How to Trade Maker: A Step-by-Step Guide
Comprehensive Guide to Trading Maker
Are you interested in learning how to trade Maker token but unsure what to do or even where to start? Well, this guide might be precisely what you need!
Maker trading is pretty straightforward once you get the hang of it.
Maker is a fast-growing decentralized finance protocol that was built on the Ethereum blockchain by Rune Christensen and his team. The project allows its holders to take loans by collateralizing Ethereum.
Owing to the project’s numerous use cases, it has garnered some traction in the cryptocurrency market. You may be looking to join the thousands of people trading the Maker token. If that’s the case, we have created this How to Trade Maker Guide to answer all your questions and offer you the needed clarity to kickstart your journey.
With this comprehensive guide, experienced and novice cryptocurrency holders can conveniently trade Maker and attempt to make gains accordingly.
You will learn how to trade Maker tokens with various strategies and ways to mitigate potential risks. We will also guide you through how to create your brokerage account within a few minutes.
If you want to trade Maker with 0% Commission, check out eToro Exchange!
How to trade Maker in 5 Easy Steps:
To trade maker, the first step is to open an accout with a regulated exchange, depost funds, select Maker MKR from the platform list, and lastly Buy MKR (go Long) or sell MKR (go short).
This guide on how to Trade Algorand asset will break everything down in Layman’s terms so that you do not trade blindly. But, if you don’t quite have the time to read it all of the ways through, this is what you need to do to trade ALGO now.
Step 1: Open an account with a regulated Crypto broker
Step 2: Funds your account
Step 3: Choose how much Maker you want to trade
Step 4: Buy MKR (go long) or sell MKR (go short)
Step 5: Confirm the trade
What is Maker Trading?
Maker has been created to make loans more accessible in the cryptocurrency world. All you need to do is collateralize your Ethereum tokens, and you can take the loan you need. The project also seeks to contribute to the stability of the cryptocurrency ecosystem. This is established in how the token interacts with the DAI stablecoin.
Learning how to trade Maker requires an understanding of the market’s volatility and adopting effective strategies accordingly. Trading Maker also involves price speculations because you’ll be buying and selling the coin based on your assessment of the market.
This brings us to the issue of volatility.
- Cryptocurrencies like Maker are subject to extreme or regular highs and lows caused by market speculation, the Fear of Missing Out (FOMO), and news on digital tokens - among others.
- As such, whether you’ll make a profit depends on how well you can navigate and predict the Maker marketplace.
Traders make use of different market tools to assess the prices of various tokens. But it is more advisable to base your decision on your personal assessment of the coin’s demand and supply.
For instance, if there is a high demand for Maker, the coin’s price is likely to increase, meaning this may be the right time to enter the market. On the other hand, if Maker coin holders are looking to sell off their assets, you should equally expect the price to drop.
Let’s go through a practical example of a Maker trade:
- Suppose Maker has a current price of $3,300.
- You study trading charts and conclude that Maker's price could go up because it is currently undervalued.
- Subsequently, you place a $1,000 buy order on Maker.
- Just as you predicted, the price increases to $4,000, which equates to a 21.21% rise.
- To cash out your profit, you decide to close the trade by selling your Maker.
From the example above, you would have made a profit of just over $212 on the $1,000 you invested. Thus, the hack to gaining a profit from trading Maker is knowing when to place your order. Additionally, it is essential to back up your trading decision with adequate market research.
Understand the project first, double-check your reason for going long or short, and trade moderately in case your predictions don’t go as planned. This makes it important that you understand the things to look out for when thinking about trading Maker.
We shall discuss the necessary considerations below.
How Does Maker Trading Work?
Trading is not a new concept. Irrespective of what you’re trading, the basic principles are often similar. You buy a coin based on a careful assessment and sell when you believe the time is right.
However, as straightforward as this may sound, not everyone understands how to go about it. Therefore, we will discuss the things you need to know before trading Maker to enable you to do so successfully.
Maker Price Movements
Maker price movements are affected by the forces of demand and supply. These forces cause the coin’s price to rise and fall at irregular intervals. There are other factors that also affect the token’s price, and knowing them helps you make an informed buying decision.
- For instance, the circulating supply of Maker, its market capitalization, and innovations concerning the project may all affect the coin’s price movements.
- Additionally, the perception of Maker in the cryptocurrency world can also determine the way in which traders relate with the coin.
All these factors contribute to Maker’s volatility, which dictates the token’s highs and lows in the market. This volatility increases the risk associated with trading the token. However, on the flip side, this volatility also presents traders with numerous opportunities to enter and exit positions.
