How to Trade Decentraland: A Step-by-Step Guide

Comprehensive Guide to Trading Decentraland in 2021

Last Updated July 23rd 2021
28 Min Read

Are you interested in learning how to trade Decentraland but unsure what to do or even where to start? Well, this guide might be precisely what you need!

MANA trading is pretty straightforward once you get the hang of it. 

First, let us give you a little background on Decentraland and how it works. Decentraland started in 2015 as a pixelated grid that used a proof of work algorithm to share pixels with its members. Since then, it has grown into a 3D virtual housing market that gives power to consumers.

The promise behind the digital project is to provide its users with the ability to design, build and monetize their own virtual world. In order to create this new online world, you will need to buy land using Decentraland’s native currency - MANA

If you would like to find out more on how to trade Decentraland and use it in your future investments, this guide aims to help you on your journey. 

We will cover all fundamentals involved in trading Decentraland, such as choosing from a long or short-term strategy, how to set up a trade, and how you can make potential profits. 

If you want to trade Decentraland quickly and easily, with 0% Commission, check out eToro Exchange!

Contents:

How to Trade Decentraland in 5 Steps

To trade Decentraland, the first step is to open an accout with a regulated exchange, depost funds, select MANA from the platform list, and lastly Buy MANA (go Long) or sell MANA (go short).

Step 1: Open an account with an exchange 

Step 2: Funds your crypto account

Step 3: Choose how much MANA you want to trade 

Step 4Buy MANA (go long) or sell MANA (go short)

Step 5: Confirm the trade

What is Decentraland Trading?

If you are new to trading, you might not yet be aware of just how much cryptocurrency prices can fluctuate throughout a day, week, or even a few months. For example, at the beginning of 2021, MANA was valued at $0.07825. The price then boomed to an all-time high of $1.60 in May. 

This jump shows just how quickly a digital coin can turn into a valuable financial gain. It goes without saying that whoever purchased MANA at the beginning of 2021 is extremely glad they did now!

As you can see, the main objective of trading Decentraland is learning how to speculate on these price fluctuations as accurately as possible. In fact, it is the same for most trading sectors, whether it be stocks, gold, or crypto. If you do your research and see a great demand for an asset, there is a high chance that the price will increase.

It is much the same for MANA; if more and more traders invest in the coin, then the price will start to inflate. As you can imagine, the value can begin to fall just as fast as it went up. This drop may happen if too many traders were to sell their MANA coins in a short period. 

For this reason, it is essential to educate yourself on the crypto market and its price fluctuations. To give you a better idea of what a Decentraland trade may look like, we have included an example below: 

  • The value of Decentraland is $0.71.
  • The crypto pair involved would be shown as MANA/USD
  • You feel Decentraland is undervalued at this price ($0.71).
  • You place a $500 buy order on MANA with the hope of making a profit on the pair increasing in value. 
  • After a certain amount of time, you see that the pair MANA/USD is now valued at $1.00. 
  • This would mean that there has been an increase of 40.84%.
  • Delighted with your profits, you create a sell order to close your trade. 

To break it down a little further, based on this example, your initial trade of $500 would have grown to $704.20 - giving yourself a nice profit of $204.20. However, this profit is before any fees or commissions, which we will delve into later on in our guide. 

What should now be apparent is that anyone can learn how to trade Decentraland and make some significant profits. Although, it is good to keep in mind that it does not happen overnight, and you will need to put time and research on how to predict the price movements of MANA. 

It may seem simple to begin with, but if you speculate on the wrong trade - you could end up with a considerable loss. And of course, no one wants that!

How Does Decentraland Trading Work?

If you are an experienced trader, you will already know that the crypto industry follows a few of the same fundamentals as many other investment arenas. For instance, they all follow the same supply and demand nature of trading. 

Crucially, you have to have a firm grasp on the markets to make any form of profit, albeit, as long as you have a device with the internet - you can get started. 

However, there are significant differences between trading sectors. For example, trading stocks and more traditional assets are well known around the globe. This is because the sector has been around for a longer time - whereas Decentraland is a newer addition to the game. 

