3 Things You Must Learn Before Trading Ethereum

3 Things You Must Learn Before Trading Ethereum

Trading any cryptocurrency isn’t easy and requires basic skills that you cultivate over time. Learning about the industry is the first step. I understand that most people would rather skip this part. However, it’s the most important thing to do when trading a crypto currency like Ethereum. Check out our article here for altcoin trading strategies. In this article, we’ll discuss how to trade Ethereum and basic things you need to know to trade Ethereum.

1. Understanding how Ethereum works

Technically, all you need is an account on an exchange to start trading. From there, you can pretty much just buy Ethereum during the low periods of the day. Then, sell during the high periods of the day for a profit. It sounds simple but if you want to make sure your investments are calculated investments which could bring you short term profit, you need to understand the market. We suggest that you read up on Ethereum’s white paper, and follow some popular Reddit Ethereum Trading threads which traders use. It’s a great way to grab a peek into the newly found world of Ethereum traders. You can also check out our guide for Bitcoin Trading Strategies, the strategies apply to Ethereum equally. This is how to trade Ethereum with much less of the complex part of trading.

2. Discovering the platform behind Ethereum

Ethereum isn’t just a cryptocurrency. Their main project is much more revolutionary than the idea of cryptocurrencies. Ethereum is an open source platform which allows users to build the next generation of decentralized applications. It’s an abstract idea that the governing authority in a company or financial institutions can be eliminated, by building trust due to the high visibility of the workings rather than having to trust companies blindly. The essence of the project is using the blockchain technology which works in a peer to peer fashion, thus eliminating the need for a middleman or the authority. In order to fund their project, they created Ether, which was sold initially at lower prices to get the community going.

Now, they’re working on developing the platform even more. Currently, there are some great projects that are being built on Ethereum such as the Basic Attention Token and Augur. They’re great examples of what coins might appreciate in the future because they have an idea and a community behind them.

3. Anticipating Ethereum’s volatility

Volatility refers to the fluctuation which is noted in the prices of popular cryptocurrencies. Some even vary by over $100 a day. People might think that this volatility affects the long term value but it’s important to see which ones will stand the test of time. Every week, you hear about some price drop in Ethereum but it climbs back in a few hours. A few months ago, the currency almost crashed because of a rumour of founder Vitalik Buterin’s death and has now climbed back to an average figure. 

It’s important to realize that day to day dips don’t indicate future prices, Ethereum has strong tools that make it a great currency to use. As of now, Ethereum has been between $200 to $300 and hasn’t reached its all-time-high in over two months. Volatility is actually good for Ethereum trading, depending on your level of knowledge in the industry. You might be tempted to buy when the average prices are rising, but remember that this is a volatile market. Will your investment really pay off? That’s the question to ask. 

Hopefully, now you know how to trade Ethereum and can start trading on Plus500!

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About Article Author

Michael Serrano
Michael Serrano

Michael is an engineer and a bitcoin evangelist. He has been involved in cryptocurrencies since 2013. His biggest wish? 1 billion users of bitcoin, ether and litecoin by 2020. In the last 10 years he has worked for various early-stage start-up as a back-end developer.

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