Therefore, it is crucial to have a thorough Maker trading strategy, as this will help you navigate the coin’s price movements.
Maker Trading Pairs
You also need to know what Maker trading pairs are. This essentially means that you’ll be exchanging two currencies. That is, for you to trade Maker, you have to do alongside another asset.
Buying digital tokens in the cryptocurrency market happens in two ways - either you use fiat money or you exchange for another coin.
As such, you will find that Maker trading pairs exist in two forms:
- Maker-Fiat pairs: Here, you trade Maker using fiat money. So, depending on the fiat currency, you can have this in the form of MKR/USD (US dollars), MKR/EUR (euros), or MKR/GBP (British pounds).
- Alternatively, there are also Maker-cryptocurrency pairs. Here, you exchange another cryptocurrency for Maker. Pairs in this category include MKR/BTC (Bitcoin), MKR/BNB (Binance Coin), MKR/ETH (Ethereum), among others.
Essentially, trading Maker in terms of pairs involves valuing it in comparison with another asset.
- A practical example is when MKR/USD has a quote of $3,300. This means that one Maker coin is worth 3,300 US dollars.
- Alternatively, if MKR/ETH is 1.02, this means that the price of one Maker coin is 1.02 Ethereum.
From the above, it is clear that trading Maker coins using a fiat currency is straightforward, especially for novices. On the other hand, it can be quite complicated when you go through a Maker-crypto pair. Therefore, beginners are more inclined to use the fiat method until they become more familiar with the markets.
Additionally, when you trade Maker against a fiat currency like the US dollar, you may be unlocking access to more liquidity and lower spreads.
Long or Short-Term Trading
When you choose to trade Maker, you may decide to adopt a long- or short-term plan. Essentially, this means that you may decide to hold your Maker coins for months or just a few days.
Your desired option will impact your trading strategy and how much money you put into the asset.
Let’s give a further explanation on this:
- If your trading plan for Maker is long-term, then perhaps you should consider it an investment.
- That means you’ll purchase Maker and hold it until it becomes profitable to sell.
- This trading strategy is most suitable if you are new to cryptocurrency. With this strategy, you can enjoy returns from Maker without having to closely monitor price movements.
Alternatively, you may decide on a short-term trading plan. You can do this through various strategies, including scalping, swing, and day trading. Your preference and goals will determine the one you go for.
- As a trader with a short-term plan, you look to profit off Maker’s minute-by-minute price movements.
- However, you will need to learn how to predict the market through technical and fundamental analysis, and high-impact news that can affect the price of Maker.
- As such, short-term trading may be a bit challenging for cryptocurrency newbies to grasp quickly.
Trade and Own Maker
Before you can trade Maker on a long-term basis, you will have to purchase some of its tokens. To do this, you will need a credible and regulated broker. When choosing a broker, it is best to consider one that offers low fees and a strong regulatory framework.
An example is eToro, a regulated broker accessible to anyone who intends to trade Maker. The broker supports a wide range of payment options, which makes it seamless for trading this digital token. Additionally, the broker is highly licensed by the FCA, ASIC, and CySEC - making it adequately secure.
So, if you are looking to buy and hold your Maker coins on a long-term basis, you can create an account with eToro. At the same time, if your preference is short-term trading, you can also use eToro for that - not least because the platform offers 0% commissions and tight spreads.
Trading Maker with a short-term investment plan entails entering and exiting the market multiple times to make profits. This means that you might choose to buy and sell your Maker coins multiple times daily. However, holding coins for minutes or seconds is not always practical.
As such, many cryptocurrency traders prefer leverage CFDs instead. Essentially, CFDs refers to contracts-for
-differences, which means you trade Maker based on the coin’s value without owning the token. That is, you will not be purchasing Maker coins but rather making speculations on the price of asset.
Maker CFD trading is also beneficial in that you may opt for long or short positions. A long position means that you anticipate the value of Maker to increase while shorting means you expect its price to decrease.
- Furthermore, trading CFDs is beneficial because they are leveraged products that allow you to maximize your trades.
- Interestingly, many platforms now provide for Maker CFDs, meaning you can get one for your desired pair quite easily.
Notably, if you live in a region that prohibits CFD trading, you may have to resort to getting the service through online exchanges. However, it is important to note that you may not be able to fund your trading account with fiat money, as most cryptocurrency exchanges are not regulated.
Instead, you’re provided with the option of trading Maker against a stablecoin such as USDT or USDC because these tokens mirror the value of the US dollars. Once again, eToro is a great option if you seek access to long and short positions alongside leverage - as the platform offers Maker CFDs.
