terms of CFD trading then check our previous post to Learn The Basics Of CFD Trading.
How To Trade Ethereum CFD With Plus500
Step One : Register for an account on Plus500.com
Before trading, you’ll need to create a Plus500 account (Click Here). On the homepage, click “Start Trading” in the navigation menu near the top of the page. This will bring up a page that asks you to Download or using Web Trader. Or you can also direct download the trading client (Click Here).
The next page will be the login page for accessing your account after registration. First, click “New User” and enter your email address, desired username, and password.
Step 2 : Verify your account
Plus500 will send a verification link to your email address. Open your mail and click this link to verify your email address.
Then verify your phone number to get a £20 bonus. The link for this will be at the top right corner of the Web Trader screen, below your email address. When you click this, you will be asked for your name, address and phone number and a few questions about your experience trading different financial instruments.
After this, you be asked for a phone number to verify. If you enter a mobile number, you’ll be sent a verification number by text message. If it’s a landline, the computer will phone you and tell you the number. Enter this code in box, and your account will immediately be credited £20 that you can use for trading.
Step 3 : Place ETH/USD trade
When signed in, you can simply click the “Forex” link in the left navigation menu. On the page that opens, click on the link “Virtual” which will bring up a screen with all of the Virtual Forex pairs than can be traded at Plus500. Where you will see Bitcoin and Ethereum Daily, click on your desired pair to bring up the price info, charts, and trading screen.
Note: Keep in mind the expiry date for trades, which is the date and time that positions will automatically be closed due to the nature of contracts for difference.. ETH/USD positions are closed automatically closed at 8:00 PM each day.
Step 4 : Place an order
After some due diligence, you should feel prepared to start trading. After choosing either ETH/USD or BTC/USD, you will be brought to a screen that shows the price at which you can buy or sell the CFD; with a difference of about 2% between them. Underneath the prices is valuable information you should familiarize yourself with and keep in mind when considering whether or not to place a trade.
In easy words : If you think price will go down, place your bet on falling price and Click on the “Short” button to enter the details of your trade. If you think price will go up, click on “Buy” button and enter the details of your trade.
You will be given the opportunity on this page to set either a market or limit order, set a profit-take and stop-loss price, and to allocate the amount of leverage you will use in the trade. In a market order, you agree to buy or sell at the current market price while a limit order allows you set a price that you are willing to buy or sell at and, if the market ever reaches it, your order will be executed. Profit-take and stop-loss prices are basically exactly as they sound: prices that close your trade if they reach a certain level of profit or loss to protect your from losing your gains or furthering your losses.
As you can see the above screenshot, Here i placed 100 Ethereum buy order when current price was $87.66, i also put a stop profit @ $89.85 and stop loss @ $85.47, now if Ethereum price crosses $89.85 level i’ll get €199.46 in profit, just in case market react opposite and price go downwards, my stop loss will be active and automatically cancels my order @ $85.47 with a total loss of €199.46.
The most important parameters are:
- Stop loss: the stop loss you need to avoid losing more money than you are willing to risk for a trading operation. Set a stop loss allows you to stop investing to a certain quota, this in a completely automatic.
- Stop limit: the stop limit is a limit to profits, that is, choose a share in profit where your trade should close automatically. This should be done only when you already know that, with a good chance, the asset does not push above this level, otherwise it is always best a stop-loss variable.
Note : While we all hope that we’re going to profit from every trade, it just won’t happen. Always remember that by trading CFDs customers can lose all the funds deposited. Please be aware of the risks involved. Plus500 is suitable for experienced traders and not for beginners. If you are newbie then you can try first with demo money too.
Benefits of using Plus500
- Fast and easy.
- Brokers regulated by government.
- Trades evaluated on margin.
- Leverage is used in Trades.
- No risk of positions loosing.
- UK government guarantees up to £50,000 deposit.
- Complete customer care and technical support.
- Risk of fraudulent transactions is minimum.
Disadvantages of Plus500
- Actual Bitcoins are not owned.
- Brokers permitted a small margin for every trade