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How to Trade Ethereum in 2022

Last updated 26th Sep 2022
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Within this article, we’ll be looking at all the things you need to know about trading one of the most popular cryptocurrencies on the market today, Ethereum (ETH).

In addition, we’ll be telling you everything you should look out for and the different methods you can utilize.

Ethereum is a well-known and widely traded cryptocurrency with a market cap of around $550 billion. This guide will tell you where you can trade Ethereum and answer some frequently asked questions.

Best Ethereum Trading Brokers

If you want to start trading Ethereum, check out the table below for a list of top trading brokers online.

How to Trade Ethereum

To trade cryptocurrencies like Ethereum, you’ll need to follow the points below.

What Do I Need to Trade Cryptocurrency?

The first thing you need to consider is what you want to get out of cryptocurrency trading.

For example, if you’re going to buy and hold your coins for the long term, you’ll need a private wallet to store your coins.

If you’re looking to trade on a regular basis, then an account on a regulated trading platform is recommended.

Furthermore, if you’re looking to speculate on the price of the coin without owning the underlying asset, then CFD brokers may be the one for you.

You’ll also need to understand the common terminology and principles within online crypto trading. You should understand how price spreads work and how Ethereum’s price behaves in relation to other international markets.

Where Do You Trade Cryptocurrencies?

Here’s a brief look at some of the most common services you can use when trading:

Exchange:

  • A cryptocurrency exchange is a trading platform where you can swap different currencies. Either fiat into crypto, or crypto into another crypto. These exchanges can be a little challenging for newcomers to use, but they’re often the most popular choice for both skilled and unskilled traders. Notably, they are also a target for hackers, so you should think about keeping your funds in a separate wallet for additional security, especially if you do not intend to sell them any time soon. Always enable 2-factor authentication as well.

Broker Account:

  • A broker is a trading platform where you can open an account and make investments, either in holding shares, cryptocurrencies, or other assets. There are many brokerages available, all of which differ slightly. That being said, there are a few things you need to know. For one, a CFD broker lets you trade your assets without owning the underlying asset. You speculate on their value, but you cannot withdraw your Ethereum and spend it. Instead, you would withdraw the profits in your regular fiat currency account.

Wallet:

  • A crypto wallet is a device, service, or program which holds the keys used to send and receive cryptocurrencies, including Ethereum. If you have your own wallet, your Ethereum coins will be more secure than they would be if you left them in an exchange account.

Should I Trade Cryptocurrencies?

This is entirely up to you. Cryptocurrencies offer plenty of potential gains, especially if you understand the cryptocurrency market. However, there is also the potential to lose money if your trades do not go as expected.

Many platforms let you try a demo account where you can practice trading Ethereum without risking any real money. This is a great way to hone your trading techniques and get acclimatized to the financial markets.

What Is the Best Way to Trade Ethereum for a Beginner?

If you are new to the crypto space and want to make money with Ethereum, you should consider using a broker as you can forgo the process of actually purchasing and holding Ethereum coins.

CFD trading essentially means that you own a contract regarding the value of Ethereum but not the coins themselves. As such, you don’t need to think about finding a wallet or a place to keep them safe. If you decide you want to own Ethereum, you can move to trade on a crypto exchange at a later date, especially if you’re going to hold various cryptocurrencies or trade them for each other.

When you use a CFD platform, you’ll sometimes get the option to execute leveraged trades.

This is when you can borrow funds to make larger trades. The amount you can borrow varies on the platform and the chosen asset - some platforms offer 100x the size of your original stake.

Leveraged trading is an excellent way to maximize profits, but it can also lead to higher losses as well. That’s why it’s a tool that most experienced traders use profitably.

As such, we recommend beginner investors stay away from leveraged trading until they know what they are doing.

How to Trade Ethereum Using a Broker

There are so many brokers through which you can trade cryptocurrency. Here’s a step-by-step guide on how to do it:

Step 1: Open an account with your preferred broker
Step 2: Deposit funds into your account
Step 3: Figure out your trading strategy
Step 4: Place your first trade

How to Trade Ethereum Using an Exchange

When you use an exchange, you deal with the market directly and prices are set in real-time by traders all over the world.

If you are thinking about using an exchange for the first time, follow this step-by-step guide:

Step 1: Decide which exchange is right for you
Step 2: Set up your account
Step 3: Select which cryptos you want to purchase
Step 4: Place your trade
Step 5: Receive your coins

What Are the Alternative Ways to Get Ethereum?

There are many different ways to get Ethereum, and each one has its own set of perks. These include:

  • Brokers

  • Exchanges

  • P2P Marketplaces

  • Decentralized Exchanges

Final Thoughts on Trading Ethereum

As you can see, there are numerous things you need to consider when trading Ethereum. Whether you want to use a trading platform, exchange, or some other method, there’ll be a way to trade Ethereum that suits your investment needs. If you are looking for a reliable platform to do business, we recommend Coinbase for beginners and Binance for more advanced traders. However, there are many services available that may suit you better.

FAQs

Can I deposit money using PayPal to trade Ethereum?
Can I deposit money using a credit/debit card to trade Ethereum?
Can I deposit money using a bank wire transfer to trade Ethereum?
Will I lose money trading Ethereum?
Is Ethereum safe to trade?
What are the trading hours of the Ethereum market?
Can I trade Ethereum on my mobile phone?
Is it easy to withdraw my profits?
Danny Maiorca

Danny Maiorca

Danny is a freelance writer specialising in technology and finance. Prior to working for himself, he spent several years working within those sectors in London. Since then, Danny has relocated to Denmark.