On the other hand, with crypto being more up-to-date and current, it gives you the benefit of fewer mediators, meaning you control your trades and any fees or brokers involved. In summary, no matter what trading sector you choose - you must have a clear idea of what it will require if you want to succeed - especially in the case of digital tokens like Decentraland. 

Decentraland Trading Price Movements

There are many factors that can influence the value of Decentraland. First, let's focus on Decentraland trading price movements. Understanding these fluctuations is vital as it can teach you what truly navigates the price of cryptocurrency assets.

As we touched on earlier, if there is more attention surrounding a digital coin - whether it is through word of mouth, mainstream news, or social media -then there is a high chance the price will begin to shift.

It could be a price increase, suggesting that more traders are opting for long (buy) orders. On the other hand, a price decrease will mean more people are going short (sell) on their Decentraland trades.

A prime example of this is a surge or fall in the value of Dogecoin soon after Elon Musk mentions it in an interview or on Twitter. So, as you can see, keeping an eye on how the price movements on Decentraland are being discussed or traded is always a good idea. 

You can see the value of MANA on many exchanges worldwide. With that said, when you are looking into how to trade Decentraland on different crypto brokers- you may notice the price varies on each one.

For example, one may quote MANA/USD at $0.7050, whereas on the next, it could be $0.7055. These variations should only ever be minor and shouldn't hinder your trading progress. 

Don't Miss: Decentraland (MANA) Price Predictions

Decentraland Trading Pairs

If you are a newbie in the context of trading Decentraland, you may not be aware that you can identify a trade by the crypto pair it presents. There are two types of pairs; these are 'crypto-to-fiat’ and 'crypto-cross.'  

If you are an experienced trader or have some investing background, this will come more naturally to you. If not, let us break down what both of these terms will mean for your future Decentraland trades. 

  • In a nutshell, crypto-to-fiat is relevantly straightforward in the sense that one side of the pair is a cryptocurrency, and one is fiat. 
  • For example, we gave an example of MANA/USD earlier on in our how to trade Decentraland guide. 
  • As you may have guessed, MANA is the digital token in the pair, and the US dollar is the respective fiat currency. 

You will find many brokers that provide you access to a full array of diverse fiat currencies. These currencies may include MANA/EUR (euro), MANA/GPB (British pound), or even MANA/KRW (South Korean Won). 

With all that being said, the US dollar is the most commonly traded fiat currency in the Decentraland investment scene. This top currency attracts advantages such as higher liquidity and tighter spreads - which is perfect for beginners!

Now onto the crypto-cross, which essentially means that the pair contains two digital and competing crypto coins. Some of these pairs may include MANA/BTC (Bitcoin) or MANA/ETH (Ethereum).

As you can imagine, there are thousands of crypto-cross options to choose from - which is why many experienced traders would suggest starting with the fiat option. By opting to stick with crypto-to-fiat pairs, you do not need to guess which coins operate well together. 

Therefore, you can measure MANA’s price movements more accurately, giving you a higher chance of profits. 

Long or Short-Term Trading

When you start constructing your investment plan surrounding how to trade Decentraland - one of the main factors is whether you are in it for the short or long term. If you are interested in purchasing Decentraland and holding on for the ride, long-term investing may be more your style. 

  • You will adopt the buy and hold method, otherwise known as 'HODLing'.
  • You will buy the asset with the plan that the price will increase over months or years. 
  • If this were the case, you would buy the digital coin and store it in a crypto-wallet until you are ready to sell. 
  • There are several types of crypto-wallets available which we cover later in the guide. 

The alternative is short-term trading, which means placing smaller but more consistent orders - which could be multiple trades in a day or week. However, to have a chance of making steady gains using this strategy, you must have a comprehensive understanding of technical analysis. 

This can include chart reading, deploying technical indicators, and looking for historical price swings. With how volatile the crypto market is - these skills can take even the most seasoned traders years to perfect. For this reason, we often see people change their investment path and go for the HODLing method! 

