Bitcoin Signals may become very hot soon as providers look to expand offerings.
Bitcoin signals are ready for a breakout in prevalence as many more brokers have started to offer BTC/USD as a trading instrument. It is a case of the Bitcoin pairs being traded as a CFD (Contract for Difference), which mirrors the movement of BTC/USD and other pairings. Cryptocurrencies such as Bitcoin, Ether, Litecoin and Bitcoin Cash have all become popular and many traders wanted a piece of the trading action. Bitcoin Signals exist now, but they are not established nor consistent enough to garner your investment. It may seem like the hot new thing, but when brokers are selling volatility like it is the most wonderful thing in the world… it’s cause for concern.
The problem is that there had to be an easier way to trade Bitcoin through these broker liquidity networks and CFDs are the solution. The brokers had to adjust leverage levels had to be adjusted as cryptocurrencies are extremely volatile and still not mature enough in adoption. Cryptocurrencies are being introduced to through CFDs to retail Forex market at possibly a premature time, leverage levels have to either be very low or constantly tweaked. It makes for a very tough trading experience. Some are offering leverage as high as 20:1, which is perfect for the Wall Street Bets crowd on Reddit and terrible for the majority of traders who have no idea what they have entered. The Bitcoin boom is a bucket shop’s dream.
Then how are Bitcoin traders out there making money in the first place?
There are exchanges that hook into the marketplace and they offer minimal leverage (2:1 or 3:1). It is still extremely risky and the volatility and unpredictability of the market present challenges as far as drawdowns.
A standard lot is 100,000 units of a base currency. Consider that a Bitcoin may cost $8,000 USD rather soon or now. It’s so volatile that it is hard to get a grasp of the pricing. It may be growing into that standard lot pricing, but considering the forks (Bitcoin Gold and Bitcoin Cash), the competition and the fear that this is another Tulip Bubble it may not reach that high. The trading volume is also relatively thin and susceptible to traders with large volume positions.
Bitcoin Signals are tough to trust and hard to come by
Bitcoin Signals will likely have very high drawdowns and require multiple recapitalizations. A solid signal needs to be free of large drawdowns and operate continuously without having to reload an account for 52 straight weeks. Unfortunately, no such thing exists for Bitcoin and it may not exist for some time. Trading Bitcoin without leverage can be like trading at 100:1 or 200:1 with leverage.
As tempting and potentially profitable as Bitcoin and other cryptocurrencies may be, it’s too volatile to get involved as far as a pure trading approach with CFDs through a broker. The non-sovereign currency markets will stabilize in the future and risk will be adjustable based on leverage level, but right now it is not a wise idea and it is not recommended by Freevestor.