The very first cryptocurrency market boom took place in 2017. Since then, the issue of how to trade Ethereum has been on everyone’s mind.
Ethereum represents one of the most profitable investment options for the entire history of the financial market. In fact, Ethereum is more than just a cryptocurrency — it’s a whole network.
Recently, Ethereum has increased in price significantly, while maintaining its position as the second cryptocurrency on the market. Let’s consider the basic strategies for how to trade Ethereum for profit.
Ethereum Trading Strategy: Most Popular Strategies
What is the best Ethereum trading strategy? Well, there are many trading pairs of Ethereum with other cryptocurrencies and fiat money, which are traded around the clock. Therefore, the market never sleeps, and many traders resort to take-profit and stop-loss orders so that their positions can be closed automatically when certain levels are reached.
Some people use bots to trade Ethereum cryptocurrency. These bots follow certain goals and do all the dirty work for a trader. However, here you need to be able to count on the reliability of such a tool and remember that no bot can replace a human.
Also, for trading ETH, there are contracts for difference (CFDs) and derivatives, which don’t imply real ownership of the currency. Instead, you enter into an agreement with a broker based on your own expectations of price movement. For example, if you go long and ETH rises, the broker agrees to pay you the difference. And if the price falls, you end up with a loss. Using CFDs, you can also open short positions and speculate on falling quotes.
How to trade Ethereum options? Well, options open up a host of opportunities and investment strategies for DeFi investors and traders. Thus, another Ethereum trading strategy could be investing in ETH in order to increase the price in the long term. In this case, you should think about ETH futures and options which are intended to protect a trader from volatility.
Ethereum Trading Tips: Key Tips & Tricks to Know
Ethereum is a cryptocurrency that has seen steady growth since its launch in 2015. Digital transactions are stored in a so-called blockchain These are cryptographically encrypted and can always be traced by the participants.
It’s necessary to note that before engaging in ETH trading, make sure you’ve learned basic Ethereum trading tips. Let’s consider them!
- Ethereum digital currency increases in value similar to Bitcoin. You can buy both currencies on the Internet. Later you may sell them again when the value is higher.
- When buying ETH, make sure it’s a platform that accepts the currency you need.
- You are on the safe side if the platform accepts payment with PayPal. If something goes wrong during the purchase, you’re covered by PayPal. If necessary, claim your money back.
These were the basic Ethereum trading tips and tricks that you should know before engaging in ETH trading. Just be sure to continue reading this article to learn more tips.
Ethereum Trading Guide: How to Trade ETH Successfully?
After you’ve learned a little more about how to trade ETH cryptocurrency, let’s take a look at some simple tips to help you increase your chances of success. Here is our Ethereum trading guide.
Read More & Analyse Information
It’s necessary to study all the available analytics before making decisions on trading positions. You can subscribe to analysts’ Twitter accounts and track relevant news sites — this information will help you assess the direction of market movements. You need to deal with all sources. Otherwise, there is a temptation to succumb to the pressure of ETH bulls, who expect the coin to skyrocket by 1000% overnight.
Think over your strategy in advance, determine your goals and the desired result, as well as the acceptable amount of loss. The biggest weakness of a trader is to allow emotions to take over — demonstrate greedy when prices rise and unwillingness to sell when prices start falling — all this can lead to significant losses.
Today, many platforms offer to trade Ethereum with leverage. In some cases, this may increase the opened position — for example, with a capital of $100, it will be possible to use $500. But you have to be careful — you can increase your profit fivefold, and get significant losses as well.
What is your own trading Ethereum strategy? Feel free to share your knowledge in the comments. Have a great weekend!