Your Ultimate Guide to Learn About Ethereum Trading Strategies

Many people assume that ethereum is a cryptocurrency, which is not correct. It is actually a project name with a native currency called ‘Ether’ that comprises multiple utilities both inside and outside the ecosystem of Ethereum. Storing value, a mode of payment, staking, and rewarding the miners for their services are some primary functions of the ethereum project. Besides this, the project consists of other features that make trading ether currency genuinely exciting and unique.

Unlike fiat and traditional currencies, Ether is a decentralized currency. It has no control of any government or financial institution. You can buy ether coins from any crypto exchange worldwide and trade them 24/7 in the cryptocurrency market. Ether experiences the volatility of cryptocurrency value and price fluctuations. As a savvy trader, you can leverage this feature and make a profit.

Categories of Trading Ether

You can trade ether in two different ways, such as holding and active trading.

• Holding Trading

Holding is the most uncomplicated trading strategy that has helped many investors around the world. It entails the least amount of effort. Stock traders use holding as a long-term strategy. They buy a specific amount of stock in a reputable company and hold on to them as the company value grows, increasing the stock price in the process. When it comes to the crypto market, bitcoin and ethereum are the primary leaders in the space. Many early investors have made a fortune with these cryptocurrencies over time.

Using a holding trading strategy is handy in saving time and energy. All it needs is to purchase Ether in your desired quaintly and store them in a digital wallet safely. It does not require you to constantly peruse news or keep track of price histories, information, and other fundamentals since these aspects will help you identify whether or not Ether’s value is likely to drop temporarily.

Holding trading strategy does not require high maintenance since there are no frequent trades. Ultimately, the over transaction fees that you will need to pay are significantly low. Since holding trading strategy requires investors to invest in cryptocurrencies for a specific time, they cannot make a profit from short-term price fluctuations. With cryptocurrencies, long-term holding can be risky because of the crypto market’s volatility. It entails lots of careful research to choose the right cryptocurrency at the right time.

The eventual sale is a crucial aspect of the holding trading strategy. It is when you pocket your earnings and exit the current position. Thorough research will be handy in identifying whether you sell your crypto coins in chunks or sell them all at once. It, of course, depends on the cryptocurrency you choose and how much you are sure about its potential impact.

• Active Trading

Active trading involves digging deep into the crypto market. You would need to acquire more knowledge and experience about digital assets and value actions. Active traders use fundamental and technical analysis to keep an eye on the market performance. They buy low-priced crypto and sell them at a higher price. Active trading allows you to earn a profit from short-time fluctuations. With the required skill set, you can identify short jumps in different coins and make money accordingly.
Some investors may take it as a full-time task and get frustrated with careful planning. It requires you to withdraw your holdings to your bank account for every transaction, which could be a lengthy and costly procedure due to involved fees.

After you know what trading strategies you can have your hands-on practice to trade ethereum. As the world’s second-largest cryptocurrency, ether is available in all the primary crypto exchanges, including Kraken and LocalCryptos.

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