Trading with CFDs

As we have already touched upon, CFD trading allows a trader to profit from the price movement of an underlying asset without ever owning that asset outright. A CFD  is a contract between two parties that tracks variation in the price of a given asset, without that asset ever actually trading hands. The advantage of CFDs is that you have the option to go either long or short – long if you think the price of Litecoin will increase, short if you believe it’s likely to fall. 

In most cases, Litecoin trading is done by pairs, much in the same way that foreign currency is traded. Pairs come in different combinations, but most Litecoin traders will be trading the cryptocurrency against the US dollar, regardless of where they are based, as inevitably trading volumes and liquidity levels are much higher with the US currency. 

It is also possible to trade Litecoin against other cryptocurrencies. Crypto-to-crypto pairs or crypto-cross pairs – are certainly worth considering as an option, as there is often a great deal of price fluctuation between two coins – especially between Altcoins, including Litecoin, and Bitcoin. However, a novice investor is most likely going to want to focus on LTC/USD. 

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