Compare The Best Cryptocurrency Trading Platforms
If you are looking for a new cryptocurrency trading platform but do not know where to start, you’re in the right place!
A cryptocurrency trading platform can be used to speculate on the price movement of cryptos like Bitcoin, Litecoin and Ripple without actually owning the digital currency.
By reading this page, you will learn more about;
- The important features to consider when looking for a crypto trading platform.
- The benefits & risks of using a crypto CFD platform.
- How to start trading crypto CFDs.
- Why trading with a regulated crypto broker is critical.
Recommended CFD Cryptocurrency Trading Platforms:
Simple Trading Platform
Litecoin, Monero, NEO, Stellar, TRON
Low Trading Costs
Ether, Dash & Litecoin
Cash, Litecoin & Ripple
Critical Factors To Consider When Choosing a Crypto Trading Platform
There are plenty of factors to consider when looking to choose a crypto trading platform. The costs involved, accessibility, ease of use, technology, range of markets, reputation, regulation, plus more. Below are some key factors to consider when looking to choose the best cryptocurrency trading platform.
1. Spread and Commission Costs
The cost of trading is one of, if not, the most important factor when comparing crypto trading platforms. Put simply; the lower your trading costs – the better chance you have of making a trading profit.
- Spread costs – the spread is the difference between the bid and offer (buy & sell) price. The wider the spread, the more a platform is charging you to trade. Reversed – the ‘tighter‘ the spread, the less you are being charged. You should research the spread charges of a broker before opening an account with them as they can differ significantly.
- Commission – commissions are usually only applied to stock trades which means cryptocurrency trades should be excluded from a commission charge. Please check with your broker of choice before you open an account and trade.
2. The Trading Platform
There are a large number of crypto trading platforms available that allow you to trade cryptocurrencies. No two trading platforms are the same so it’s important that you trial a few different trading platforms to get a feel for each one. Only then can you decide which one you prefer.
Please also ensure that you like their mobile trading app too (check the broker actually has an App!) as it may differ from the web-based platform.
3. Is the Broker Regulated?
If a CFD broker is not regulated then you should not use them as a crypto broker. Put simply: do not trade with a broker that is not regulated.
Using a cryptocurrency platform that is fully-regulated has many advantages; including that a broker will be closely monitored by a governing regulator (i.e. the FCA) in accordance with local laws and regulations.
4. Range of Cryptos Available
Not all brokers will have the markets you want to trade, especially when it comes to cryptocurrencies. In fact some brokers do not even offer crypto trading so please check that your desired trading platform actually offers cryptocurrency trading. The three brokers in the table above all offer crypto CFD trading.
What Are The Benefits Of Trading Cryptos?
- Enter BUY and SELL crypto tradesOne of the major advantages of trading cryptocurrencies via a CFD trading platform is that you can ‘go long’ (a buy trade) as well as ‘go short‘ (a sell trade). For example, if you think the price of Ripple will decline in value – then you can open a SELL trade. If, after opening the trade, the price of Ripple does decline in value, you will make a profit on that particular trade.
- Speculating rather than owningWhen trading cryptocurrencies via a cryptocurrency trading platform you are simply speculating on the price movement of the cryptocurrency and do not own the actual digital currency itself. Because you do not actually own the digital currency you do not have to worry about ownership costs and trying to sell it.
- Volatility if you have a high risk toleranceTraders love trading cryptocurrencies like Bitcoin and Ripple via a CFD platform because they can be significantly volatile instruments to trade, which means profits (and losses!) can be made extremely quickly.
The Risks Of Trading Cryptocurrencies
You can lose a lot of money.
Make no mistake about it – online trading is risky at the best of times. But cryptos are extremely risky as they are some of the most volatile trading assets in the world. Profits can be magnified and that’s why people love online trading. However, most people lose money (70-80%!) You need to be 100% certain online trading is for you before proceeding.
Frequently Asked Questions
What Is CFD Cryptocurrency Trading?
Crypto trading is when traders speculate on the price movement of a crypto using a CFD trading account. This means you can speculate on the price movement of cryptos (like Bitcoin) without ever owning the actual asset, i.e Bitcoin.
When you trade crypto CFDs using a crypto trading platform, you can “GO LONG” (buy the crypto) or “GO SHORT” (sell the crypto). That all depends on which direction you think the price will go!
Always remember that CFD trading is a leveraged product. That means you only need to put up a small deposit (“trading on margin”) to gain full exposure to the crypto market. Leverage can magnify both profits and losses.
What Is The Spread On a Cryptocurrency Trading Platform?
The spread is a fundamental trading term and it simply means the difference between the BUY and SELL price quoted for a cryptocurrency. It is essentially the cost you pay to make a trade.
You want to place a buy trade on Litecoin and you CFD broker is quoting two prices: 400 – 405. If you want to buy Litecoin, you will buy at 405 and if you want to sell the market, you would sell at 400.The difference between the two prices is 5 – and that is the spread cost ($5).
How Do You Start Trading Crypto CFDs?
To begin trading on a cryptocurrency trading platform, you will need to find a suitable CFD broker that offers the cryptos that you want to trade. The comparison table above lists some of these (recommended) brokers.
Cryptocurrency trading steps;
- Decide how you will trade cryptos (will you use CFDs to trade or buy using an exchange?)
- Learn how the cryptocurrency market works (understand what moves the crypto market and the risks involved)
- Open a CFD account with a suitable broker
- Build a trading plan & strategy
- Choose a cryptocurrency trading platform and fund the account
- Open, close and monitor your crypto trades
Furthermore, it’s probably best to open a couple of demo accounts to test a few trading platforms before committing to one. Also, before you begin trading cryptocurrencies, ensure that you understand the risks involved with leveraged trading and only trade with money you can afford to lose.