How To Trade Internet Computer (ICP) In 2023: A Step-by-Step Guide

Looking for an entry point into the exciting world of Internet Computer trading? We'll help you through it.

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

Internet Computer, a digital token that debuted on May 10, 2021 - has taken the crypto world by storm. In a matter of days, the coin became a top ten cryptocurrency in terms of market capitalization. While it's since dropped, it doesn't mean you shouldn't consider it.

If you want to capitalize on this innovative digital token, you can trade Internet Computer (ICP) coins against fiat currencies or other cryptocurrencies. 

For those who are new to the crypto trading space, our How to Trade Internet Computer Guide can help you learn the basics. We will discuss the different trading strategies you can follow, and how you can handle risk-reward management. 

We will also introduce you to some of the key metrics that you can use to find a reputable crypto broker to trade ICP from the comfort of your home. 

 

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Contents:

• What is Internet Computer Trading?
• How Does Internet Computer Trading Work?
• How to Trade Internet Computer Online - Setting up a Trade
• How to Make Money Trading Internet Computer
• How to Trade Internet Computer 2023 - Step-by-Step Walkthrough
• How to Trade Internet Computer Guide - The Verdict

 

Trading IPC digital currency is no easy feat - which is why we have put together an in-depth guide on How to Trade Internet Computer. Within it, we explain the ins and outs of how this investment scene works, what risks and rewards you need to consider, and how you can start trading Internet Computer today. 

What Is Internet Computer (ICP) Trading?

The Internet Computer project was created with the objective of decentralizing the web. Like the Ethereum blockchain, the Internet Computer ecosystem also enables the development of smart contracts. 

For instance, one can use it to build decentralized applications, websites, or even web services such as social media on the Internet Computer blockchain. 

However, the creators of Internet Computer - Dfinity Foundation, claim that the smart contracts developed on the ICP blockchain can run at the same speed as the internet. In other words, in the future - the ICP blockchain has the potential to be an alternative to the current version of the world wide web.

That said, the underlying concept of trading ICP tokens is similar to that of other cryptocurrencies. The price of this digital coin shifts throughout the trading day, and perhaps, even by the second. 

When trading Internet Computer, you will be speculating on the future price of the digital coin. In a nutshell, your aim is to predict whether the value of the token will increase or decrease in the future. 

There are a number of aspects that can influence the price volatility of Internet Computer. However, it all comes down to the supply and demand of the token itself. If the majority of traders are looking to buy the coin - then it will lead to an increase in its value.  

On the contrary, if more traders are looking to sell their Internet Computer coins, this will be reflected in the market by its decreasing value. As a crypto trader, if you are able to successfully speculate these price movements and place appropriate trades - you will be able to make a profit. 

A simple Internet Computer trade will look like this: 

• Let's suppose that the value of Internet Computer tokens stands at $190.
• This will be represented at ICP/USD on cryptocurrency platforms. 
• Believing that the price of the ICP tokens is about to rise - so you set up a buy order worth $1,000. 
• A couple of hours later, the value of a single ICP token rises to $220. 
• This shows a 5% increase in the price of the coin. 
• Pleased with your gains, you place a sell order on your ICP token holdings. 

As per this example - on your $1,000 stake, you were able to make a profit of $50. 

Of course, the amount of profit you can generate from an Internet Computer trade will depend on a few factors - such as the price movement and your stake. 

However, the key takeaway is that if you can predict the market correctly - trading Internet Computer can lead to attractive profits. That said, if your speculation is wrong - then you will be looking at losses instead. 

How Does Internet Computer (ICP) Trading Work?

As we briefly touched upon earlier, the process of trading cryptocurrencies like Internet Computer is similar to that of any other asset. 

However, when compared to financial instruments such as stocks and commodities, cryptocurrencies are still considered somewhat a new asset class. Moreover, ICP is also a DeFi token - which adds to the complexities involved. 

Therefore, it is important to make sure that you are armed with sufficient information before you place any trades on Internet Computer. 

In this segment of our How to trade Internet Computer guide, we will introduce you to some of the most helpful trading fundamentals. 

Internet Computer Trading Price Movements

The market price of cryptocurrencies is dictated by supply and demand. If there is a rising demand for Internet Computer, then there will be more traders looking to capitalize on this coin - which will drive up prices. 

Conversely, if the market turns against Internet Computer, then traders will want to sell their ICP holdings - leading to a decrease in prices. 

