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How to Trade NEO in 2023 - Complete Guide

By Alice Leetham - Updated 28 April 2023
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The rise in the popularity of cryptocurrencies like NEO has drawn in many new investors, and many want to learn how to trade NEO for a profit. The process of trading NEO involves buying at a low value and selling at a higher price. However, this is easier said than done.

This is a comprehensive guide on how you can trade NEO. You will figure out how to foresee future price fluctuations with greater precision using fundamental and technical analysis. If you need to trade NEO tokens, remember that it’s an ongoing undertaking that demands you remain mindful of NEO-related news and goings-on to manifest significant gains.

Table of Contents

What Is NEO Trading and How Is It Different From a Standard Purchase?

Before investing in NEO, remember that holding NEO tokens and trading them is different. Buying NEO implies you own the asset and reserve the option to hold, sell, and use it however you want. However, trading NEO means you bet on the token’s future value through derivatives offered by brokerage websites. In this situation, you don’t own the asset outright but purchase and sell subsidiary products. 

When you begin trading NEO, you will see the top three derivative products of NEO include the following: 

  • CFDs – Contracts for Difference or CFDs are monetary derivatives that mirror the ever-changing value of NEO without requiring the trader to purchase the asset. You can buy CFDs when NEO’s price is low and sell them high to pocket the difference. 
  • Futures – These are time-bound products that a trader needs to close at a predetermined date. When the value goes according to your expectation, you make a profit. Otherwise, you make a loss.
  • Options – These give traders a choice to close their orders or let the contract expire on the settlement date. If the trade is profitable, traders will use the contract; otherwise, they will discard it, paying only a small fee for the contract itself and not incurring a significant loss.

Traders can immediately purchase the derivatives and sell them, which makes it a much quicker approach to earn than holding NEO.

Compared with holding NEO tokens, trading gives users a faster approach to making profits. 

It is advisable to pick a registered and regulated broker to evade any scams. Top brokers furnish you with a wide assortment of highlights to deliver a superior trading experience. You have to remember that the nature of trading instruments and their features rely upon where the brokerage service is legally registered along with your own country of residence.

Numerous new traders go for copy-trading, which allows them to duplicate the moves of prominent traders on social trading platforms. Although this offers a superior possibility of success, as you are following the trading choices of experienced traders, at the same time, there’s some risk included. Prominent traders regularly have a huge volume which gives them a cushion to mitigate their losses, and following them without assessment may lead you to significant losses. With enormous volumes, their transaction-based charges amount to a negligible proportion of their profits, but that is not the case with new traders.

Where Can I Trade NEO?

Through a comprehensive review of different trading platforms, we have compiled a list of the best brokerage and exchange platforms for your NEO trading.

Online Brokers

Brokers are fundamentally trading websites where you can purchase NEO derivatives when the cost is low and sell them at a higher price. However, when trading using brokerage platforms, you never really purchase the NEO tokens. You actually purchase a contract that gives you the right to your initially contributed capital alongside any profit or loss you make on a trade order when it either closes or terminates. Except for a couple of brokerage sites, practically each trading stage today offers crypto derivatives.

Benefits of Using a Broker to Trade NEO

  • No need to buy NEO and manage storage and security 
  • No need to get a NEO wallet for safe holding 
  • Short-term method when contrasted with holding NEO coins 
  • A quicker way to make money than holding coins 
  • Enhanced profits through leveraged trading 
  • Start your investment with as low as $100 
  • Brokerage websites are registered as well as regulated for better security 
  • Transparency regarding expenses, charges, commissions, and fees
  • Wide range of technical analysis tools available

Derivative Exchanges

Initially, digital currency exchanges that sold NEO were centred on purchasing and selling the cryptocurrency after a simple signup process. Over the course of the last few years, a wide range of services, including exchanges, have extended their services to bring derivatives to the table. You can trade NEO on numerous exchanges without requiring a broker. OKEx and Binance are two of the top derivative exchanges that offer various types of derivative products, including futures, alongside the ability to go for leveraged trading.