How to Trade Maker Online - Setting up a Trade
Learning how to set up a trade is an important aspect of this guide. Typically, this is how you let your broker know you want to purchase some Maker tokens, the price you want to enter the market, and when to close the trade.
There are diverse ways to set up a Maker trade. If you’re a newbie, we have provided the following steps to guide you through:
Buy or Sell Order
To set up a trade, you have to decide whether you intend to buy or sell Maker.
- A long Maker position means you start your trade with a buy order and end it by selling the token.
- On the other hand, a short Maker position means you begin your trade with a sell order and exit the market by buying the token.
Essentially, if you use any of the above orders to open a Maker position, you’ll exit the market using the other.
This refers to the price at which you intend to enter the market. Once you decide on such a price, you can inform your broker accordingly. This can be done in two major ways based on your trading strategy and preferences.
With a market order, you don’t get to determine the price at which you enter the position. Instead, you input your Maker stake, and the broker will execute the trade based on the next best available price.
Essentially, you can receive Maker at a value slightly different from that quoted. This is due to the volatility of Maker.
Nevertheless, a market order is a popular entry method, especially if you are trading short-term and looking to profit from Maker price movements.
Check Out: Why Maker Coin Will Skyrocket
Alternatively, if you desire more control over the price you enter the market, you may opt for a limit order instead. Here, you not only decide your stake, but also the price you intend to buy or sell Maker. This method is most suitable when you have a specific strategy you intend to follow.
However, the price of Maker may never reach the target you intend to execute your position. When this happens, your order remains pending, and it will have to be canceled manually.
Your exit strategy is how you leave the market after completing your trade. We have provided below two methods you can opt for.
- Take-Profit Order: This is an instruction to your broker to automatically close your trade when it hits your target profit.
- Stop-Loss Order: This order, on the other hand, is a way to prevent losses if your trade goes in the opposite direction you anticipated. As such, your broker closes your position once the loss reaches the benchmark you’ve set.
Below, we provide a practical example of how these orders work.
- Let’s assume you have chosen to trade MKR/USD, which has a price of $3,300.
- Now, you want to enter a long position; hence, you place a buy order.
- You use a limit order and make $3,350 your entry price
- You anticipate a profit of 30%, thereby setting a take-profit of $4,355.
- On the other hand, you don’t want a loss beyond 10% of your entry price, so you set your stop-loss at $3,015.
Now, if your price prediction is right, your broker will close your trade at $4,355, equating to your desired 30% profit.
However, if the market takes the other route, which means Maker’s price decreases, your broker will activate your stop-loss when the price hits $3,015, leaving you with a controlled 10% loss.
Essentially, these orders are designed to automate the trading process. That way, you don’t have to monitor the market every second.
How to Make Money Trading Maker
The essence of learning how to trade Maker is to make some profit. However, the amount of money you can make from trading Maker is determined by different factors.
In the following section, we will discuss ways in which you can gain impressive returns from your Maker trades.
The amount of money you put into purchasing Maker is referred to as your stake. When staking Maker, it is best to do so based on a clear strategy rather than mere instincts.
Of course, the higher your Maker stake, the more money you stand to generate, if your trade goes as predicted. However, if the trade doesn’t go in your favour, you’ll equally incur a larger loss.
A practical way to go about staking is putting a benchmark on the amount you’re willing to put on Maker at every point you intend to trade.
Let’s put this in context.
- You can decide not to go beyond 5% on all your Maker trades. This means that if you have $10,000 in your account, you cannot stake more than $500 per trade.
- Essentially, the 5% limit you have imposed on yourself will ensure you don’t do more than you can bear.
A strategy such as this helps you achieve more consistency across your trades. So, when you choose this kind of system, it’s advisable to go for a broker that equally allows you to invest a small amount.
For instance, eToro allows you to start trading Maker with a small amount of just $25. Starting with such a small amount reduces your risk exposure.
Maker Trading and Leverage
As we established earlier, you may choose to trade Maker CFDs. Doing this means you won’t be taking ownership of the Maker tokens, but instead trading their value.
Let’s walk you through that process.
- For instance, you desire to place a buy order of $5,000 on Maker.
- However, there’s only $500 in your trading account.
- In this instance, you can utilize leverage of 1:10.
- This translates to staking your $500 while the broker lends you the rest to make $5,000
- If this trade closes with a 10% profit, that means you would have made $500 from your $5,000 stake.
- Now imagine you didn’t use leverage, you’d have only staked $500 and made a profit of $50.
Just as leveraging can make you lots of profit, it can also attract a massive loss if you don't predict the market correctly. As such, it is best to first make thorough risk assessments before you delve into it.
