Risks related to shorting cryptocurrencies
In cryptocurrency trading, two important things are to be considered. Firstly, a proper understanding of CFDs and their usage; secondly, willingness or not to take risks on the probability of losing money. The major risk of shorting currency is the possible risk of the virtual price value never going down.
For longing cryptos, the possible risk of losing is high/equivalent to its initial investment, whereas in shorting, the potential risk of losing depends on the price rise. In case the price goes impeccably high, then the trading position ends up getting closed by the trader or the exchange.
How to control this risk?
We offer risk tolerance for both long/short trading. A few risk control strategies are resource allocation, stop losses, position sizing method, and trading software. However, CFDs still possess a risk of rapid money loss due to borrowed capital, especially if you lack the composure and patience—this where we at CAPEX differ from other CFD traders by providing the CAPEX Academy to hone your trading skills. You can also practice trading with demo account on CAPEX to get a firsthand understanding of the process.
Conclusion – Learn to short cryptocurrencies at CAPEX
Cryptocurrency trading is a vast field spanning strategies to make profits. It is a well-known fact that the crypto market is a volatile one, and the uncertainty of gains and losses is always lingering around. So, proper knowledge of trading and technical analysis is a must before starting with cryptos.
With CAPEX, every trader gets an in-depth understanding of the trading market. We at CAPEX equip you with long-term decision-making skills and the right tools to try out both bearish and bullish trading approaches. Now that you’ve learned how to short cryptocurrencies, join us at CAPEX and test your knowledge.