Dogecoin (DOGE) functions as a digital currency enabling seamless transmission and reception of payments. Similar to other cryptocurrencies, the value of Dogecoin experiences rapid fluctuations, at times even within seconds. When engaging in Dogecoin trading, the aim is to predict the future worth of DOGE coins. Should there be substantial interest in Dogecoin, its value will surge. Conversely, as more traders seek to liquidate their Dogecoin assets, the coin’s value will drop. Predicting price variations is how you earn money while trading Dogecoin online.
Trading pairings for Dogecoin
Dogecoin trading is made possible via crypto pairings. The digital asset may be traded against both fiat money and other cryptocurrencies. The US dollar, being the standard fiat money, is the most often utilized while trading cryptocurrencies. Other crypto-fiat trading pairings available via certain online brokers include DOGE/GBP (British pound), DOGE/EUR (euro), DOGE/CAD (Canadian dollar), and even DOGE/JPY (Japanese yen). Trading DOGE versus fiat currencies also offers the benefits of high liquidity and narrow spreads. Furthermore, traders may more easily measure gains and losses and bet on currency rates. Therefore, for novice traders, crypto-fiat currencies are regarded as a more feasible option. Another possibility involves swapping Dogecoin for alternative cryptocurrencies such as Ethereum or Bitcoin. Nevertheless, this demands a comprehensive grasp of both the rival currencies and their corresponding markets.
Long or short-term trading
Before starting to speculate on Dogecoin, decide which financial instrument would best serve your trading goals. You are presented with two options: either make a long-term investment in cryptocurrencies or engage in short-term trading of the asset. For a long-term, you would acquire the coin traditionally and store it within a cryptocurrency wallet. In this manner, you may keep DOGE for months or years until you decide it’s time to cash out and receive your gains. This method is known as ‘HODLing’ in the crypto realm. Short-term tactics, on the other hand, need a solid comprehension of technical analysis to help your decision-making process. This will be a difficult task for inexperienced traders in particular. Acquiring the skills to decipher charts and comprehend various technical indicators will require a certain amount of time. Hence, if you are a novice, adopting a ‘buy and hold strategy’ would be a more straightforward approach. This approach alleviates concerns about the short-term instability in the Dogecoin market. If you enjoy the thought of producing little gains regularly, a short-term plan will suit you better.
Dogecoin exchange
If you like to trade DOGE in the short term using swing or day trading tactics, look for an online broker that provides Dogecoin CFDs (Contracts for Differences). Here’s a rundown of what CFDs are all about. They:
- are financial products that follow the underlying asset’s value – in this example, Dogecoin;
- offer the benefits of cheap costs and leverage;
- allow you to bet on Dogecoin’s ups and downs via long or short positions;
How to trade DOGE online
You must be acquainted with the various forms of trading orders while learning how to trade Dogecoin. In layman’s words, these orders are used to inform your broker of your position on the asset. The following is a list of the most frequently used orders while trading Dogecoin:
Buy or sell order
You must use a buy or sell order regardless of the asset you are trading. If you anticipate that the price of Dogecoin will climb, you will place a purchase order. If you foresee a decrease in the value of Dogecoin, you would execute a sell order. Each transaction involving Dogecoin necessitates both buy and sell orders. For instance, initiating a DOGE transaction through a buy order would entail completing the process with a corresponding sell order. On the contrary, if you enter your position with a sell order, you must leave with a purchase order.
Market order
A market order instructs your broker to execute at the best price available. For example, suppose Dogecoin is presently valued at $0.050. You want to lock in this price right now, so you place a market order. Your broker executes the transaction immediately. However, owing to price fluctuations, you may notice a small variation in the price of the order performed.
Limit order
When you wish to join the market at a certain price, you utilize these orders. Assume that DOGE is worth $0.1. You should wait till it reaches $0.15. So, you place a limit order with your broker for $0.15. The order stays outstanding until the price is met or you cancel it. Limit orders, as you can see, provide you with greater control over your positions and are favored by traders of all levels.
Exit strategy
Along with entry methods, you need to think about how you want to exit the trade. This is when ‘take-profit’ and ‘stop-loss’ instructions come into play. A take-profit order enables you to exit deals at a predetermined profit level. Your broker will automatically terminate the deal when the price of Dogecoin reaches your set price threshold. Stop-loss orders are used to limit your trading losses. When the price of Dogecoin reaches your specified stop-loss level, your transaction will be immediately closed.
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