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Ethereum Trading Strategies

In 2015, a new coin came into existence, Ethereum, and today it is the second most ranked crypto coin as per market capitalization after Bitcoin. It has remained in the second spot for a long time. This article will discuss Ethereum trading strategies that most traders employ to profit considerably.
So make yourself ready as we dive deep to explore Ethereum.

Ethereum Trading Tips for Success

In recent years, the popularity of cryptocurrency has exponentially grown. Although it is profitable, there are a few things that you must remember before you indulge in Ethereum trading.

We need to understand what ticks the price factor of Ethereum, how to trade it, and when is the ideal time to start trading?

Ethereum Trading Tips for Success

Trading Ethereum

You can use traditional methods like trading platforms or use cryptocurrencies for trading Ethereum. Several exchanges offer Ethereum in exchange for fiat currency and other cryptocurrencies like Bitcoin and other digital currencies.

The most popular method is to create an online account on a platform, deposit money into your account, and start Ethereum trading.

Nonetheless, you should be aware of the inherent risk involved while investing in Ethereum, and it would be helpful if you were to do research before choosing an exchange and if it suits your needs.

Trading Ethereum

Research is the key to success

Research is the key to success.

Like any cryptocurrency, Ethereum is also volatile in nature. The price predictability of Ethereum is as dicey as that of any cryptocurrency. You need to weigh your options if investing in Ethereum. There are many factors to consider before investing in Ethereum. Factors like the market value, Ethereum price, and its inherent volatility.Some believe that there is no ceiling for Ethereum that can restrict its price; its price is bound to surge over time. On the other hand, some are pessimistic, suggesting that it is too early to predict the price since it is a relatively new type of crypto or digital currency.

Use caution while trading on margin

The first thing to understand about margin trading is that the money used as collateral must be worth more than the amount of your transaction, or you will not be able to get into a position. Since margin trading is riskier than average trade, only people with enough funds enter and trade.

The chances of losing huge amounts of money cannot be ruled out. Thus margins required while trading cryptocurrency like Ethereum are higher compared to other financial instruments like stocks or Forex due to their inherent volatility.

With such risk, the chances of you being forced to sell at a price lower than the price you bought remain, and you might lose more than what you can afford. But, all said and done, if the trade goes as you have predicted, an enormous profit can be gained in a short time.

Use caution while trading on margin

Three Strategies for Trading Ethereum

Risk-averse is a method Ethereum traders use to expand their exposure to the cryptocurrency

Last year in October 2021, Ethereum enjoyed a bullish run reaching roughly $4,800, an all-time high, while Bitcoin was trending at roughly $67,000 because Bitcoin launched its ETF. Then Chinese authorities started banning all crypto-related activity. Thus, the price of cryptos began to fall as China was the world’s largest crypto hub. The price of cryptos steadied a bit as most of the mining activity was shifted to America. Thus the price again increased.

Russia also joined China in banning all crypto-related activities. Thus, Russia is the third largest crypto hub. So the price of Ethereum, along with other cryptocurrencies, fell.

The ongoing war between Russia and Ukraine has taken a toll on crypto. Russia has begun accepting cryptocurrencies as a mode of payment for gas.

Thus each news floating on social media affected the price of Ethereum one way or the other. Thus it proved that cryptocurrencies have inherent volatility but traders can still make money if they observe the current market trend on the social media platform. We shall explore the two most used strategies that ensure that the traders make a profit.

Risk-averse is a method Ethereum traders use to expand their exposure to the cryptocurrency
Options Margin
There are two options: call and put when a trader has the right to buy but is not obliged to buy cryptocurrencies at the end of the specified period. When a trader has a right to sell but is not obliged to sell cryptocurrencies at the end of the specified period. Traders utilize the collateral in margin accounts to borrow funds from a broker, which must be repaid with interest. The beauty of this strategy is that traders can magnify their profit by investing little.
If the trade does not go as the trader planned, then the trader has to pay only the premium. However, traders can expose unlimited negativity by selling derivatives similar to futures contracts. However, although the profit margin might increase, there are equal chances of making a loss too.
Learn how to trade Ethereum

Learn how to trade Ethereum

Traders are known to employ all kinds of various strategies and tactics to make a profit in the world of cryptocurrency. These strategies range from scalping, where a trader successively trades with minutes of price change by holding on to the investments for an extended period only to sell at huge profits. Ethereum is ranked next to Bitcoin in terms of market capitalization. We present the three most profitable trading strategies to trade in the second-most ranked cryptocurrency.