If your needs are more attracted to the short-term strategy, you could look at Decentraland CFDs or opt for crypto pairs with high liquidity, such as MANA/USD.

Read Also: Pros and Cons of Investing in Decentraland

Trade and Own Decentraland 

So now we know that if you are looking to buy and hold Decentraland, then purchasing the asset outright and storing it in a crypto-wallet is the best plan of action. However, what we do ask you to consider is what broker you will choose to carry out this plan. 

A broker that is constantly going above and beyond for customers is eToro. 

At eToro, you will be able to buy Decentraland on a 0% commission basis. Furthermore, the platform offers a built-in wallet account or the opportunity to download its mobile app to store your coins safely. It is easy to see why millions of users trade with eToro, year in and year out!

Another bonus of long-term owning and storing your Decentraland tokens with eToro is you won’t need to be constantly on top of the price fluctuations within the crypto market. Meaning - you can have peace of mind that a regulated broker has your capital safe!

Decentraland Trading

Suppose you are looking to trade Decentraland on a short-term basis via approaches such as "day trading" or "swing trading". In that case, we would suggest selecting a crypto broker that offers contracts for differences (CFDs). 

So let's look at what a CFD really does:

  • Traders can use a CFD to speculate on any future price movements of Decentraland by entering an agreement with a broker.
  • A CFD account can offer some key benefits, such as leverage and lower trading fees. 
  • You also have more flexibility with a CFD as you can opt to go long or short - giving yourself a chance to profit from the rise and fall of the markets.
  • Keep in mind, though; you do not own the asset outright. At the end of the contract term, the broker will exchange only the difference between the opening and closing prices. 

So to summarize, CFDs enable you to trade and invest in Decentraland through a time-sensitive contract with a broker. Therefore, you do not need to open a position directly into the market. 

One thing you may want to keep in mind is that the US restricts the use of CFDs due to current SEC regulations. In the UK, you will be able to locate CFDs on more common assets such as commodities and stocks - just not on cryptocurrencies. 

  • If you happen to be in an area of the world where you can gain access to crypto CFDs, then eToro is the perfect platform to join. 
  • You can choose from crypto-to-fiat or crypto-cross pairs on a broad collection of CFDs! 
  • You’ll also be able to apply leverage on Decentraland and even short-sell if you think the tokens are overvalued.  

If you are in a country that does not allow you to trade with CFDs, the only other option is an online crypto exchange. We must mention that there is a significant chance that your chosen exchange is unregulated - limiting the possibility of using fiat currencies to fund your trading account. 

If you decide to go ahead on these unlicensed Decentraland exchanges, you may also end up trading MANA/UDST. This pair consists of MANA, of course, but another digital asset called Tether. This particular currency holds the same value as the US dollar. 

How to Trade Decentraland Online - Setting up a Trade

So at this point, we have discussed short or long investment plans, and what sort of trades and crypto pairs there are. But now we can talk through perhaps the most crucial detail in trading Decentraland - how do you actually set up an order? 

First, you need to decide which direction you think Decentraland will take in the market. If you are new to trading crypto, you may not know that each distinct order will instruct your broker to execute a position in different ways. 

To make sure you have a clear understanding, we have included a breakdown of the most common orders used when trading Decentraland. 

Buy and Sell Order 

The first set of order to consider is a buy or sell. We covered this a little further back in this how to trade Decentraland guide. To recap, with every trade you take, you must choose between one of these order types, as essentially, this is how you are entering the market.

To give you an example:

  • If you think the price of Decentraland will increase, you will place a buy order. 
  • Similarly, if you believe the price of Decentraland will decrease, you will place a sell order. 

When you have decided on which way you plan to open your position - the next step is to establish how you plan to close your trade. For example, if you entered the market with a buy order, you will need to set up a sell order to complete the position. 

Of course, this will flip if you open a trade using a sell order, as you will close it by opting for a buy order. This may seem simple, but it is always worth noting it within your investment plan to ensure you never get caught out!

Entry Price

We have now covered that you will need a buy or sell order regardless of which coin you choose to trade. Now, you will need to consider at what price you want to enter the Decentraland marketplace. 

