Trading Cryptocurrencies on MT5 platform

One of the innovations that the MT5 platform is bringing to the marketplace is the ability to trade assets that were not in existence at the time the MT5 came on board way back in 2010. Thanks to B2Broker, one of the best turnkey platform providers to forex brokers, your preferred forex broker can now offer you the opportunity of trading Bitcoin (BTC) and Ether (ETH) as part of the asset suite on the MT5 platform. For traders, this is also an opportunity to tap into the cryptocurrency craze that is now sweeping the world. For brokers, this is a great revenue opportunity as the craze for cryptocurrency trading is attaining heights not seen before in the forex market. There is no longer any doubt that with official (albeit veiled) endorsements of cryptocurrencies from countries like China and Russia, these digital currencies have now firmly gained a foothold in today’s world and are here to stay. Therefore, the rate at which cryptocurrencies are being traded can only increase.

In this article, we examine the following aspects of cryptocurrency trading on MT5:

  1. What is a cryptocurrency?
  2. What are the commonly traded cryptocurrency pairs?
  3. Why is the MT5 the ideal place to trade CFDs on cryptocurrencies?
  4. How to Start Trading Cryptocurrencies on MT5
  5. Cryptocurrency trading on MT5 vs Cryptocurrency Wallet Exchange

What is a Cryptocurrency?

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A cryptocurrency is a form of digital currency in which the process of generation of units of the currency as well as the verification of the transfer of funds is regulated using encryption techniques, operating independently of a central regulatory point such as a central bank. The essence of the creation of cryptocurrencies is captured in the characteristics which are displayed below. These characteristics serve to distinguish cryptocurrencies from traditional fiat currencies. These are:

  1. Anonymity – Transactions performed across the cryptocurrency networks can be performed without any exchange of personal information.
  2. Decentralization – This is the very aim of the creators of cryptocurrencies: the lack of a centralized control mechanism by a government agency or a bank. In contrast, the points of control are decentralized and maintained by a peer-to-peer network.
  3. Secure: Difficult to Counterfeit – Cryptocurrency transactions are recorded in the blockchain. These transactions can be verified by anybody and exists in several copies. 

What are the Commonly Traded Cryptocurrency Pairs?

The most popular cryptocurrencies today are Bitcoin, Ethereum, and Litecoin. Others are The Bullion Coin (TBC), Giracoin, etc. On the MT5, the price quote of the cryptocurrency listed for trading is displayed as the cryptocurrency symbol versus the US Dollar, with the cryptocurrency listed as the base asset e.g. ETH/USD, BTC/USD.

How to trade Cryptocurrencies on MetaTrader 5

In order to start trading cryptocurrencies on the MT5 platform, you need to follow these steps below:

  1. The first step is to open an MT5 account (demo or live) with your broker.
  2. Use the login details created in step 1 to log in to your MT5 platform. It is assumed that you have downloaded the desktop client or you are using the web-based or mobile versions of the MT5.
  3. Once you have opened the platform and logged in, right-click on the Market Watch window and select the ‘Symbols’ tab.
  4. Select ‘Crypto’ from the list of assets in the ‘Symbols’ window. Click against each cryptocurrency symbol, then click ‘Show’ to include the cryptocurrency pairings to the Market Watch window.
  5. The cryptocurrency pairing is now available for you to trade with. You can choose to open a new chart, or open a new order.

Cryptocurrency trading usually comes with its own contract specifications. Your broker will stipulate what the contract specifications are for trading BTC/USD or ETH/USD.

Cryptocurrency Trading on MT5 vs Cryptocurrency Exchange Services

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Many people who are involved in Cryptocurrency business try to make money by exchanging their cryptocurrencies for cash. Their principle is to buy the ETH or BTC at a lower price and resell for fiat currencies at a higher price. This method of trading presents a lot of risk for the following reasons:

  1. There is no way for the trader to know when the price of a cryptocurrency will be low enough to buy or high enough to sell. Cryptocurrencies are very volatile assets, so it is very easy to sustain losses using this method.
  2. It takes some time to confirm transactions. Within this window period, the price of the cryptocurrency could have changed and may have moved adversely against you. This has been a source of disputes between traders in some areas.

So why should you preferably trade cryptocurrencies on MT5?

  1. The MT5 platform provides charts and technical indicators which can be used to gauge appropriate times when to buy or sell for profit.
  2. With the MT5, the trader can profit from cryptocurrency price movements in two directions. It is possible to profit by selling (going short) when prices are falling, and also by buying (going long) when prices are rising.
  3. Cryptocurrencies are very volatile assets: they are usually trending most of the time. This presents lots of trading opportunities for the trader.
  4. Cryptocurrencies can be traded on MT5 on an intraday, swing trading or position trading basis. It is also possible to scalp as well as use the new hedging feature of the MT5 platform.

So what are you waiting for? Call your broker today and inquire about how you can start trading cryptocurrencies on the MT5 platform.

This article provide by B2Broker.

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