How to Trade Tron in 2024 - Complete Guide
TRON (TRX)
...
As blockchains and cryptocurrencies keep gaining traction in 2024, the values of a wide range of tokens have seen a generous lift, including Tron (TRX). This unexpected price hike is currently drawing in both new and experienced traders who want to exploit market volatility to make a profit.
This guide will show you how to buy and sell Tron if you are beginning your journey as a Tron trader. You will find out about fundamental and technical analysis, which will help you make more precise forecasts of Tron’s value. You will also be able to develop well-informed TRX trading strategies after reading this piece.
What is Tron Trading and how is It Different from a Standard Purchase?
Numerous new traders think investment and trading are the same thing. That is a misconception. Investment involves holding Tron coins for the long run in the hope of asset appreciation. On the other hand, trading involved capitalising on TRX’s price movements using derivative products like futures, options, and contracts for difference (CFDs). With derivatives trading, you don’t own Tron tokens, just the right to the capital you’ve contributed in addition to any benefits or losses you may make once the trade is closed.
There is a wide range of TRX derivatives that you can use to open your positions. Having said that, there are just three that are mainstream in trading circles.
- CFDs – Contracts for Difference or CFDs are financial derivative products that empower traders to bet on the value of their representative asset, for example, Tron. Since they’re just a portrayal of value, you don’t need to purchase Tron and store it. CFDs allow you to speculate on TRX price moves easilyTRX price moves.
- Futures – This is another type of derivative contract that requires traders to close their position at a predetermined date. If their value forecast is correct, they reap monetary benefits. If not, they have to absorb the loss.
- Options – This type of contract is sometimes used over futures because of its adaptability. It doesn’t bind the trader to execute their buy order, but instead gives them the choice to do so. In the event that the value expectation is right, they can decide to execute the contract on settlement day. If not, they don’t have to execute the trade, and the only loss incurred is that of the contract’s cost (the premium).
With derivative contracts, you can purchase and sell Tron more rapidly and in a far more convenient manner. Assuming your goal includes procuring quick profits, derivative contracts give you a significantly more advantageous way than buying and holding TRX coins, which can be a complex and drawn out procedure.
You need to remember that when you select a brokerage or exchange for trading, you should pick one that is registered and guarantees adherence to Anti-Money Laundering (AML) and Know Your Customer (KYC) guidelines. Also, note that the availability of specific derivative contracts depends on the country in which you are located, alongside the country where the platform is registered.
Perhaps the most popular strategy for new traders is copy trading, where they mimic the trades of seasoned professionals. While this is one of the most attractive features of social trading platforms, you need to bear in mind that while this improves your odds of opening profitable positions, it can likewise be a very risky business.
Experienced traders frequently trade with high volume and their expenses are very low compared to their trading volume. In addition, they hedge their positions as a risk management measure. For these reasons, don’t blindly follow veterans but perform your own fundamental and technical analysis instead.
Where Can I Trade Tron?
We have surveyed all the well-known platforms and shortlisted the best to ensure that you settle on an educated choice.
Online Brokers
Online brokers empower you to trade Tron so you can buy at a lower value and sell high to make quick profits. You don’t really purchase the coin when you trade through a brokerage service. You simply buy an agreement that gives you the right to claim the capital you’ve contributed alongside any benefits or losses you make when your position is closed.
Benefits of Using a Broker to Trade Tron
One of the significant reasons traders pick trading through derivatives is speed and comfort. Since you’re not actually buying the tokens, you don’t need to manage the issues related to purchasing and holding them. Aside from that, you can expand your benefits through leveraged orders and begin trading with a starting balance as low as $100. Brokerage services also conform to KYC and AML rules to give you a risk-free trading platform, and they have to maintain a degree of transparency regarding trading expenses.
