CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
Named after the pioneering programmer and mathematician Countess Ada Lovelace, ADA is a cryptocurrency associated with the open sourced and decentralised blockchain project Cardano.
Based on detailed research and scientific principles, the Cardano blockchain development team is comprised of expert researchers and engineers who together form a large worldwide collaboration group. Furthermore, the project has been designed to be especially scalable and efficient.
Additionally, Cardano provides for further evolution in its platform by allowing soft forks in its blockchain to provide for upgrades to take effect. Overall, the design of Cardano’s protocol both protects users’ rights to privacy and tries to cater for the requirements of regulators.
Although various exchanges allow trading in ADA to take place, buying and selling Cardano’s ADA tokens tends to be safer if a regulated online broker is used.
Just about any activity that takes place over the Internet can be subject to fraudulent behaviour.
Therefore, it’s vital to make sure to become familiar with the common scams related to crypto fraudulent schemes when trading in cryptocurrency. Schemes such as fake crypto exchanges, investment schemes and cloud mining enterprises should be actively avoided. Also steer clear of crypto firms that ask for a start-up fee to allow ADA to be instantly traded for fiat money. Another common fraudulent approach is to state investors will quickly double the value of their assets – a type of opportunity that rarely materialises.
The widespread practice of phishing presents another risk to cryptocurrency investors, with it seeming particularly common on social media and email. Phishing involves the scammer impersonating an often valid business to get access to their clients’ cryptocurrency wallets, passwords or other key personal data. While this approach looks quite obvious to an experienced eye, do make sure to avoid engaging in financial arrangements using direct messages.
When it comes to even major cryptocurrency exchanges, the risk of hacking causing substantial financial losses is very real. For example, Mt Gox was one of the biggest bitcoin exchanges and had to close down after 850,000 bitcoins were stolen in 2014 by hackers. The exchange lacked a client protection fund, so its customers still have not received compensation for their lost bitcoins.
Whenever possible, it is desirable to choose a regulated and well capitalised broker to trade cryptocurrencies through. An example of such a broker is AvaTrade that is owned by a firm with a market capitalisation of $17 billion. Since AvaTrade is based in Ireland, it has to conform to the EU’s strict financial regulatory policies. Another option would be eToro that also has its head offices in Europe, and subsequently subject to the EU’s Markets and Financial Instruments Directive.
Of the numerous regulated online brokers, AvaTrade provides one of the retail forex market’s favourite trading platform options — MetaTrader4 (MT4) by MetaQuotes. MT4 allows for the easy customisation of chart types and colours, and it is available for desktop, web, tablet or phone, including both Android and iOS smart devices.
The MT4 platform offers a straightforward trading and analysis interface with plenty of analytical opportunities for more advanced traders. For example, MT4 has advanced charting capabilities that let traders analyse current market trends, in addition to the ability to trade directly from charts and develop automated trading systems.
Note that when using a regulated trader, you still remain exposed to market risks as cryptocurrency exchange rates can rise or fall due to various variables.
The market for the ADA cryptocurrency has had its ups and downs since the coin was first issued in 2017. Just like other cryptocurrencies, ADA’s value relative to fiat currencies like the U.S. dollar and major cryptocurrencies like bitcoin can be strongly influenced by several real-world dynamics.
One thing to keep in mind is that cryptocurrencies are generally very democratic. This means that if a large order goes through the market, it affects the supply and demand profile for the coin, and hence impacts its equilibrium exchange rate.
Another major factor that can affect the relative value of a cryptocurrency, like ADA, is if large companies begin to accept it for payment purposes. Alternatively, companies may start to support Cardano’s blockchain technology in different manners that may lead to the coin becoming more useful. In both these instances, the token could potentially rise in value.
A major adverse shock to the value of a cryptocurrency can be triggered when a government chooses to heavily regulate either one or all such virtual currencies with acts like banning holding or using the coins. Additionally, hacking can be a source of depreciation of the crypto coin market as seen through the large crypto exchange hack of Mt Gox.
Other external factors also influence cryptocurrencies. For example, an event that historically boosted the value of some cryptocurrencies was the Cyprus banking crisis in 2013. During that period, it seemed people in Cyprus had lost faith in their banking system that had been closed for nearly two weeks. It resulted in a boost in the value of bitcoin as individuals wanted to store their wealth out of reach of their own government.
Furthermore, developments in blockchain and cryptocurrency technology can also impact coin prices, such as forks in a blockchain. Another value effect occurs in existing blockchains that go through pre-programmed stages where the block reward to miners gets reduced, such as bitcoin’s infamous “halvings”. This tends to positively influence the value of the affected coin.
In conclusion, all these numerous factors are points to consider when analysing the potential of a cryptocurrency such as ADA.
Chart of Cardano (ADA) in U.S. dollars and bitcoins (BTC) over its total trading period from September 2017 until July 4th, 2019 including daily volume and market capitalisation data. Source: CoinMarketCap.
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