Although bitcoin grew from $1000 to $19000 by December in 2017, ether’s performance in the year was equally impressive. Being the second-largest cryptocurrency, it started the year at about /$7 and ended it at $750. By May 8, 2018 ether had a capitalization of over $25 billion in the market. However, before starting to trade ether, you must understand the difference between Ethereum and ether. Ethereum is the decentralized network whereas ether is the payment currency on this network. Below are the tips for effective Ethereum price analysis.
Risk Management is Key
Ether may have exceptional prospects, but cryptocurrencies are usually volatile assets. Hence, it is vital to manage risk as much as possible. To achieve this, begin your trading with small amounts as capital. Then you can increase the capital when you have more trading experience. Moreover, you may have to start with low leverage or no leverage where possible. The approach will change with time as you gain in confidence. Besides, ensure that you set a stop-loss. It is a risk management tool which is designed to minimize losses.
Control Your Emotions When Trading
If you have been in commodities or currencies trading, you may already be familiar with volatility. As such, it is normal for a cryptocurrency to rise to 50% in a day and fall 30% the next day. Therefore, do not use your emotions to make a trading decision. Instead, use a well-defined strategy and analysis to trade ether. Also, you can try your strategy on a demo account before live trading. Furthermore, define your entry and exit points observing high discipline to avoid any random moves.
Create a Balanced Portfolio
The moment you start trading ether, you may also opt to dabble in other currencies. Although this is an excellent idea, ensure that you select coins carefully and avoid putting all your capital in a single coin. Moreover, you can diversify your portfolio to include other assets like Forex. Most of the traders use cryptocurrencies to windbreak their forex portfolio because they are not impacted by inflation or the country’s monetary policy.
Conclusion
Ethereum price analysis has maintained a second spot after bitcoin for most popularly traded crypto. Ethereum refers to the decentralized network, while ether is the currency. Hence, when trading, you will be trading ether rather than Ethereum. Moreover, other than being crypto, ether is used to pay for software services on Ethereum network. When it comes to price predicting trends in the market, you can use technical tools such as MT5 that are available on popular trading platforms. Markets are incredibly volatile and fast-moving, and technical analysis can be of help you identify when to enter or exit a trade.