As you can imagine, the trick is to understand which factors influence this market sentiment. 

• For instance, if there is wide-scale adoption of the Internet Computer protocol in the decentralized ecosystem, then the price of the ICP token will also react accordingly. 
• On the other hand, if other blockchain technologies emerge with the same concept - this will also affect the price of ICP. 

Crypto assets like Internet Computer are also known for their volatility. With this in mind, you might notice that the price of the coin is quoted differently on various cryptocurrency platforms. 

For example, one broker might display the value of the ICP token as $190.50, whereas, on another site, the coin might be priced at $190.59. Such a slight difference is quite common and nothing that will impact your profits from trading Internet Computer. 

Internet Computer Trading Pairs

Similar to forex trading, cryptocurrencies are also traded in terms of pairs. When considering how to trade Internet Computer - you have two options in front of you. 

The first one is to trade ICP tokens against fiat currencies - like the US dollar, or euro. This will be called a 'crypto-fiat pair. 

For example, you might come across the pair ICP/EUR on several cryptocurrency platforms. In this trading pair - ICP is the crypto, and EUR is the fiat currency. 

As you can imagine, you will see ICP tokens traded the most against US dollars. This is because the USD is the most widely used and liquid fiat currency in the financial market. 

However, some online crypto brokers also allow you to trade ICP tokens against other popular fiat currencies - such as the British pound (ICP/GBP) or Japanese yen (ICP/JPY). 

Choosing to trade a crypto-fiat pair will make it relatively easier for you to speculate on the future exchange rate, as well as to measure profits and losses. As such, you will find that most beginner traders prefer to choose a crypto-fiat pair. 

On the other hand, you can also trade Internet Computer against alternative cryptocurrencies. For instance, you will find crypto-to-crypto pairs such as ICP/BTC or ICP/ETH on brokerage platforms and exchanges. 

However, when trading a crypto-to-crypto pair - you should have a sound knowledge of both digital assets involved, which might be a challenging undertaking for novice traders. 

Long or Short-Term Trading

If you are thinking of how to trade Internet Computer - you should first know the distinction between a long-term and a short-term strategy. 

In most long-term trading strategies, you will be taking ownership of the digital asset - in this case, Internet Computer. You will be buying ICP tokens from an online broker and storing them in a private crypto wallet - hoping that they will increase in value over time. 

Buying cryptocurrencies using this investment mindset is called 'HODLing.' In effect, you will 'buy and hold' ICP tokens until they appreciate in value. Crypto HODLers choose to hold their digital assets for months or even years at a time. 

At the other end of the scale, short-term strategies often capitalize on the price movements of the asset within the duration of weeks, days, or even minutes. As you can imagine, this requires a firm grasp on the markets, as well as the usage of technical analysis tools to arrive at trading decisions. 

If you are a new trader, then a short-term strategy such as day trading might involve a steep learning curve. 

For this reason, many newbie traders prefer the 'buy and hold strategy' for their cryptocurrency trades. If you choose this long-term approach, you do not have to be concerned about the short-term price swings of Internet Computer. 

Read Also: Pros and Cons of Investing in Internet Computer

Trade and own Internet Computer

In many ways, adopting a 'buy and hold strategy' for Internet Computer can be advantageous. This way, you do not have to spend any time watching over the market every single day. 

There is no shortage of crypto providers in the online trading space. However, when thinking of purchasing Internet Computer coins, the best to do so is via a regulated online broker rather than an unregulated cryptocurrency exchange.

Choosing a regulated platform will protect your funds and assets with an additional layer of security - under the watchful guidance of financial authorities. 

Internet Computer Trading 

If you want to try your hand at short-term trading of Internet Computer coins - you will be placing multiple trades in a single day using 'day trading' or 'swing trading' methods. 

When thinking of how to trade Internet Computer in the short term - your best way is to choose a regulated broker that gives you access to Internet Computer CFDs. 

A CFD or Contract For Difference is a derivative instrument that will allow you to trade ICP tokens without having to take ownership. It also comes with the advantage of low fees and access to leverage. 

Perhaps, most importantly, the main benefit of trading CFDs is that it allows you to capitalize on the bullish and bearish markets of the asset. 

At this point, it is important to make a note of the fact that crypto CFDs are not legal in many countries - including the US and the UK. 

In such jurisdictions, you might come across third-party cryptocurrency exchanges enabling you to access leveraged digital currencies. However, the chances are that these platforms will be unregulated, and you will be inviting additional risks to your Internet Computer positions. 

