Ultimate Guide on How to Trade Ethereum

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Ethereum trading is pretty straightforward once you get the hang of it. 

It seems like only yesterday the world saw its first-ever tradable cryptocurrency. Fast forward to 2021 and the digital currency industry sees billions of dollars trading hands each and every day.

There are now thousands of different digital currencies in existence, with Ethereum being the second most in-demand globally. As such, the Ethereum trading scene is now growing in popularity with those seeking a combination of liquidity and volatility.

We should make it clear that Ethereum trading is no walk in the park. Taking this into account, we have created a comprehensive guide on How to Trade Ethereum

We dive into everything there is to know about this crypto-asset, from the bare-bone basics and risk/reward strategies, to how to trade Ethereum from the comfort of your home.

How to trade Ethereum in 5 Easy Steps

To trade Ethereum, the first step is to Open an account with a regulated broker or exchange, depost funds, select Ethereum from the platform list, and lastly Buy Ethereum (Long) or sell ETH (go short).

This guide on how to Trade Ethereum ETC will break everything down in Layman’s terms so that you do not trade ETH blindly. But, if you don’t quite have the time to read it all of the ways through, this is what you need to do to trade Ethereum now.

• Step 1: Open an account with a regulated, commission-free exchange like eToro
• Step 2: Funds your account
• Step 3: Choose how much Ethereum you want to trade ($25 minimum)
• Step 4: Buy ETH (go long) or sell ETH (go short)
• Step 5: Confirm the trade order

Let’s get started learning how to trade Ethereum in 2021!

What is Ethereum Trading?

As is the case with any asset one chooses to trade – whether that’s stocks, forex, or Ethereum – the overarching objective is to correctly predict whether you believe the price of Ethereum, the digital currency, will rise above or fall below its current value.

If you happen to speculate correctly, you will make gains on your Ethereum trade. And of course – the amount you make will depend on how much you staked on the position.

It also goes without saying that the higher the value of your Ethereum position, the more you stand to make if you predict correctly. The vast majority of Ethereum traders calculate the success of trades in percentage terms.

Let’s show you a basic example of how trading Ethereum works in practice:

• You opt to trade Ethereum against the US dollar
• This means that you are trading the crypto pair ETH/USD
• ETH/USD is priced at $611.46
• Believing the price is going to see an increase – you place a buy order
• Your stake on this order is $1,000
• In a matter of days, the pair’s value has seen an increase of 6%
• You speculated correctly – thus, you made $60 on this crypto trade (6% of $1,000 stake)

As is clear from our above example, the rudiments of Ethereum trading is the same as any other asset class. You were able to make a profit in our hypothetical trade – because you correctly speculated the market sentiment on Ethereum.

How Does Ethereum Trading Work?

As we touched on, Ethereum trading works in much the same way as when buying and selling any other financial instrument. Having said that, it’s not as cut and dry as it sounds.

After all, people have been actively trading stocks for over 100+ years – whereas cryptocurrencies have only been on the scene for a decade or so.

Bearing this in mind, we believe the best way to start trading Ethereum online is to first gain an understanding of how this digital coin works.

Ethereum Trading Price Movements

The value of any tradable asset is dictated by the supply and demand for the ‘product’. As such, if the sentiment of the Ethereum project is positive, then this tends to lead to more people buying the digital currency than those selling it.

This increased interest does mean that the price of Ethereum is likely to increase as well. Should the opposite be the case, and enthusiasm for Ethereum is waning – the price will decrease. This is the nature of supply and demand and this – the same with any financial marketplace.

Many things could alter the course of supply and demand of Ethereum, such as – macroeconomic news, speculation, regulation, current affairs, and crypto wallet or exchange hacking stories.

We mentioned regulation there. To give you a specific example – let’s say that a perceivably strong and secure government, such as the US, were to regulate Ethereum. This would send out a positive message that the digital currency is here to stay, firmly rooted in modern society.

On the other hand – if the US government instead announced a plan to prohibit the use of virtual currencies – the price of Ethereum would probably fall faster than a speeding bullet. This could be catastrophic for the future of the cryptocurrency market.

It is important to note that due to the nature of supply and demand, the price of Ethereum will rise and fall throughout each and every day – on a second-by-second basis.

Whatsmore, this digital asset can be traded 24 hours a day, 7 days a week via an online broker.