How to trade on Ether

Are you ready to trade on Ether? Follow these four steps

1. Decide how you want to trade on Ether
2. Learn the factors that move the price of Ether
3. Choose an Ether trading strategy
4. Make your first trade on Ether

Decide how you want to trade on Ether

Trading on Ether follows the same method as other major cryptocurrencies, which are traditionally traded on an exchange – involving buying and selling the selected currency.

However, you can also trade on Ether by speculating on its price movements by using CFDs. This financial product is a leveraged derivative, meaning you can take a position on the market without having to own the underlying cryptocurrency.

It also means that while your profits may be amplified, your losses can exceed your initial deposit. Make sure to manage your risk before opening your position.

With us, you won’t sell or buy Ether on an exchange, but instead you will be trading on Ether prices through our CFD offering.

You can trade CFDs on our award-winning platform,¹ or you can trade on Ether CFDs via MetaTrader 4 and ProRealTime . Plus, you’re more likely to have your orders filled at your desired price due to our large client base and liquid cryptocurrency markets.

Alternatively, you could take a position on our Crypto 10 index – an index tracking the price of the top ten cryptocurrencies, including Ether, weighted by market capitalisation.

Trading on Ether with CFDs

A CFD is an agreement to exchange the difference in price of Ether from when you opened your position to when you close it.

When you trade CFDs, you’ll open your position with an initial deposit that is a fraction of your total market exposure – also known as margin. If you think the price of Ether is going to fall, you’d ‘sell’, or ‘buy’, depending on whether you think the price will rise.

But, because the margin deposit is less than your exposure, your potential losses may exceed your deposit. It’s important to employ a risk management strategy to control your exposure.

Trading on Ether through an exchange

You can trade on Ether by buying it directly through the cryptocurrency exchange. To do this, you’ll need to create an exchange account and put up the full value of the asset to open a position. This will enable you to store Ether in your virtual wallet – until you sell it. Unfortunately, we don’t offer these services.

Here’s how trading on Ether with CFDs compare with buying the crypto through an exchange.

What moves the price of Ether?

Ether may have less exposure to many of the economic and political factors that affect traditional currencies, but its value is influenced by a host of unique dynamics:

• Market manipulation

A lack of regulation means traders may be able to influence the market by buying and selling in significant quantities

• Availability

Unlike Bitcoin, there’s no limit on the supply of Ether. Even so, many Ether units will continue to be added and lost over time, causing its availability to fluctuate

• Wider acceptance

The Ether ecosystem is constantly changing as adoption of the cryptocurrency grows, both among independent investors and those in industry

• Government regulation

Governments are still adapting to cryptocurrencies, with considerations for supervision mechanisms and other new guidelines

• Media coverage

Negative press, particularly surrounding security lapses and hacks, can impact public perception of Ether’s value

• Technological advances

Ether’s integration into payment systems, crowdfunding platforms and more could raise its profile, while confidence in traditional systems may begin to erode.

Ether trading strategies

1. Ether day trading

Make the most of daily volatility in Ether’s prices. Day trading CFDs means you’ll open and close a position within a single day – ensuring you don’t have overnight market exposure. If you don’t hold any positions at the cut off time, then you'll avoid any overnight funding charges. If you’re looking to profit from Ether’s short-term price movements, this strategy could be for you.

2. Ether swing trading

Swing trading relies on taking advantage of short-term price patterns, based on the assumption that prices never go in just one direction in a trend. When swing trading on Ether, you’ll try to make money from both the up and down price movements occurring in a narrow timeframe.

Ether swing traders tend to be more interested in small reversals in Ether prices. If you decide to follow this strategy, you’ll try to spot these reversals in advance, and trade to make profits from smaller market movements instead of a broad trend.

3. Ether scalping

Scalping is a short-term trading strategy that seeks to make small, frequent profits by focusing on a high-win rate. This is based on the theory that you can easily build a large trading account by focusing on small profits through frequent trades than placing fewer trades and letting profits run. Scalping requires a strict exit strategy, as quick market movements can result in losses that counteract your profits – especially in volatile markets like cryptocurrency.

Most scalpers close their positions before the end of the day to avoid overnight funding charges eating into their profits.

4. Ether hedging strategy

By hedging Ether, you’re attempting to reduce your risk by balancing out your exposure on an existing position with a second, opposite position. This is to protect you from unfavourable Ether market movements.

For example, if you hold Ether but are worried about short-term cryptocurrency depreciation, you would open a short position. If the market price for Ether falls, all the profits from the second position would offset the losses on the first.

However, by hedging, you’ll incur fees on both positions – which should be accounted for in your calculations.

Automated Ether trading uses autonomous algorithms to open and close trades according to set rules, like points of price movements. Once the market conditions match the predetermined criteria, the trading algorithms (algos) can execute a buy or sell order for you.

You’ll be able to algorithmically trade on Ether with us through partnerships we have established with respected platforms, including MetaTrader 4 and ProRealTime , as well as our native application programming interfaces (APIs).

By trading on Ether CFDs, you’re using a leveraged derivative to speculate on the crypto’s price movements without ever taking ownership of the currency itself. This enables you to go long or short on the cryptocurrency, with the accuracy of your prediction and the size of the market movement determining your loss or profit.

Ready to start trading on Ether? Follow these steps:

• Open a trading account or log in
• Build a trading plan
• Do your research
• Manage your risk and place your trade
• Monitor and close your position

Open trading account or log in

Opening a CFD trading account takes just a few minutes. More importantly, there’s no obligation to fund your account until you’re ready to trade.

To practise your Ether trading without risking any capital, you can open a demo account. With AUD20,000 in virtual funds, you can learn more about trading on Ether markets on our award-winning platform for free.¹

Here’s how to trade on Ether CFDs with us:

Build a trading plan

A trading plan is a unique, comprehensive decision-making tool for your trading activity. It helps you decide when and how much to trade, and is tailored for specific assets like Ether. Your trading plan should consist of the following:

• Your motivation for trading
• The time commitment you want to make
• Your trading goals
• Your attitude to risk
• Your available capital for trading
• Personal risk management rules
• The markets you want to trade
• Your strategies
• Steps for record keeping

Do your research

If you want to trade on Ether, it’s necessary to stay up to date with important news events that could impact the Ether markets. Cryptocurrency markets can be quite volatile, which means it is crucial to stay abreast of developing stories and news. To help with this, our platform features expert analysis from our in-house team, and a live news feed.

Manage your risk and place your trade

Since you’ll be opening your position on margin, your losses could exceed the margin deposit if the market moves against you. To help manage this risk, you can set a stop-loss level in the deal ticket. If triggered, the stop-loss will automatically close your position and cap your risk.³

To lock in any profits if the market moves in your favour, you can also enter a limit level. Here, your trade will be automatically closed to secure positive returns as soon as the market reaches the price you’ve set.

Remember that, when trading CFDs, each contract will specify an amount per point of market movement. If the CFD is for AUD10 per point, and the underlying cryptocurrency price moves 10 points, your profit or loss – excluding costs – will be AUD100 per contract.

Once you’ve set the number of CFDs you want to trade, your stop-loss and limit levels, you’d open your position by clicking on ‘Place trade’.

Monitor and close your position

If you’d like to close your CFD position, click on the ‘positions’ tab on the left menu. Select ‘close position’ and choose the number of CFDs you’d like to close.

Alternatively, open the market’s deal ticket and take the opposite position of the one you have opened – buying if you sold, or selling if you bought. This is on the basis that the client has selected net off instead of force open.