How to trade ETH? What drives it’s price?

Understanding the themes that have helped the growth of Ethereum in the past will help you improve your Ethereum trading strategies. In addition, the ability to read and analyze charts and data and recognize trends improves the chances of making a profitable transaction.

How to trade ETH What drives it’s price.

Ethereum trading: top techniques

Ethereum can be traded 24 hours a day against other cryptocurrency and fiat currencies. Since the crypto market is open 365 days a year round the clock, some traders are known to use stop losses and exit the market while making a profit.

Some traders are known to use bots that carry out trade on their behalf. The bot must be extremely good to maximize profits while keeping the loss low. However, a bot can never fully replace human involvement.

Most traders are known to trade Ethereum Contract of Difference or CFDs. It is a derivative that allows you to trade on the market price of Ethereum rather than owning it. You can take a long or a short position while trading on the price of Ethereum. If you have held a long position and the price rises, the broker will give you the price difference from the start to the end of the trade. Of course, you must pay the broker if the trade does not go as you predicted.

You can even buy a couple of Ethereum coins, as most investors do so that over a period when the price of ethereum is high, they can sell it off for a substantial profit.There are other products like futures and options that help the traders to mitigate loss while exposed to Ethereum volatility.

Top strategies for success while trading Ethereum top techniques.

Top strategies for success while trading Ethereum top techniques


To succeed in Ethereum trading, a few things need to be kept in mind. We have laid down a few tips that can help you a lot.

  • Read everything: You must research before entering a position while trading Ethereum. Reading or gathering news on the latest development in Ethereum will help you, especially the market price movement. Make sure you collate data from several sources and then try to do your analysis. You should not stock only one crypto expert or analyst predicting the price movement of Ethereum.
  • Think ahead: It is wise to work on a strategy before entering or taking a position in the crypto market. As a trader, you should avoid giving into emotions. Greed and fear are the two age-old emotions that can affect a perfect trading day.
  • Be cautious: Many exchanges offer trading on Ethereum’s price instead of owning it. They allow margin trade, allowing the trader to enter a market with less capital while making a significant profit. For example, you can enter a $1,000 position with just $100 as capital. If the trade goes as predicted by you, your profit gets magnified ten times. However, the losses would also be substantial if you make a mistake.It is advisable to invest an amount in an Ethereum trade that you can afford to lose. Do not use your retirement money for this kind of trade.

Final words


Ethereum is quickly gaining popularity as a cryptocurrency. Still, the question remains how do you know when the best time to buy Ethereum is? Unfortunately, it is challenging even for most seasoned investors to predict the next price surge or drop successfully.

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Frequently Asked Questions

It all depends upon the trading platform that you have chosen; you can start trading Ethereum with just a few dollars at hand. You can even leverage to trade for more. Nonetheless, you must also bear in mind that your losses could also magnify if you are to use leverages.

Ethereum’s latest upgrade from Proof-of-Work (PoW) to Proof-of-Stake (PoS) is referred to as Eth 2.0. Theoretically, this should reduce the gas fees, increase network participation, and streamline the blockchain application’s decentralized finance (DeFi). This may result in a price increase, but issues during the changeover may cause the opposite.

If you have an account on a derivative exchange, you don’t need to convert your cryptocurrencies into fiat currencies. However, if you have traditional brokerage services that operate fiat currencies, then, in that case, you may have to liquidate some of your Ethereum to allow trading capital.

