How cryptocurrency trading works

The simplest way to trade a cryptocurrency is to first buy it from a cryptocurrency exchange using fiat currency (cash). Then you can either sell it later at a profit (or loss). You can also trade your initial cryptocurrency for a different kind of cryptocurrency (like trading bitcoin for ether coins). Trading between currency types is also done on a cryptocurrency exchange. Some exchanges are intended primarily to trade between fiat currency and cryptocurrency, while other exchanges are intended primarily to trade only between various types of cryptocurrencies. Not all cryptocurrencies can be traded on all exchanges. Another method to trade cryptocurrency is to purchase a “Contract for Difference” (CFD). This method allows you to take long or short positions in cryptocurrency with a lower initial investment.