Moreover, you will not be able to trade ICP tokens against fiat currencies such as USD. Instead, your options will be limited to trading ICP against other cryptocurrencies or stablecoins such as USDT or BUSD. 

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

How To Trade Internet Computer (ICP) Online - Setting Up A Trade

In order to trade Internet Computer efficiently, you should have a firm grasp on different trading orders. These are instructions that you give to your broker to convey what position you are taking on your chosen asset. 

Here are the most common orders that you need to be aware of. 

Buy or Sell Order

One of the first things to consider when trading Internet Computer is to decide whether you want to place a buy order or a sell order. 

• If you believe that the price of Internet Computer will go up - then you will set up a buy order. 
• If you speculate that the price of Internet Computer will fall - then you will create a sell order. 

Every single trade you place on Internet Computer will require both buy and sell orders. 

For example, if you set a buy order first, then you will issue a sell order to exit your position. 

On the other hand, if you use a sell order to open your position, you will issue a buy order to close it. 

Entry Price

Once you know which position you want to take on Internet Computer, then you can decide at what price you want to enter the market. 

To do that, you can choose one of the following trading orders. 

• Market order - Market orders are used when you want to buy Internet Computer at the quoted price. 

For instance, suppose that your chosen broker has ICP tokens priced at $190.00. When you place a market order - your online broker will execute the trade immediately. However, there might be a slight price variance due to the volatility of the market.

• Limit Order: On the other hand, limit orders give you more control over the entry price. 

For example, let us suppose that Internet Computer token is priced at $190.00. But, you wish set a limit order at $192.00. This means that your broker will execute your order only when the price of the ICP coin reaches $192.00. 

Exit Strategy

Once you have set up your Internet Computer trade, you should also decide on how you want to close your position. You can do that using the following orders:

• A 'take-profit' order instructs your broker to close the trade when a specific profit level is reached. 

• A 'stop-loss' order is used to close your trade with minimal losses if the trade does not go as you planned. 

Depending on how the market moves, the respective trading order will be triggered - closing your trades automatically. 

Here is an example that will demonstrate how you can use multiple orders when trading Internet Computer:

• Let us say that you want to trade ICP/USD. 
• The current price of the trading pair stands at $180.00. 
• So you place a buy order. 
• You have a profit target of 3% on this trade. 
• As such, your take-profit order is set at $185.40. 
• In the meanwhile, you don't want to risk losing over 2%. 
• So you create a stop-loss order at $176.40.

Now, if the price of ICP/USD increases to $185.40 - your broker will move forward with the take-profit order. You will secure a profit of 3%, and your trade will be closed. 

On the contrary, should the value of ICP/USD drop to $176.40 - your broker will execute the stop-loss order and close the trade. This way, you will be able to limit your losses to 2% 

As you can see from this example, you can choose to place take-profit and stop-loss orders at either end of your entry price. No matter how the market moves, you know that your respective trading orders will be executed at the price levels set by you. 

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

How To Make Money Trading Internet Computer (ICP)

Along with the aforementioned trading orders, there are a few other things that you need to know that can affect your profit potential. 

The following are some of the most important factors that you need to be aware of before placing trades on Internet Computer. 

Stake 

One of the first things you need to decide is how much capital you are willing to put into the trade. As you can imagine, the higher the stake, the more your potential profits can be. 

However, you should also remember that trading Internet Computer also carries an inherent risk. 

Therefore, it is common for crypto traders to employ a bankroll management strategy. For instance, many successful traders never risk more than 1% of their total trading account balance on a single trade. 

If you are learning how to trade Internet Computer for the first time, it would be good to have such a conservative method to mitigate your losses. 

Internet Computer Trading Leverage

When discussing short-term trading strategies, we mentioned that CFDs are not available in all jurisdictions. With that said, if you are able to legally access this financial instrument in your country - then leveraging can help you amplify your gains. 

This is how leverage works when trading Internet Computer:

• Let's suppose that you want to place a buy order on ICP/USD. 
• You are willing to stake $1,000 on this trade. 
• You also choose to apply leverage of 1:5. 
• After some time, the price of the ICP/USD pair increases by 10%. 
• Ordinarily, your profit from this trade is $100. 
• But since you applied leverage of 1:5, your profits are increased to $500. 

As you can see, applying leverage can significantly boost your gains. However, you should also be wary of the risks, as leveraging can also amplify your losses. 