Ordinarily, you have two options: a limit or a market order. This decision breaks down to which style suits your objectives more. 

For example: 

  • If you are looking to get straight in and trade Decentraland at the current price - you can select a market order. Your broker will then take your order and execute it at or as near that price as possible. As the price of Decentraland shifts every second, there could be a slight distinction between the price you chose and the completed order price. 
  • Alternatively, you could opt for a limit order. This particular order allows you to instruct your broker of a price you have specifically chosen. For example, the current value of Decentraland is $0.72, but you feel that entering the market at $0.74 is the best option for you. You will then proceed to your broker and create a limit order. 

As you can see, the limit order gives you more control and a level of versatility to your trading positions. On the other hand, the market order is more commonly used if you want to immediately act on a Decentraland trading opportunity. 

Exit Strategy

Lastly, we come to a few different strategies you can use to exit your Decentraland trade. Similar to your entry options, you have two orders to consider: a stop-loss and a take-profit. 

  • Let's begin with the take-profit order. This approach allows you to install a specific price that will automatically close your position when reached. Ergo, securing any profits instantly. For example, you place a buy order at $0.74 and want to make a profit of 6%. You will direct your broker to close the trade when the 6% profit has been reached; which would be roughly $0.78 on a long position. 
  • Now for the stop-loss order. You could say this order is very accurately named, as its sole purpose is to stop your losses. In a similar way to the take-profit, you decide on a specific price that closes your Decentraland position. In this case, your percentage target could be around a price drop of 1% or more. 

If you are looking to see a more visual representation of these orders - we have you covered. 

  • Suppose you are trading MANA/USD. The value of this pair is $0.69. 
  • You feel the price is due to increase, so you establish a buy order with your broker. 
  • You select a limit order and decide to set your entry price at $0.71. 
  • Your target for earnings on this trade is 4%, so you set a $0.73 take-profit order. 
  • Now you have your profits secured; you want to make sure you cap any losses at 1%. You place a stop-loss order at the price of $0.70. 

Essentially what you have now is a steady trade set out. You have mitigated any significant potential losses while ensuring that any profits are protected. 

To summarize and wrap up, here is another example: 

  • MANA/USD reaches $0.73 - this triggers your take-profit order, and your trade is closed. You have successfully made your 4% profit target. 
  • MANA/USD falls to $0.70 - the stop-loss order activates and automatically closes your trade. You have a total loss of 1%. 

The main benefit of these orders being programmed into your brokerage site is that you do not need to check the market constantly. Everything is already set up and ready to go!

Check Out: Should You Buy Decentraland (MANA)?

How to Make Money Trading Decentraland

The orders we have covered will help set up and produce steady trades. However, there are many factors to take into consideration when trying to make money trading Decentraland. 

We have compiled a detailed list of these factors for your convenience.

Stake

In layman's terms, the stake is the amount you are willing to risk per trade. You will need to consider this when researching how to trade Decentraland. Just like in any investment scenario, the bigger you bet, the more you can earn. Or the more considerable the loss.

The process is very much the same in cryptocurrency trading. 

Here is a prime example of how your stake can affect your position:

  • You stake $400 on Decentraland and make a profit of 3% - you walk away with a gain of $12. 
  • If you had staked $2,000 on that particular trade - you would have instead walked away with a $60 profit. 

This may seem like it is just a guessing game which, for some people, it can be. But, more traders seem to have better successes from using strategies such as the bankroll management method. 

Let us explain. The bankroll management strategy allows traders of all levels to set up a maximum amount they are prepared to stake per order. The fundamental part of this method is that it is all connected to your trading account balance. Most traders will stick to a maximum stake of 2% of their trading capital per position. 

For example, if your trading account balance is $800, you won't stake any more than $16 on a particular trade. However, if your balance happened to be higher, let's say $14,000 - then you have a maximum stake of $280. 

If this seems a little out of your price range - then we might suggest starting with a broker like eToro. You can trade Decentraland on eToro for as little as $25 - meaning you can start smaller and organically build your crypto portfolio. 