Derivative Exchanges
Earlier, cryptocurrency exchanges were centred on purchasing and selling digital currencies such as Tron. As of late, the arrival of digital currencies as a speculation and investment vehicle has pushed exchanges to bring derivative contracts to the table. A majority of exchanges today offer futures, options, and other subsidiary contracts for Tron. If you have made an account on one of the top exchanges like Coinbase, you don’t have to sign up elsewhere to begin trading. Besides, exchanges additionally empower you to leverage your capital, which means you can trade with more money than you have. However, leveraged orders are exceptionally risky, multiplying losses as well as profits, and you need to limit your risk when opening such orders.
Benefits of Using an Exchange to Trade Tron
Tron exchanges are often more user-friendly and flexible than brokers and allow you to trade TRX against a broader range of other digital assets like Bitcoin and Ethereum. You additionally get the ability to pull out your Tron tokens at whatever point you need them. Aside from that, you get a greater number of payment methods to deposit and withdraw your funds. Exchanges are, for the most part, easier to understand compared with broker sites, which can be quite complex for newbies. With a crypto exchange that offers derivatives, you can open leveraged orders, and you get the services of a broker and an exchange on a single platform.
Our Step-by-Step Guide on Tron Trading
To help you on your trading journey, we have made a definitive guide that takes you through trading Tron on broker and exchange platforms.
1. Combine Fundamental and Technical Analysis
Cryptocurrency trading includes qualitative and quantitative assessments that help you to improve your profitability. Fundamental analysis refers to an evaluation of the properties of Tron itself and consists of the following:
- News – Being one of the most mainstream digital currencies, Tron’s value can be influenced by many variables. It would help to keep yourself updated about the news identified with the coin, including any innovations, new turns of events, and updates.
- Supply and Demand – Like any other product on the planet, market focus can also influence the value of Tron. As of now, there are more than 71 billion TRX tokens available for use out of a total supply of 100 billion, and any change in their supply can affect the value.
- Follow the General Rules of Economics – Price and demand are linearly correlated while price and supply are inversely related. This implies that if demand rises, the price will surge too, but if supply expands, the price will fall.
Technical analysis (TA) involves examining statistical information and facts to draw meaningful results that can help you settle on proof-based trading choices. Key technical pointers include:
- Moving Averages – This pointer considers past Tron values at standard spans to determine TRX’s average price development. Moving averages are changing consistently and enable traders to distinguish patterns and predict how the price will behave in the following days.
- Relative Strength Index – Showing oversold and overbought pointers, the RSI is about the market sentiment related to Tron. When TRX’s price sees an increase with an overbought indication, it implies that the price will fall soon. Then again, if the price declines and is accompanied by an oversold indicator, it means a potential uptrend.
- Moving Average Convergence Divergence – This specific marker calculates the difference between a 12- and 26-period exponential moving average, or EMA. It is named Moving Average Convergence Divergence (MACD), and it’s used to recognise when traders are going to buy TRX.
2. Choosing a Trading Strategy
Each trader wants to boost their profits and can use a wide range of strategies to do so. How about we examine the most mainstream trading methodologies so you can distinguish which one suits your needs and trading goals the best?
- HODL – This is an incorrect spelling of ‘hold’, which became well-known as part of a viral rant posted by a Bitcoiner. This trading system involves a long process, as you buy Tron tokens and store them for quite a long time, even years, before you cash out.
- Day Trading – This methodology includes everyday trading where traders endeavour to gain by making the most of Tron value changes. This procedure incorporates examining quantitative and subjective factors to purchase Tron as low as possible and sell as high as possible.
- Swing Trading – It resembles day trading, but the trade duration can be a couple of days or weeks. Due to the extended time of orders, this methodology requires robust technical analysis.
- Hedging – This is the way toward limiting your risk by taking a position against your primary order. It implies that if the Tron value doesn’t react as indicated by your forecasts, you can close your order without taking a lot of losses.
- Scalping – This methodology is additionally similar to day trading but it involves limited span trades that don’t last in excess of a couple of minutes. While the profits aren’t great, traders have the chance to open and close different positions during the day.
