How to Trade EOS 2021
2020 was nothing short of challenging for the traditional equity sector. However, cryptocurrencies such as EOS emerged as one of the best-performing assets globally.
With an ever-rising rising market cap, EOS can be a welcome addition for traders to diversify their investment portfolio.
This guide will help you with the foundation on how to trade EOS.
This includes the many EOS trading strategies that seasoned pros deploy to finding the right broker for your online crypto-trading needs.
What is EOS Trading?
EOS is a blockchain network with a native cryptocurrency token of the same name. As a digital currency, EOS allows users to facilitate transactions on the network and to build, host as well as promote the execution of dApps.
However, outside this network, EOS functions as any other cryptocurrency with a financial value. Like all crypto-assets, its value fluctuates with the ebbs and flows of the wider market.
The price of EOS is influenced by an array of factors, ranging from general financial trends to the expansion of blockchain technology.
In simple terms, EOS's value reacts to the supply and demand of market sentiment. If EOS receives support from investors, it will lead to an increased price. On the other hand, a lowering demand will translate to a decrease in price.
Put simply, for those who are wondering how to trade EOS, it comes down to predicting the marketing sentiment correctly. If you are able to foretell whether the price of EOS will rise or fall, you can place your trade accordingly and generate a profit.
Below is an example of how to trade EOS online in 2021:
- Let's say that the current market value of EOS is $2.60 per coin.
- You will find this denoted as EOS/USD.
- Believing the price of EOS will increase soon, you decide to place a buy order worth $1,000.
- In the next few months, the value of EOS rises to $3.00
- This translates to a gain of 15.38% - based on the price you originally paid.
- You decide to place a sell order, which closes the trade and locks in your profit.
In conclusion, you managed to secure a $153.80 profit (15.38% of $1,000) on your original stake.
As the example suggests, if your market prediction on the future value of EOS is accurate, your trade will be profitable. On the contrary, if the market turns against you, you will be left with a loss.
Thus, it is always recommended that you do your research, accounting for the latest market analysis, and trends before trading EOS.
How Does EOS Trading Work?
The process of trading remains more or less the same across almost all financial assets, with EOS being no different. For this reason, if you already know your way around trading the likes of stocks or forex, you will have no trouble in learning how to trade EOS.
To get you started, here is a list of the fundamental aspects of trading this hugely popular digital asset.
EOS Trading Price Movements
The cryptocurrency market is known for its high volatility. Since its launch in 2017, EOS has gone through several price surges as well as declines.
You will even notice that different cryptocurrency trading platforms might feature slightly different prices for EOS. While one site might have EOS valued at $2.66, you might find it priced at $2.65 on another.
However, bear in mind that such a minuscule difference is nothing to worry about and merely the natural variance that occurs between competing cryptocurrency exchanges.
Instead, you need to understand what causes a price shift on the value of EOS and ultimately - take advantage of this.
If a majority of traders are long on EOS and thus - decide to buy it, the value of the digital currency will rise. When an overwhelming number of traders decide to dispose of their EOS coins, consequently, its market value will drop.
EOS Trading Pairs
The financial value of EOS can be assessed in two ways.
- EOS-fiat: Trading EOS against a fiat currency such as the US dollar or Euro.
- EOS-crypto: Trading EOS against another cryptocurrency such as Bitcoin or Ethereum.
With US dollars being the benchmark currency for trading in the global market, you will find EOS/USD as the most common EOS pair.
That said, you can also find EOS traded against other popular fiat currencies such as the Euro (EOS/EUR), British pound (EOS/GBP), Japanese yen (EOS/JPY), Australian dollar (EOS/AUD) and more.
It is also relatively easier to speculate on crypto-to-fiat pairs, making it a more suitable option for novice traders. In addition, crypto-fiat pairs will also get you better spreads and high liquidity levels in the market.
When trading EOS against other cryptocurrencies, you are comparing the value of one digital asset to another.
This requires you to have a thorough understanding of both the cryptocurrencies involved in the pair. Not so surprisingly, this can be a complicated analysis process even for experienced traders.
In consequence, new traders tend to go for an EOS trading pair that is priced against the US dollar.
That said, it is up to you whether you choose to trade EOS against a fiat currency or another cryptocurrency. The decision will depend on your understanding of the wider digital asset marketplace and whether you are able to accurately predict its future price action.
Long or Short-Term Trading
Traders can access EOS with a long-term or a short-term strategy in mind. Long term approaches usually involve you buying EOS coins directly from an exchange or through an online broker.
Once you do, you will store the coins safely in a crypto-wallet until the time to sell arises. When it is time, you can sell the EOS coins and generate a profit.
In trading jargon, this method is often referred to as "HODLing" your cryptocurrency.