Benefits of Using an Exchange to Trade NEO

  • More flexible than intermediaries as you can purchase and sell a range of coins 
  • Ability to pull out your NEO coins whenever  you need 
  • Exchanges bring a more extensive scope of digital currencies and altcoin pairs
  • More options for depositing and withdrawing your funds
  • A user-accommodating experience, unlike sometimes complex contracts on broker websites
  • Ability to engage in up to 100x leverage trading
  • Services of exchange and a broker rolled into one
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eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
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Plus500 is a leading provider of Contracts for Difference (CFDs), delivering Leveraged trading on +2,000 financial instruments, including Forex, Commodities, Indices, Shares, Options and Cryptocurrencies. CySEC license number (#250/14)
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OKX is a world-leading cryptocurrency exchange, providing advanced financial services to traders globally by using blockchain technology.
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Trading in digital assets is considered high risk. Digital assets are NOT backed by any government or central bank. The risk of loss in trading or holding digital assets can be substantial. You should carefully consider whether interacting, holding, or trading digital assets is suitable for you in light of your financial condition.

Our Step-by-Step Guide on NEO Trading

We have created an in-depth guide on how to start trading NEO, with each step carefully explained and detailed for your understanding.

1. Combine Fundamental and Technical Analysis

A wide range of crypto investment strategies requires aptitude in two distinct sorts of information assessment. Your goal is to handle the two kinds of data and settle on an educated decision regarding your trade. 

The first one is fundamental information, which includes:

  • News – Being a globally traded resource, the price of NEO can be influenced by a huge number of variables. That is why it is essential to watch out for the most recent turns of events, guidelines, analyses, and practically anything that can drive the market. 
  • Supply and Demand – Just like some other digital resources, NEO can be subject to unpredictability if supply or demand changes. Right now, there’s an inventory of 100 million NEO tokens and an increase or decrease in that sum could affect the token’s value. 
  • Follow the General Rule of Economics – If the demand of NEO increases, the price will also increase, but if the supply increases, the price will fall. Be aware of how these variables interact.

Technical analysis involves contemplating information, stats, and numbers to make an authentic proof-based decision. Depending on a different assortment of insights, you can assess the likely future value of NEO, which can help you decide on educated choices. Probably the most well-known technical markers utilised by traders include:

  • Moving Averages – This indicator takes into consideration a subset of the past values of NEO. A moving average “smooths out” price data to mitigate the effects of short-term fluctuations and give a better idea of the general trend.
  • Relative Strength Index – This exhibits market energy and gives an outline disclosing to you whether NEO has been overbought or oversold. An increase in value with an overbought signal infers that the price of NEO is likely to fall. However, a decrease in value with an oversold signal shows that NEO might be about to take off in a trend reversal. 
  • Moving Average Convergence Divergence – When we assess the contrast between a 26- and 12-period exponential moving average (EMA), it is termed Moving Average Convergence Divergence (MACD). It is an exceptionally valuable pointer that reveals to you when traders are moving from buying to selling and vice versa.

If you are hoping to become a specialist trader, you can assess other technical pointers too, including various diagrams and chart patterns, Fibonacci levels, and depth charts.

2. Choosing a Trading Strategy

Although each trader is hoping to bring in cash, you need to recognise the best procedure for yourself. Here are a few of the top NEO trading techniques you can depend on.

  • HODL: ‘Hodl’ is just an incorrectly spelt version of ‘hold’, famous as a joke in the NEO community. It implies that you purchase and hold your NEO coins for a long time. This procedure involves purchasing low and holding for quite a long time, maybe years before you sell at an extraordinary price differential. 
  • Day Trading: NEO price can be very volatile throughout the day, giving traders plenty of opportunities to exploit. These value fluctuations can be used to open and close orders that can be highly profitable. 
  • Swing Trading: This is quite like day trading, yet the trading times are somewhat longer, as they range from days to a few weeks. This must be done with a profoundly precise technical examination of the data to determine when a “swing” in price will begin.
  • Hedging: It is a risk minimisation technique where you secure your capital by opening a supporting position against your initial investment. This may seem counterintuitive, but it ensures that a profit can be made whatever the market’s outcome. 
  • Scalping: Once again, this method is very like day trading except for trading times being as short as a few minutes. This returns smaller gains. However, you additionally have the opportunity to make more trades.

There is a broad scope of trading techniques, including news and copy trading. Every technique has its upsides and downsides. Ultimately, you have to choose which method works for you the best.

