5 Strategies to Try When Trading XRP
Suppose you are considering buying, holding and selling the Ripple (XRP) cryptocurrency, one of the most popular altcoins out there. In that case, there are many different crypto strategies to try, some of which will be more relevant and successful than others.
Before spending any of your hard-earned money, the important thing to remember about trading in cryptocurrencies is that you are never guaranteed a return on your initial investments, no matter how certain the crypto trading strategy may first appear.
Things to know before trading XRP
The cryptocurrency market is extremely volatile and can go through frequent bullish phases, with some altcoins (any cryptocurrency apart from Bitcoin) witnessing substantial gains or losses.
Ripple (XRP), for example, is one such altcoin that’s currently growing at a fairly considerable rate and is worth investing in.
If you are considering investing in the cryptocurrency market and getting your hands on your own XRP while the market is experiencing somewhat of an uptick, then here are a few useful strategies you may like to try.
These tips will help you purchase and trade XRP tokens from a trusted site and give you a better idea of how to make future value forecasts of the XRP/Ripple market more precisely using certain key analytical tools.
There’s an art to trading XRP and making continued profits, which requires patience, keeping a close eye on the current XRP price USD, and certain other key skills.
It’s also important to remember that trading XRP (Ripple’s digital currency/coins) and holding them are two different investment methods that are unique from each other.
For example, if you buy and then hold Ripple, you become the proprietor of those XRP coins.
However, should you decide to trade Ripple, you are effectively hedging a bet on XRP’s value through various monetary subsidiaries such as futures, options, and CFDs (three financial products typically used by traders).
In this type of crypto trading, you don’t physically own the Ripple coins.
Instead, you have the right to the capital you initially invested in that coin, including the profits or losses that occurred during that trade.
Trading in this way eliminates the burden of owning those tokens and having to keep them safe.
Top tips and strategies for trading XRP
The entire process of purchasing, owning, and holding Ripple (XRP coins) as opposed to simply trading with derivatives, is far more costly and tedious and requires a separate wallet.
You must select a reputable XRP trading/brokerage website that’s licensed and regulated, one that is AML (Anti-Money Laundering) compliant and ensures you complete the Know Your Customer (KYC) process.
When you have found yourself a suitable cryptocurrency trading platform, here are some simple, helpful, and effective strategies you may like to try:
- Copy trading – this is a great technique for beginners starting out in crypto trading and enables you to effectively ‘copy’ the trades of experienced traders with successful portfolios
- Select trading investments – if you are in it for the long haul, buy XRP when the price is considered low. If you plan on trading the same day or grow your wealth based on falling prices, go for CFDs
- Understand risk management rules – To protect your investments from potential depletion of your entire trade/investment’s value (aka drawdown), follow basic risk management rules. Also, use any other trading features that can protect you while you’re not watching the markets, or for example, while you’re sleeping
- Analyse the state of the market on a regular basis – don’t forget that, like most cryptos, the XRP price can be extremely volatile. This can be affected by a range of factors, including significant actions by other traders, market events and other crypto news
- Systematic trading – find a strategy that works for you and stick to it. Also, try not to let your emotions rule any trading decisions you make
- Apply technical analysis – utilising the technical analysis strategy can help you pinpoint the best entry or exit point for a trade
Final note
Other top crypto trading strategies that can also be applied to trading Ripple and other cryptocurrencies include Crypto Bot Trading, Day Trading, Index Trading, HFT (High-Frequency Trading), and The ‘Moon Bag Strategy,’ Buy to Hold – also known as Hold On for Dear Life (HODL).
That’s not forgetting Range Trading, Scalping, The Long Straddle, Crypto Futures Trading, and Range Trading.
