How to create a trading strategy for Ethereum (ETH): a beginner’s guide

The trading of cryptocurrencies has become more and more popular in recent years, many investors and traders seeking to capitalize on the potential of digital currencies like Ethereum. Ethereum is one of the most precious and negotiated cryptocurrencies, with a market capitalization of more than $ 400 billion. In this article, we will provide a step-by-step guide on how to create a trading strategy for Ethereum (ETH) and start with your own cryptocurrency investment course.

Understand the bases of Ethereum

Before you can create a trading strategy, it is essential to understand the bases of Ethereum:

• What is Ethereum? : Ethereum is an open source blockchain platform, decentralized and transparent which allows the creation of intelligent contracts and decentralized applications (DAPP).

• How does Ethereum work? : Ethereum operates on an algorithm of evidence of work, which obliges minors to resolve complex mathematical puzzles to validate transactions. This process is known as mining.

* Key features : The main features of Ethereum include its native cryptocurrency, its ether (ETH), its gas costs for the processing of transactions and its intelligent contract functionality.

Types of trading strategies

There are several types of trading strategies that you can use during Ethereum trading:

• Day Trading : Buy and sell ETH in a single day to enjoy market fluctuations.

• fork trading

  : Hold a position for an extended period (for example, 5-10 days) in the hope that the price will remain stable or will increase over time.

• Swing trading : Positions of purchase and detention for a shorter period than trading of the fork, but longer than day trading.

• Trading position : Sell ETH at some point and buy it from another to take advantage of price differences.

Guide step by step to create an Ethereum trading strategy

Here is a step -by -step guide to create your own Ethereum trading strategy:

• Choose a broker : Select an online broker that offers Ethereum Trading, like Binance, Kraken or Coinbase.

• Configure a trading account : Create a new account with your chosen broker and finance it with Ether (ETH).

• Understand the market : Study the price table, trends and technical indicators of Ethereum to understand its behavior.

• Define your risk management rules : Determine how ready to lose by business or overall in a day.

• Choose a trading pair : Select the ETH / USD (or other pairs) that align with your investment objectives.

• Develop a commercial plan : Depending on your research and understanding, create a trading plan that describes your entry and exit points, risk management strategies and profit objectives.

Example of trading plan

Here is an example of an Ethereum trading strategy:

* Entrance point : Buy ETH / USD at $ 400 with a position size of 10%.

* STOP-Loss : Sell ETH to $ 380 to limit losses (10%).

* Target profits : sell ETH to $ 420 to take advantage of the price increase.

* Risk management rule : Limit your overall risk per day to 5%.

Tips and tips

• Stay informed but not too invested : Stay up to date with market news, trends and analysis, but avoid overcoming a single business or strategy.

• Use technical indicators and graphic models : Use technical indicators, such as mobile averages, RSI (relative force index) and Bollinger strips, to help identify the possibilities of potential trading.

• Diversify your portfolio : Repair your investments on several trading assets and strategies to minimize risks.

Conclusion

The creation of a successful Ethereum trading strategy requires careful planning, research and execution.