One significant advantage of such long-term investments is that you do not have to concern yourself with the market's short-term volatilities. Novice traders will find it more attractive, as there is no need to engage in technical analysis and chart evaluations.
Furthermore, this "buy and hold" EOS trading strategy might be more to the liking of those who do not have time to spare on everyday market analysis.
On the flip side, a short-time strategy thrives on the market volatility of EOS. You will aim to benefit from the smallest changes in EOS's price by placing several trades at a time. This is no different from traditional day trading.
If you choose this path, it is best suggested to trade a highly liquid pair such as EOS/USD or EOS/BTC.
Trade and Own EOS
When you plan a long-term strategy, you buy EOS outright hoping that its price will increase so you can sell it for more at a later date.
In order to do so, you need a trusted cryptocurrency exchange or an online broker to facilitate the transaction.
Considering the process involved, it is crucial that you find a platform to execute the trades for you in a cost-effective manner.
What you need is a licensed broker, who can not only give you access to liquid EOS pairs, but also a secure wallet for you to safe-keep your cryptocurrencies.
In that regard, we recommend regulated broker eToro. With nearly 100 cryptocurrency pairs to choose from, the platform allows you to trade EOS at zero commission. New traders will find eToro an easy way to connect with 13 million traders and learn from their trading strategies.
At the same time, eToro is also preferred by seasoned traders for both their long-term and short-term cryptocurrency investments.
For those who are not ready to commit to a long-term investment, but still want to benefit from market volatility, the best alternative is to trade EOS through CFDs (Contracts for Difference).
By trading CFDs, you will be speculating on the price movement of EOS, without taking ownership of the coin. Additionally, EOS CFDs give you the opportunity to profit from both the rising and falling price action of the market.
Here is the brief overview of what EOS CFDs are:
- CFDs are derivatives that track the real-world value of EOS.
- Trading in CFDs welcomes competitive spreads, as well as leverage.
- You can either deploy a long position - hoping for the price of EOS to increase.
- Or a short position - hoping that the price will fall.
While the advantages are many, it is worth noting that trading in CFDs is also considered extremely risky. Consequently, CFD trading in cryptocurrencies is banned in the US and the UK, among several other countries.
If you are in a country where EOS CFD trading is illegal, you will still be able to find unregulated brokers offering leverage.
As you can guess, this is strongly advised against, as you will be risking your money with an unlicensed and potentially shady platform.
Moreover, you will only be able to trade EOS against another cryptocurrency - as unregulated exchanges rarely touch fiat money. This means you will need to trade EOS against USDT (Tether), should you want to replicate the lucrative EOS/USD marketplace.
Would You Consider Trading EOS?
How to Trade EOS Online - Setting up a Trade
Every trader creates a plan that will cater best to the current market. This trading strategy is defined by choosing an appropriate set of orders.
You analyse the market and tell the online broker what your position on EOS is. That is to say - whether you want to buy or sell the asset. The broker will place these orders on your behalf. Then you sit back and hope for the market to move in your favour.
If you are new to the EOS trading sector, below is a list of the most common order types you need to be aware of.
Buy or Sell Order
Buy and Sell orders are the most fundamental of all trading orders.
- A Buy order is placed when you think the price of EOS will increase.
- A Sell order is placed when you think EOS will decrease in value.
Every EOS trade will require you to specify whether you want to buy or sell the asset first.
If you're going to enter the market via a long position, you will place a buy order and close it with a sell order. In inverse, if you want to enter the market via a short position, you place a sell order and close it with a buy order.
Since the cryptocurrency market is fast-moving, there might be a small price difference between the time you place the order and when your broker executes it.
In order to give you more control of these slight price differences, you can specify how you want your entry price to be determined.
There are two types of orders that allow you to do this:
- A Market Order will ensure that the order is carried out immediately or at the next best price.
For instance, if EOS is valued at $2.60, and you place a market order to buy, the broker will execute it instantly. This means you will buy EOS at $2.60 itself, or the closest price available.
- A Limit Order indicates to the broker that you want to enter the market at a specific price.
Let's say the current value of EOS is at $2.60, but you want to place your buy order only when it hits $2.69. This is where you can use a limit order. This means that your trade will not be carried out until EOS hits a price of $2.69, or you cancel the limit order.
Out of these two order types, limit orders come with a higher level of control over your position on the market.
Similar to entry prices, you can also specify how you want to exit the market. The most common way to deploy an exit strategy is via 'take-profit' and 'stop-loss' orders.
- A Take-Profit order will tell your broker when to close the EOS trade when it hits a specific profit level. To illustrate, you can set a take-profit order of 2% on your EOS trade. This means that your order will be automatically closed when your EOS trade makes gains of 2%.