Decentraland Trading Leverage

As we mentioned earlier in our how to trade Decentraland guide, the US and UK do not permit the use of crypto CFDs. If, by chance, you do live in an area where Decentraland CFDs are allowed - then you may be interested in leverage. 

You can use leverage on your MANA trades to help expand your profits. This can also go the opposite way, and the leverage will give you a much higher loss. 

We have included an example of how leverage would work on your Decentraland trade. 

  • You place a $150 buy order on MANA/USD.
  • You then apply leverage of 1:5.
  • You make a profit of 5%. 
  • The profit without leverage is $7.50 
  • The profit with leverage is $37.50

So, in reality, if you are in an area of the world that allows leverage, you can boost your gains on a day-to-day basis. You may even come across an exchange that offers leverage of 1:100 and higher.

Although, more than likely, these are unregulated, and we do not recommend going down that route. Depending on where you live, you can find crypto brokers that offer up to 1:10 - from there, you can decide if it is something you wish to pursue. 

Just keep in mind, it may not always go as smoothly as our example.

Fees to Trade Decentraland Online

Regardless of how you choose to trade Decentraland, whether it is long or short term or you use fiat or digital currencies - you will come across your share of fees. Crypto brokers use these fees to keep themselves in business. 

As a result, you have access to the world of Decentraland trading. We suggest making yourself aware of any fees or commissions you may need to pay before signing up to a broker. 

Decentraland Trading Commission

When you start to review the fees involved when trading Decentraland, you will find that virtually all crypto brokers will charge a commission. Some platforms will have a very brief price list. But more than often, brokers will charge a percentage of your order value. 

A standard rate we see is 1.49% per Decentraland trade placed. For example, if your trade is $500 - you pay a fee of $7.45. Some newbies do not consider that you will also need to pay the 1.49% again when you decide to exit your trade. 

This is why millions of traders choose eToro. You can trade MANA at 0% commission - meaning you get to pocket more of your profits! 

Decentraland Spread 

The spread is the difference between the purchase and sell value of Decentraland tokens. So, in essence, the larger the distance between prices - the more you will incidentally need to pay to your broker. 

To give you an example, let's assume the spread is 1.2% on all MANA trades. This means you need your trade value to increase by 1.2% before you can begin to make any gains. If you were to go beyond that point, that would be calculated as a net profit.  

Other Decentraland Trading Fees

We have reviewed two of the main fees you may face. However, we have added a few more to ensure you are fully equipped with all the information needed when learning how to trade Decentraland. 

  • Deposit/withdrawals: Some brokers may require a payment to withdraw or deposit on their platform. For example, Binance charges a 2% fee when using a debit/credit card. Whereas, at eToro, you can use various payment types and only face a 0.5% fee if it is not USD-based. 
  • Inactivity: Nine times out of ten, a brokerage site will include an inactivity fee. After some background checks on this fee, we found most platforms will start to charge this after one year of no trading activity. It is usually deducted monthly at a rate of $5 and upwards. This is where you need to be strategic, as the fee will not stop until funds on your account run out.  
  • Overnight funding: If you are looking to trade leveraged Decentraland CFDs - you will need to pay an overnight fee. Essentially, this is a fee for each day you leave your trade open. Traders may also refer to this as a swap fee or an overnight financing charge.  

Taking everything into consideration, if you want to trade Decentraland effortlessly, eToro is your best bet. You will have the benefits of smaller spreads and zero commission fees! 

Don't Miss: Could Decentraland Be A Millionaire-Maker Coin?

How to Trade Decentraland 2021 - Step-by-Step Walkthrough

So, here we are, the final part of our How to Trade Decentraland Guide 2021! By now, you should have an extensive understanding of what trading MANA involves. If you want to take the next step in your Decentraland journey - follow our steps below to start today! 

Step 1: Choose a Decentraland Trading Site

First, you will need to choose a broker that fits your trading requirements. There are many platforms currently offering Decentraland, so take your time and do your research. 

We have included a list of the most valuable factors we think all traders should consider when deciding on a crypto broker. 

