5 Things you must know to do Ethereum Trading5 Things you must know to do Ethereum Trading Ethereu
Posted: Jun 08, 2018
Ethereum is the second most valuable crypto project in the ecosystem. Much like Bitcoin, Ethereum is a blockchain; a distributed ledger, but also an open-source platform for applications to run "exactly as programmed without fraud, censorship or third-party interference.
Started in 2014, Ethereum has become mainstream, mostly for its better-than-bitcoin capabilities that include turing completeness, nimble programming, and open-source nature.
Ether is the native coin of the Ethereum blockchain, used to pay for the transactions and services within the blockchain. However, any project that exists on Ethereum can issue its coins, called differently as ‘tokens’. Akin to the stocks on a company, tokens or ‘altcoins’ are the means to use or to own a part of the token issuing project. And, much like stocks, they can be traded for gains and crypto success.
How to get started with Ethereum Token Trading
Step 1: Get yourself an Ethereum wallet
An Ethereum wallet is your gateway to decentralized applications, including an Ethereum exchange. Crypto wallets allow you to store and secure cryptocurrencies. An Ethereum wallet, particularly, allows you to hold and secure ether and other crypto assets built on Ethereum, including ERC20 tokens, as well as conduct Ethereum wallet trading.
In order to facilitate trade, you must first install and add balance to your Ethereum wallet.
Popular Ethereum wallets include:
Fund your account with a credit card/bank transfer. Note that transferring "fiat" money (or $ amount) into your account via a bank transfer can take as long as a week, so make your choice accordingly.
Step 2: Sign Up for an account on an Ethereum Trading Exchange
Centralized exchanges are best suited for converting fiat or regular human currency into a Cryptocurrency. However, note that Centralized exchanges (CEXs) store all public keys in a centralized server.
Decentralized exchanges (DEX), especially the ones based on Ethereum blockchain, hold nothing of yours and exist to facilitate transactions directly between people. It’s a network that’s trustless and hence entirely safe and secure. An excellent place to start would be an exchange like WandX. Here, not only do you trade ERC20 tokens, but the platform also allows you to club a selection of ERC20 tokens into ‘baskets’ and trade them at once, saving you a ton on gas fee and allowing you to manage your risks better. It’s easy to use and tuned to enable liquidity, which is excellent if you are in this for quick wins.
Step 3: Know to find tokens to buy and sell
One can pick good performing ERC20 tokens or tokens of potential from a quick browse of etherscan.io. Just look at the number of token holders and community strength around that token. The logic is just that the bigger the community of people supporting a project, the more likely it is to be a token worth paying attention to.
Step 4: Follow the pros
If you are only just starting with Ethereum trading, it’s likely you’ll end up catching the short end of the stick during the initial few runs. For which, it helps to follow in the footsteps of those who’ve been trading Ethereum for a while. A good place to start would be a subreddit or twitter - two channels most preferred for crypto conversations. Follow key crypto traders and reditters actively talking trading tips and trends, and you’ll see yourself steering in the right direction soon enough.
Subreddits to follow:
Twitter Handles to follow:
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Step 5: Stay on top of the trends and analyze tokens for wins
There’s no shortage of websites packed with information on best performing crypto portfolios and best decentralized exchanges to be on. Of course, nothing from these websites should be taken without a pinch of salt. Be the master of your trade and follow demand-supply patterns with the scrutiny of a hawk.
A few good sources of information should be
CoinMarketCap- Gives details about each currency with charts.
Cryptocoin - Provides data altcoin market and financial metrics.
TradeBlock -Here you can find all the industry related topics including trading and regulations.
CoinGecko- It ranks cryptocurrency based on developer activity, community, and liquidity.
Pro Tip: A few weeks into Ethereum trading, consider looking to accumulate healthy portfolios. It’s an excellent way of getting your hands on a good mix of digital assets. For example, on a platform like WandX you can create and trade a portfolio or a ‘token basket’ with your peers. A token basket is a group of ERC20 Tokens bundled together. This could be, for example, a mix of 10GNT+ 10GNO+ 10WAND tokens. This basket is created by the owner of the Tokens and is someone who wants to manage their portfolio smartly and uses smart contracts to create such a basket.
For all the talk of high volatility and risk, crypto trading is effectively more comfortable, secure and far more convenient than a conventional one. It involves much the same kinds of risks and raises similar, if not more, caution, but there’s no denying that Ethereum trading and ERC20 token trading will transform the ways of conventional asset trading channels and inch towards becoming smarter modern-day norms. Trade well, trade smart!
Wandx is a decentralized exchange where you can trade your Erc20(Ethereum) tokens with a decentralized exchange platform that provides trading through secure smart contracts based on ethereum blockchain.