- A Stop-Loss order is the opposite, in which case, you want to limit your losses if the market moves against you. If your stop-loss order is set at 2%, this means that you want to avoid losing more than 2% on your EOS trade.
Let us show you an example:
- You place a buy order on EOS at $2.60.
- You place a take-profit order at 2% above $2.60.
- All the same, you also want to limit your losses.
- Therefore, you place a stop-loss order at 1% below $2.60.
This trade can go in two ways.
- Your prediction is correct, and the price of EOS increases by 2%. In this case, your broker will carry out the take-profit order at $2.65, at a 2% profit.
- Your prediction is wrong, and the price of EOS decreased by 1%. Now, the broker will carry out the stop-loss order at $2.57, limiting your losses to just 1%.
Regardless of whichever direction the market goes, the broker will execute the take-profit or stop-loss orders based on your pre-determined price levels.
How to Make Money Trading EOS
Placing the right orders will eliminate the need to look over your outstanding EOS trades manually. That said, your orders are not the only factor determining the risks of your EOS positions.
Crucially, when you are learning how to trade EOS, there are a few more aspects you need to consider.
Your stake is simply the amount of money you risk on your EOS trade. As is standard, a higher stake translates to higher profits, but also higher losses.
Imagine that you make 2% gains on an EOS trade. On a $50 stake, your profit will be $1. At the same time, if you had risked $1,000, your profit will amount to $20.
However, it is not as simple as staking the highest amount you have into EOS trades. You also have to calculate the risk and handle your funds accordingly.
Most traders have a bankroll management strategy in place to help manage their capital. In effect, you will be limiting your trades to a certain percentage of the funds available in your trading account.
Many traders tend to limit their stakes to 2% per trade. This means that if you have $2,000 in your account, you will only be staking $40 on one EOS trade.
Popular crypto broker eToro allows you to trade EOS with as little as $25. This is a great way to keep tabs on your trading funds, especially when you are undertaking short-term strategies.
EOS Trading Leverage
Earlier, we discussed the advantages of EOS CFDs. One that poses the most appeal to traders is the option to apply leverage.
This allows you to gain more exposure to the market by paying just a fraction of your desired stake and borrowing the rest from the broker.
For instance, if you are applying leverage of 1:10 on a $100 stake, your position is worth $1,000.
Leverage can significantly magnify your gains. But, if the trade goes wrong, it will also amplify your losses.
Let us show you how leverage on an EOS trade works in practice:
- You place a sell order worth $2,000 on EOS/USD
- You apply leverage of 1:5
- The profit on this trade is 5%.
- Ordinarily, your profit on this trade would be $100.
- With leverage of 1:5, your profits are amplified to $500.
Although CFD trading might be prohibited in your country, it will still be possible to find unregulated platforms offering leverage. In such cases, you can even find leverage limits of up to 1:100 offered on cryptocurrency assets.
But as evident, trading with this much leverage is highly risky - especially when using an unlicensed exchange. Instead, it’s best to stick with a fully regulated brokerage site like eToro.
Fees to Trade EOS Online
As we have mentioned throughout this guide, it is paramount that you choose the right broker for your EOS trading needs. The right broker for you is not only determined by their reputation but also based on how much they charge in fees. After all, brokerage platforms are indeed a business.
The fee structure of online EOS brokers will vary depending on their individual policies.
Below is a list of the most common fee types you will come across.
EOS Trading Commission
Commissions are charged by almost every broker and are calculated as a variable fee against the value of your order.
As a model on the current rates - the cryptocurrency broker Coinbase charges you 1.49% commission on every trade order. This means that you will need to pay 1.49% when you enter the market, as well as when you exit.
By comparison, eToro will allow you to trade on a zero commission basis - not only on EOS but 15 other cryptocurrencies too.
Spreads are an inevitable fee category.
The 'Spread' is calculated as the difference between the asset's buy price and the sell price. When trading EOS, you want the spread to be as tight as possible, so it will not impact your ability to make a profit.
To give you a better idea:
- If the spread at your chosen broker is 1.50% on EOS, then it means that you need to make a profit of over 1.50%.
- Anything below this and you are still in the red.
- In other words, if the value of your EOS trade has increased by 1%, you are still 0.5% down.
Other EOS Trading Fees
Online brokers also charge you a range of administrative fees that can soon add up.
- Deposit/Withdrawals Fees: You have to deposit funds into your trading account before you can start trading EOS. Some brokers charge you a fee each time you add or withdraw money, so be sure to check this out.
- Inactivity: This fee is charged if your account is dormant for a specific period of time. Again, it is not a standard fee and varies from one broker to another.