  • Regulation: Does the broker hold a license with any regulated bodies such as ASIC or the FCA?
  • Fees: What fees will you face with this crypto broker? 
  • Payment: Does the crypto broker support your preferred payment method? 
  • Account minimum: How much is the minimum deposit and stake amount on each trade?
  • Decentraland pairs: Does the platform support trading Decentraland against a wide range of crypto and fiat currencies?
  • Trading Platform: Do you find the site straightforward to operate?
  • Mobile: Does the broker offer a mobile app so that you can buy and sell MANA tokens while on the move? 

All in all, there are many things you need to consider when choosing your trading site. Keeping this in mind, we think that millions of users choose eToro because the platform meets and exceeds all of the core metrics listed above.  

We have included some examples of this below:

  • eToro is regulated by three financial bodies (FCA, CySEC, and ASIC) and registered with FINRA/SEC in the US. 
  • The broker provides you with tighter spreads and 0% commission fees on each Decentraland trade. 
  • There are several payment methods available -including debit/credit cards and e-wallets. On top of this, deposits using these methods are immediate. 
  • eToro supports a wide range of crypto and fiat currencies, meaning you have the option of multiple MANA pairs. 
  • You can trade Decentraland today from just $25.

Step 2: Open a Decentraland Trading Account

When you have the eToro website open and ready, it is time to create your trading account. You will need to input the usual personal details involved with opening an account. This will include your name, address, date of birth, and contact methods. 

As the platform is regulated, you will be required to submit a photo ID. A passport or driver's license is acceptable.

Step 3: Deposit Funds

One of the benefits of eToro being regulated is you can use fiat currency to fund your account. You can choose from payment methods such as Maestro, Mastercard, and Visa, or opt for an e-wallet like Paypal or Skrill. 

Step 4: Choose Decentraland Trading Market

After you have made the minimum deposit required for Decentraland - you can start to trade. You can either go ahead and search for your chosen pair and get started that way. Or have a look through the 'Trade Markets' page and see what catches your eye. 

Step 5: Place Decentraland Trade

Now the final and most exciting part -  placing your Decentraland trade! Start by either a buy or sell order, depending on which way you decide to go. Then select 'Open trade' to execute. Remember, you can circle back to our How to Trade Decentraland Guide at any point to recap what each order involves. 

How to Trade Decentraland Guide - The Verdict

When it comes to how to trade Decentraland, we know that using guides like ours to get started is far better than jumping straight in. Also, choosing a reputable broker like eToro is a must - you want a safe and easy environment to make your trade.

The bottom line here is that trading Decentraland takes time and research but can provide tremendous financial benefits if done correctly. Ultimately, we are sure many traders are eager to see where MANA will go!

eToro – The Best Platform to Trade Decentraland

eToro have proven themselves trustworthy within the Crypto industry over many years – we recommend you try them out.

Virtual currencies are highly volatile. Your capital is at risk.

FAQs

Is trading in Decentraland safe?

Trading Decentraland is safe if you use a regulated and trusted trading site. eToro, for instance, is regulated by several tier-one licensing bodies.  

How do I trade in Decentraland?

The easiest way to trade Decentraland is by creating an account with a regulated broker like eToro. Use a debit/credit card or e-wallet to make the minimum deposit requirement. From there, you can start placing MANA orders. 

Can you get rich by trading Decentraland?

In today's digital era, some people make an income from trading Decentraland. However, there are also traders who make losses. It comes down to speculating on a highly volatile cryptocurrency market. Our suggestion would be to adopt the bankroll management strategy and really do your homework prior to trading!

Is Decentraland trading legal in the US?

Yes, Decentraland trading is legal in the US. Keep in mind though if you are a US citizen, you will not be able to access cryptocurrency CFDs. 

Can you trade Decentraland with Leverage?

Trading Decentraland using leverage is entirely country-dependent. For instance, in the US or UK, trading leveraged CFDs is not permitted. Therefore you will not find a regulated broker offering this service. If you are in a country that provides leverage, then make sure to read all terms and conditions involved - and always consider the added risk. 

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