Fees to Trade Internet Computer Online

If you are learning how to trade Internet Computer for the first time, you should also be aware of the fees involved. Regardless of which trading strategy you choose, you will have to pay some sort of fee to your chosen online broker. 

Take a look at the most common crypto trading fees you are likely to come across. 

Internet Computer Trading Commission

Trading commissions are levied on all cryptocurrency trades. This is usually charged as a flat rate or a percentage - calculated against your stake. 

Once again, the trading commissions applicable will differ from one broker to another. However, you will also find that many reputable trading platforms advertise commission-free trading - which can help you reduce the trading costs. 

Internet Computer Spread 

In trading terms, the spread is the difference between the buy and sell price listed by the crypto broker. When thinking of how to trade internet Computer - ideally, you want to choose an online brokerage platform that offers tight spreads. 

For example, if your broker charges a spread of 2% on Internet Computer, then it means that you will be opening a position at a 2% loss. In other words, you will have to make a 2% profit in order to break even on your trade. 

Other Internet Computer Trading Fees

Aside from the above trading fees, brokers can also charge you to cover the operational costs on the platform. 

This includes:

• Deposits / Withdrawals: Some brokers charge you payment processing fees which are charged for deposits and withdrawals on the platform. 
• Inactivity Fee: It is also not uncommon for brokers to charge you an inactivity fee to traders that haven't met the minimum activity level on the platform. Usually, you are liable to pay this after 12 months of inactivity. 
• Overnight Fee: If your chosen broker gives you access to CFDs, then you might also be charged an overnight fee. This will be calculated for every leveraged position you leave open overnight. 

To reiterate - the fees and commissions charged by your chosen broker can dictate your profitability when trading Internet Computer. 

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

How To Trade Internet Computer (ICP) 2023 - Step-by-Step Walkthrough

If you have read our guide this far - by now, you should have a clear idea of how to trade Internet Computer. 

We will conclude this guide by giving you an account of how you can start trading this digital asset from the comfort of your home. 

Step 1: Choose Your Internet Computer Trading Broker

The first thing you need to do is to find an online broker that gives you unfettered access to Internet Computer markets. However, considering the many options available, you need a system to figure out which brokerage platform is the best fit for your needs. 

For that, consider the following factors:

• Regulation: Is your chosen Internet Computer provider licensed by any financial authorities, such as the FCA, SEC, CySEC, or ASIC?
• Fees: What fees are charged by the broker?
• Payments: What type of payment methods are available?
• Minimum Deposits: Does the platform have a minimum deposit policy for trading Internet Computer?
• Internet Computer Pairs: What Internet Computer trading pairs are offered on the platform?
• Trading Platform: Is the trading platform user-friendly for all levels of traders?
• Mobile App: Does the platform come with a mobile application?

By sticking to our checklist, you will be able to find an online broker that is reliable, trustworthy, and cost-effective. 

Step 2: Open an Internet Computer Trading Account

Once you have selected an online crypto broker, you can create a trading account on the respective platform. 

You can start by filling in your personal information - such as full name, address, and date of birth. On regulated platforms, you will also have to complete a verification process before you can proceed. This typically requires you to upload a copy of your government-issued ID.

Step 3: Deposit Funds

When you have completed the verification stage, you can start depositing funds into your account. Depending on your chosen broker, you will be able to choose between a variety of payment methods - including a credit card, debit card, bank transfer, or e-wallet. 

Step 4: Choose Internet Computer Trading Market

After adding funds, your account is now ready to start trading. At this point, you can find the Internet Computer trading page by using the search box. 

For instance, if you want to trade ICP tokens against US dollars, you can enter ICP/USD in the search bar. 

Step 5: Place Internet Computer Trade

When you have found your chosen trading pair, you can proceed to set up your orders. We covered this in great detail in the previous sections of our guide - feel free to revisit if you want a recap. 

When you are ready, press on the 'Open Trade' button to execute your Internet Computer trade. 

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

How To Trade Internet Computer (ICP) Guide - The Verdict

Mastering how to trade Internet Computer is not something you can do overnight - especially if you are new to the crypto trading arena. However, by reading guides such as ours - you will be able to gain a better understanding of the risks and rewards involved. 

Crucially, always make sure that you choose a reputable and regulated online broker for trading Internet Computer. It is best to look for a platform that is beginner-friendly and offers commission-free access to the cryptocurrency markets. 

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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