Introduction to Cryptocurrency Trading

Cryptocurrency trading is the act of speculating on cryptocurrency price movements via a CFD trading account, or buying and selling the underlying coins via an exchange.

CFD trading is a derivatives product that enables you to speculate on cryptocurrency price movements without taking ownership of the underlying coins. You can go long ('buy') if you think a cryptocurrency will rise in value, or short ('sell') if you think it will fall.

Both are leveraged products, meaning you only need to put up a small deposit – known as margin – to gain full exposure to the underlying market. Your profit or loss is still calculated according to the full size of your position, so leverage will magnify both profits and losses.

Cryptocurrency markets are decentralised, which means they are not issued or backed by a central authority such as a government. Instead, they run across a network of computers. However, cryptocurrencies can be bought and sold via exchanges and stored in 'wallets'.

Unlike traditional currencies, cryptocurrencies exist only as a shared digital record of ownership, stored on a blockchain. When a user wants to send cryptocurrency units to another user, they send it to that user's digital wallet. The transaction isn't considered final until it has been verified and added to the blockchain through a process called mining.

The cryptocurrency market is available to trade 24 hours a day, seven days a week because there is no centralised governance of the market. Cryptocurrency transactions take place directly between individuals, on cryptocurrency exchanges all over the world. However, opening hours can vary depending on which exchange you use.