Crypto CFDs Trading: Top Platforms, Strategies, and Tips

Contact For Differences (CFDs) are contracts in which the financial assets are not directly owned by the trader. Instead, the trader bets on their price whether the price will go up or down. The traders take profits or losses based on the speculation. What are crypto CFDs? Crypto Contract For Differences (CFDs) allows traders to invest in cryptocurrencies by forecasting their price movement. Where can you make these trades? There are various crypto CFDs platforms and you can select the one that fits your requirements. We will discuss some platforms in this blog.

Crypto CFDs Trading Platforms

Some platforms that allow traders to trade on crypto CFDs are given below:

• eToro
• IG
• AvaTrade
• IC Markets
• Plus500
• CMC Markets

Is Trading Crypto CFDs Safe?

What is the biggest threat a trader can have while using the platforms for these trades? Trading Cryptocurrencies as CFDs means platform security. This means you can trade on the cryptocurrency market without the risk of a hacker breaking into your cryptocurrency wallet and taking your money. The platform you will be using for the crypto CFDs should be safe. Other than that, risks are always involved in any type of trading. For better results and risk mitigation, you must plan effective trading strategies.

Best Mobile Apps for Crypto CFDs Trading

Some of the best mobile apps for trading Crypto CFDs, known for their user-friendly interfaces, unique features, and regulatory compliance:

eToro: The features eToro has are social trading, copy trading, real-time data, and educational resources. It follows FCA (UK), CySEC (Cyprus), and ASIC (Australia). It works for both iOS and Android.

Plus500: With a user-friendly interface, it has risk management tools and a free demo account. It follows regulations from FCA (UK), ASIC (Australia), and CySEC (Cyprus). It works for both iOS and Android.

IG Markets: The features it has are advanced charting tools, alerts, news updates, and educational content. The regulations it follows are FCA (UK), and ASIC (Australia). It works for both iOS and Android.

AvaTrade: It is offering services for multiple platforms (AvaTradeGO, MT4, MT5), educational resources, and leverage options. The regulations it follows are the Central Bank of Ireland, and ASIC (Australia). It works for both iOS and Android.

CMC Markets: The features it has are advanced charting, price alerts, news, and analysis. The regulations it follows are FCA (UK), and ASIC (Australia). It works for both iOS and Android.

Pepperstone: It provides low spreads, fast execution, and multiple trading platforms (MT4, MT5, cTrader). The regulations it follows are FCA (UK), and ASIC (Australia). It works for both iOS and Android.

Binance: It works for all the cryptocurrencies, leverage options, and real-time charts. The regulations it follows vary by country having strict security protocols. It works for both iOS and Android.

XTB: The features it has are the xStation 5 trading platform, advanced charts, and risk management tools. The regulations it follows are FCA (UK), and CySEC (Cyprus). It works for both iOS and Android.

Choosing a reputable app can enhance the safety and efficiency of your trading experience.

Automated Trading Strategies for Crypto CFDs

In automated trading, software applications that use artificial intelligence and advanced algorithms. These are called automated trading robots. These algorithms analyze market data, identify trading opportunities, and execute trades. The bots can open and close trades on various platforms for multiple financial markets. Automated trading boosts efficiency and eases trading experience in the always-changing crypto markets. Automated trading strategies for Crypto CFDs can help traders execute trades based on predefined criteria. These do not require constant monitoring. 

Some of these automated trading strategies for Crypto CFD are given below:

• Trend Following
• Arbitrage
• Breakout Strategy
• Mean Reversion
• Momentum Trading
• Scalping
• Grid Trading

Here are a few tips for using automated trading strategies:

Test your strategies on historical data to make sure they are effective.

1. Keep analyzing the performance of your bots and the strategies so that you can make adjustments when required.
2. Utilize stop-loss and take-profit orders to manage your risk. These are the best to mitigate risks.
3. Stay updated with market news and events as they can impact your trades. The market can reverse after news and events.
4. Always start trading with a small amount of capital to test your strategies before scaling up.

If you want to improve your trading efficiency, you can go for automated trading. It’s important to understand the risks in auto trading and how to refine your strategies constantly.

Tax Implications of Trading Crypto CFDs

Are CFDs taxable? Yes, taxes are applied when a trader (individual trader) exceeds capital gain on CFD than Capital Gains Tax (CGT). This allowance is set by the government of the jurisdiction where the trading occurs. The individual is obligated to file a self-assessment tax return. 

CFDs are taxed differently in different countries:

Individuals holding an asset for 12 months or longer are eligible for a Capital Gains Tax (CGT) discount of 50% in Australia.

If there is an individual trader or has a partnership and the gains qualify for Business Asset Disposal Relief (formerly known as Entrepreneurs’ Relief), they are eligible for a reduced tax rate of 10% on their capital gains In the UK.

Individuals are taxed on only 50% of their capital gains, with a cap of $250,000 per year in Canada.

All profits earned by the financial assets have a flat rate of tax set at 30% In France. This charge includes an 8% income tax and a 20% social security contribution.

A 25% tax rate is applied to capital gains in Germany, along with an extra 5.5% solidarity surcharge.

However, if the gain increases from CFD trading conducted by the limited company, Corporation Tax will be applicable. It differs in each jurisdiction such as 38% in Canada, 15% in Germany, 25% in Australia, and more.

Conclusion

In short, Contact For Differences (CFDs) are contracts in which the financial assets are not directly owned by the trader. Instead, the trader bets on their price whether the price will go up or down. Contract For Differences (CFDs) allows traders to invest in cryptocurrencies by forecasting their price movement. Some common crypto CFD trading platforms are eToro, IG, AvaTrade, IC Markets, Plus500, and CMC Markets. Mobile apps that work best for Crypto CFD include eToro, IG Markets, Plus500, AvaTrade, CMC Market, Binance, etc. Automated trading bots use Artificial Intelligence and AI-powered algorithms to enhance the trading experience of the traders. Lastly, the Crypto CFDs are taxable and the tax varies according to the country. The tax is different for different countries.