When you buy Ethereum coins, you need a place to store them, an e-wallet, to be precise. An e-wallet has two elements: a private key and a public address. A private key of an e-wallet allows the user access to the e-wallet, while a public address is required to send Ethereum or other cryptocurrencies. Ethereum is stored in an e-wallet and is also called a public key. Thus, any cryptocurrencies or Ethereum coins are sent across public addresses or public keys.

Like cryptocurrency exchanges, cyber threats or theft can also target online wallets. Mt Gox Bitcoin exchange is an excellent example of a cyber attack. Until 2014, Mt. Gox was the largest global Bitcoin exchange. Mt Gox had 850,000 Bitcoin with an estimated value of $450 million in February 2014 before hackers attacked and cleaned off all the Bitcoin from the exchange. It is believed that the private keys of Mt.Gox were compromised as early as 2011. When a trader trades in Ethereum CFDs, such threats are mitigated since you are only dealing with the price of Ethereum and not the coin itself.

When the asset’s price exceeds its intrinsic value, it is called a “bubble.” A classic example would be the dot-com bubble between 1995 and 2001. The sudden boom in information technology boosted the stocks of firms irrespective of their profits or even the chances of succeeding. Then, finally, in March 2000, the market crashed.
It is quite challenging to determine the intrinsic value of cryptocurrencies. Even though many investors treat it like equities and hold them for a long time when in reality they are not, they do not even function like a real currency, making it all the more difficult compared to currency valuation. Caution is usually suggested while dealing with new technology. One cannot rule out the chance that Bitcoin and Ethereum are overvalued, and if a bubble does exist, it could very well be due to several new cryptocurrencies that market sentiments might drive. There have been times when certain stocks were overvalued and filed bankruptcy within a year. For example, since they were overvalued, went from IPO to bankruptcy in 268 days. Only time will tell if the market is overheating. In any case, there is an option of exercising CFDs for both long and short positions.
We have repeatedly observed that Bitcoin crashed after hitting all-time highs. Each high was replaced with a new high. Not only did Bitcoin crash, but all the other cryptocurrencies also crashed. Most cryptos are viewed on their potential and their future application in our ever-evolving advanced society. The question still remains that the intrinsic value of cryptocurrency will not be known until the institution accepts it. However, whether this suggests that cryptocurrencies are overvalued is a different matter.

A venture capital fund called The DAO in May 2016 raised roughly $168 million, intending to invest in projects through smart contracts based on Ethereum. In the same month, concerns regarding security vulnerabilities with the DAO, which could allow the stealing of Ethereum coins, were released in detail. In the same year, somewhere in June, 3.6 million Ether coins, roughly $50 million, were stolen from the DAO accounts. These coins were stolen just as vulnerabilities regarding security were raised in May.
It was then decided by the DAO and Ethereum community members to adopt a hard fork since it is a substantial chain to the Ethereum blockchain code to transfer the Ethereum tokens to a new smart contract and return them to their rightful owners. However, when certain members of the Ethereum community objected to the hard fork due to “immutability,” or the premise that the blockchain cannot be changed, Ethereum Classic was created.

ETH is the ticker symbol of ether.

When one considers all the cryptocurrencies, Ethereum seems the only likely candidate to replace Bitcoin, which is still the undisputed king of cryptocurrencies. However, 2017 witnessed significant market share being taken away by the young upstart, and the chances that Ethereum could make significant gains in the next few months cannot be ruled out.
Some experts are skeptical about Ethereum replacing the position of Bitcoin as the latter is a currency while the former’s primary function is to allow dapps and smart contracts. As a result, its status as a viable alternative currency could diminish.

Although the annual limit is restricted to 18 million Ethereum coins, there is no limit to the amount of overall Ethereum coins to be released. Even when processing power improves, this assures that there is always a consistent supply of ether on the market.

If you think about where to begin Ethereum trading, look no further. Contact us today on Blockchain Tradein; our team of experts is there to guide you as per your style of investing and trading strategy. Start your cryptocurrency trading today.

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