3. Select an Appropriate Platform for your Needs

You need to be on the right trading platform to succeed as a trader. The primary thing you need to do is choose whether you need to go with a devoted broker or a derivative exchange. While the two are comparable, the broker will have a trading-centric interface. They also have bigger trading volumes with reasonable commissions and other trading charges. Compared to brokers, NEO exchanges are more adequate for individuals willing to take a higher risk through leverage or already have an account for buying crypto.

Platforms that aren’t compliant can be shut down at any minute, and they can also turn out to be scams or outright frauds, so do your research before signing up to any platform.

4. Setting Up Your Account

After going through the previously mentioned step, you need to sign up on the platform. You just require an email address for the first stage. When the account has been confirmed through your email, you’ll go through an identity confirmation measure which is necessary under Anti-Money Laundering (AML) and Know Your Customer (KYC) guidelines. You can give any sort of government-provided ID to validate your identity. 

After you have validated your identity, you can set aside the base deposit in either digital currency or fiat cash subject to the trading service you’ve picked. Go to your wallet and select the deposit choice from where you can choose any of the payment methods. 

5. Prepare your Trading Position

Now, go to the Trade section, and you’ll see an interface. Various exchanges and brokers utilise a wide range of designs. However, you can always see some common options on the interface, such as buy/sell, the order book, and so on.

If you are new to NEO trading, you might feel a bit overwhelmed by some of the trading jargon. Following are a few pieces of trading terminology you should be aware of:

Short or Long Positions?

You open a long position when you think the value of NEO will rise. You purchase low and sell high and keep the profits. What happens when you believe the cost will go down? You open a short position. For this situation, you sell high then buy low, making a financial gain while the market retreats. Shorting can be pretty risky, so you need to manage your risk. 

Limit or Market Order

An order where the NEO token’s market value is used when initiating a trade is called a market order. Since you don’t set the value, you see only purchase and sell options if you have picked the market order. If you are searching for trades at better value, you’ll need to go for a limit order. Here you’ll have to indicate the price you are aiming for, along with the total amount of NEO coins. A market order can be executed right away, while a limit order may require some time to execute as the market converges on your chosen value.

Trade Position Amount and Leverage

Trade position sum is essentially the capital you’ve put into a trade. You can expand the profit potential by engaging in leveraged trading so you can capitalise on a bullish trend. On trading sites, you can see leverage as proportions. For example, 10:1 means 10x leverage. When you put in $100, your loss or profit will be determined based on a $1,000 figure. While this technique can amplify your profits, it can also lead to greater losses.

Risk Management: How to Decide the Right Stop-Loss and Take Profit values for Your NEO Trade

Stop-loss orders empower traders to lessen their losses when the market doesn’t line up with their forecasts. You need to type in two key NEO prices — the first is the stop value, and the second is the cutoff, or limit, which is a value at which you want to sell your NEO coins when the trade has been triggered. Depending on your technical assessment, you can employ stop-loss orders just below the support threshold when you realise that the crypto market is likely to bounce back. In the event that NEO’s value proceeds to decrease and arrives at the support level, the trade gets initiated and your position is closed to minimise losses.

Review and Execute Your NEO Order

Re-verify all that you have entered and guarantee every one of the choices is as expected before you put in a trade. After you are sure, you can begin trading by pressing the ‘Sell’ or ‘Buy’ button.

Close Your Trade for Profits or Limit Your Losses

An order that you execute with technical assessment is highly probable to turn a profit. You can either close your orders yourself or depend on the take profit mechanism which consequently shuts the trade when a specific amount of profit is reached. Using take profit limits with stop-losses can reduce your risks.

Frequently Asked Questions

Is NEO trading the correct decision for me?
If you’re searching for a secondary income, then trading NEO and other cryptocurrencies might be a good option. You cannot replace your primary income with crypto trading right away, however.
Should I HODL or trade Neo?
If you believe that the price of the NEO token is going to increase in the long run, then HODLing may be a better strategy.
What is the difference between NEO futures and options?
Futures put a required commitment on the trader to close the order on a predetermined date. In case you're trading options, there's no such commitment, you have the option to buy at a specified date or you can choose not to.
I hold NEO, would it be advisable for me to sell them for fiat to begin trading?
Contingent upon the brokerage or exchange, you can swap your NEO tokens to get BTC and begin trading.