3. Select an Appropriate Platform for your Needs
The first decision that you need to make before trading Tron is picking the best service for your needs and trading targets. Features vary from one service to another, and you need to evaluate every one of the features to guarantee you are maximising your profit potential. Broker services are heavily trading-oriented when contrasted with exchanges and generally empower you to trade larger volumes. In any case, when you pick an exchange that offers derivative contracts, you can gain access to a superior range of cryptocurrencies and altcoins like Tron for trading. On exchanges, you have the ability to engage in leverage trading as well.
Regardless of whether you pick a brokerage or an exchange, you need to ensure that it is registered and is compliant with KYC and AML guidelines. Services that are either not registered or don’t conform to KYC and AML guidelines can be shut down with no warning, and are likely to be fraudulent.
4. Setting Up Your Account
Whenever you have picked your platform, the next step is to join. Use a solid password and give a secure email address. You will be sent an email for account validation. After you’ve gone through the account validation stage, you will have to confirm your identity for KYC and AML purposes. You can give any government provided ID for this, along with proof of address and a picture of yourself for confirmation.
The following step includes depositing your seed capital that will be used to place your first orders. You can usually use both digital assets, like BTC or ETC, and fiat money to make a deposit.
5. Prepare your Trading Position
When you have made an account on a trading platform and deposited your seed capital, you can start trading TRX by tapping on the ‘Trade’ button. You will see a wide scope of interfaces on various trading services but there will be a number of common features, including the order book, a trading panel, and price charts.
Short or Long Positions?
When a trader believes that the TRX coin’s value will see an increase, they have the option to open a long position, which involves purchasing at a lower price and selling high. However, on the off chance that the trader believes that the value will decrease soon, they have the option to open a short position where they bet against the value of TRX. This is called shorting and can be quite risky. It should therefore be executed with proper risk mitigation. You will lose out on your short position if the value of TRX increases rather than decreases.
Limit or Market Order
When an order uses the market value of Tron for trading, it’s known as a market order. To execute market orders, you just need to enter the sum you want to purchase or sell. If you need to buy or sell at a specific value, you can make a limit order where you are required to enter the value at which you want to purchase TRX. It might take some time to execute limit orders, as you will have to wait for the market price to reach your limit price for the trade to execute.
Trade Position Amount and Leverage
Your trade position amount is the total sum you have put into an order. You have the alternative to augment the use of your trade position by opening leveraged orders, which empowers you to profit from a bullish trend in the market. Trading services specify leveraged trading terms of proportions. For instance, 20:1 implies you have 20x leverage, and if you have contributed $100, your financial gains or losses will be determined as though you’ve contributed $2,000.
Risk Management: How to Decide the Right Stop-Loss and Take Profit values for Your Tron Trade
When the value of Tron coins doesn’t react as indicated by your expectation, you can use stop-loss limits to restrict your losses. Stop-loss orders are not difficult to use, as you simply give two numbers. First is the stop value, the price at which your order will be activated, and the second is the limit value, the price at which you will actually buy or sell tokens.
Review and Execute Your Tron Order
Before opening your position, ensure that every one of the values you’ve entered is right and you have picked the desired options. This may require some time at first but will become a habit as you become more experienced.
Close Your Trade for Profits or Limit your Losses
Traders who have done their research alongside technical analysis are more likely to make good trades. You can close the position yourself or use the take-profit option which, closes your trade automatically once Tron has arrived at a specific value.
Other Considerations
Before you jump in and start trading Tron for the first time, make sure you review the brokers and exchanges available to you and choose the right one for your needs. Choose CFDs or futures, depending on your preferences, and find a fee structure that works for you.
Be sure to stay up to date with the latest news relating to Tron in order to front-run the market. You need to have the most up to date information to trade competitively.
With all this considered, you are ready to begin trading.