- Overnight Funding: Overnight funding fees, also called swap fees, applies mainly to those who trade CFDs. These are charged when you keep your trading positions open overnight. Some CFD brokers also charge you a slightly higher fee over the weekend.
To stress on the point, fees can invariably determine how much profit you ultimately make from your trades. Thus, you need to give careful consideration to the terms and conditions before you choose an EOS trading site.
Ready To Start Trading EOS?
How to Trade EOS 2021 - Step-by-Step Walkthrough
Yes, we are now down to this guide's most actionable step, how to trade EOS with your broker.
We have created four simple steps for you to follow.
Step 1: Choose an EOS Trading Site
The first step is to find yourself a reputable online trading platform. A quick search on the internet will reveal hundreds of options, but it can be tricky to find a legitimate site that meets your needs.
Below is a checklist of what you need to look for in an online EOS broker.
- Regulation: Does the online broker hold any regulatory licenses - such as those from the FCA, ASIC, or CySEC?
- Fee Structure: Is the broker transparent about fees? If so, what fees are you liable for?
- Payment Methods: Which payment methods are available to deposit and withdraw funds into and out of your trading account?
- Account Minimum: What is the minimum deposit amount required, and the minimum stake possible when trading EOS?
- EOS Pairs: What trading pairs are available for EOS?
- Trading Platform Navigation: How is the user-experience on the trading platform?
- Mobile App: Is there a mobile application for the trading platform?
In addition, it is also recommended that you check user reviews of the online broker that you are considering joining. This customer feedback will give you insight into the actual performance and the credibility of the EOS trading site.
From our research, we found that eToro ticks almost all the boxes from our list.
Here are some of the features that make eToro one of the best EOS brokers to trade with.
- eToro is a social trading platform that allows you to connect and learn from other traders.
- The "Copy Trader" feature enables you to copy the trading strategies of experienced traders.
- All EOS trading markets are commission-free and come with competitive spreads.
- There is an assortment of payment options, including bank transfers, debit/credit cards, and digital wallets such as PayPal
- You can trade EOS against both fiat currencies and digital currencies.
Step 2: Open an EOS Trading Account
With your online broker chosen, you can now open an account. You will have to provide your personal information such as name, address, date of birth, and contact details.
If your online broker works in accordance with KYC regulations (which it should), the platform will also request a copy of your passport or driver’s license.
This step is necessary to comply with anti-money laundering laws.
Step 3: Deposit Funds
When the platform has verified your ID, you can deposit funds to your trading account.
Choose your most preferred payment method, and transfer the desired amount.
At eToro, you can choose between credit/debit cards, a bank transfer, or an e-wallet such as PayPal, Skrill or Neteller.
Step 4: Choose EOS Trading Market
Choose whether you want to trade EOS against a fiat currency or another digital asset. You can simply search for EOS at eToro to find out what pairs are available for trading.
Step 5: Place EOS Trade
It is now time to open your EOS trade. All you need is to specify your entry and exit orders. Your broker will then execute the trade for you.
If you need a quick refresher on order types, feel free to scroll up to our section on "Setting up an EOS Trade".
How to Trade EOS Guide - The Verdict
Trading cryptocurrencies requires a lot of research and preparation. EOS is no different. As such, before you venture into the EOS trading space, make sure that you prepare yourself by reading guides such as ours.
You can start by considering whether you want to hold on to the asset long-term, or trade it for short-term gains. More importantly, ensure that you have a trading plan and the right online broker to execute this for you.
As we mentioned, eToro is an excellent choice for newbie cryptocurrency traders. You can trade EOS against fiat as well as other cryptocurrencies - all on a commission-free basis.
Above all, you can be assured that you are using a heavily regulated broker when choosing eToro to trade EOS online.
eToro – Best Broker to Buy EOS
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.
- Where can I trade EOS safely?
You can trade EOS at hundreds of online exchanges and brokers. eToro is one of the best online brokers in the space - with regulatory licenses from the UK, Cyprus, and Australia.
- How can I trade EOS?
You can trade EOS against a fiat currency or a cryptocurrency. Online brokers such as eToro facilitate cryptocurrency trading with a stake from as little as $25.
- How much money can you make with EOS trading?
Your profits when trading EOS will depend on how well you predict market movements as well as your stake amount. If your speculation is correct, you will make a profit. If not, you will make a loss. Regardless, you need a bankroll management strategy to properly manage your EOS trading funds.
- Is EOS trading legal in the US?
EOS trading is legal in the US. However, you cannot engage in EOS CFD trading as an American.
- How can you apply leverage on EOS CFDs?
You can apply leverage when trading EOS by using a CFD broker. Residents of the US and UK cannot access cryptocurrency CFDs.