Broker to Trading

These brokers offer MT4 Bitcoin CFD trading. But what is MT4 Bitcoin trading?

What is Bitcoin?

Bitcoin itself is a network on the Internet, allowing payments in the digital currency Bitcoin (BTC). Bitcoin is an asset that is transferred from wallet to wallet when payments are made. It is a peer-to-peer payment network, meaning that there is no middleman. But how are payments processed? This happens on the blockchain.

What is the blockchain?

The blockchain consists of a record of transactions made in the cryptocurrency (along with other data) and the processes that enable this record to be created and updated as transactions occur. It is stored on the Internet. The Bitcoin network contains network nodes that verify transactions that have been processed. But who processes payments?

Blockchain payment processing

Payments on the Bitcoin blockchain are processed by miners. These are participants who use computers running software to compete for the right to make blocks of processed payments. The reason they do this is so that they get a reward of Bitcoin and transaction fees when they successfully complete a block. But are these records secure?

The security of the blockchain

The blockchain consists of blocks of processed payment data (and other data). These blocks use cryptography to link them together and to help protect them from being altered once added to the chain. The use of cryptography to secure the cryptocurrency system gives rise to the term "cryptocurrency," while the chaining of blocks of data gives rise to the term "blockchain."

How is Bitcoin traded?

Bitcoin is used as a payment method. But it is also traded by speculators on exchanges (hence its ticker symbol BTC). However, a CFD broker allows the trader to trade Bitcoin without having to trade it on exchanges.

A CFD is a contract between the trader and a CFD provider that allows the trader to speculate on the price movement of the cryptocurrency asset but without having to own the cryptocurrency asset (i.e., without buying or selling any of the underlying Bitcoin asset). The price of the CFD is based on the price of Bitcoin on exchanges.

However, to trade Bitcoin CFDs, a trading platform is required. Trading Bitcoin CFDs allows the trader to access the MetaTrader 4 (MT4) platform, which is used to trade CFDs and can support Bitcoin algorithmic trading.

What is MT4?

MetaTrader 4 (MT4) is a trading platform which contains a number of features that allow it to support both discretionary and MT4 automated trading.

In discretionary trading, the trader makes their own trading decisions. In automated trading, the computer "makes" the trading decisions by following a set of rules or algorithms. The rules can be defined by the trader, or they can use rules defined by other traders. The programs that execute strategies are called Expert Advisors (EAs) on MT4. These are also known as online trading robots, and are written in a language known as MQL4.

The trader does not have to use automated trading and can use tools such as the charting on the MT4 platform to trade. With MT4, it is also possible to download and design technical indicators, in addition to using the range available on the platform. When trading Bitcoin CFDs, MT4 therefore supports a wide range of trading strategies, from discretionary trading based on charting patterns to algorithmic trading with EAs.