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Fees to Trade Maker Online
When trading Maker, most brokers charge you certain fees and commissions. If your desired broker charges high fees, your profit may be greatly affected. However, this doesn’t mean brokers with minimal fees are the best.
Nevertheless, to properly understand how to trade Maker, you need to take note of the common fees most brokers charge.
Maker Trading Commission
Commissions are charges that your broker places on each trade it makes on your behalf. Essentially, each time you enter and exit the market, your broker charges you a fee for facilitating the trade. Note that the charges may differ from one platform to another.
Let’s take a look.
- Your broker may charge you a fixed percentage on each of your trades.
- For instance, you may be charged 2% per trade, meaning a $1,000 Maker stake will amount to $20 in commission.
- Exiting the trade also attracts a fee, meaning if you close your Maker position at $1,500, you’ll pay 2% of that to your broker. In that case, 2% amounts to $30.
Interestingly, some brokers charge little to nothing on each trade you enter. For instance, eToro charges no commission on your Maker trades. Despite that, you still need to be aware of another popular fee referred to as the “spread.’
Another way brokers make money on trades is through the spread. The concept refers to the gap between the ask and bid price that your broker allocates to the token you want to trade, which in this instance, is Maker.
Now, the lower the spread, the easier it is to make a profit. For instance, if your broker charges you a 10% spread on each trade, you automatically lose the equivalent amount when you enter the market.
So, essentially, your profits must surpass that 10% to cover the spread and leave you with some returns.
Other Maker Trading Fees
Aside from spreads and commissions, you may also incur some other fees when trading Maker.
Some of them include the following:
- Deposits and Withdrawals: Brokers also make money by charging you a fee each time you make a deposit or withdrawal. The rate varies from one platform to another and often depends on how much you deposit or withdraw and your payment method.
- Overnight Fees: If you engage in a trade that extends to the next day, your broker may charge you a 'Swap Fee.' This often happens if you’re trading Maker CFDs.
- Inactivity Fee: Some brokers may charge you a fee for not meeting up with the required level of trading activity. If this is the case, the broker will have this stated in its trading policies, so you can always read up.
It is worth noting that although these fees may appear insignificant, they can greatly reduce your profit when accumulated.
As such, it is best to opt for a broker with low fees and/or no commission at all. eToro ticks the box here.
How to Trade Maker - Step-By-Step Walkthrough
This section in our How to Trade Maker Guide is where we will explain the exact steps you need to understand when trading this cryptocurrency.
Step 1: Choose a Maker Trading Site
Again, it is essential that you choose the right broker for trading Maker. As earlier established, using the right broker determines the flow of your Maker trading experience.
But getting the right broker is not as easy as many traders think. To help you out, we have highlighted some key considerations you should make.
- Regulations: It’s usually best to opt for a broker regulated by a reputable financial authority. Some of these institutions include the FCA, CySEC, or ASIC. eToro is regulated by these bodies, making it one of the reasons the broker stands out.
- Fees: You may also confirm if your broker charges exorbitant fees on each trade. This gives you an insight into the broker’s fee structure.
- Payments: It is also important to consider the supported payment methods. A broker like eToro permits you to pay through numerous means, such as a debit/credit card, e-wallet, and bank transfer.
- Minimum Deposits: You may also consider the minimum required deposit by your broker. This lets you understand if the broker is compatible with your budget.
- Maker Pairs: Not all brokers allow you to trade Maker against both fiat money and cryptocurrencies. As such, you may want to know the pairs supported by your chosen broker.
- Trading platform: Your broker's user interface is an important thing to consider. Can you conveniently navigate the platform?
- Mobile Applications: Some brokers only offer trading services on their website. However, mobile applications make things easier, so you may want to confirm if your broker supports that.
As a beginner, you’re advised to evaluate numerous brokers before making a choice. From our assessment, we found that eToro is a broker that distinguishes itself with impressive features.
A major factor about the trading platform is that it’s regulated by reputable financial bodies - including CySEC, ASIC, and FCA. Additionally, trading with the broker is cost-effective - as you can buy and sell Maker on a 0% commission basis.
Therefore, to guide you adequately, we’ll use eToro to put you through the process of trading Maker.
Step 2: Open a Maker Trading Account
You can get started with eToro by creating a trading account and completing the necessary steps. Within a few minutes, you’d be done with that.
Following your registration, you’ll need to verify your identity. This involves submitting a valid ID, which can be your driving license or passport. This is in addition to the proof of address you’ll need to provide, which essentially is a document that contains the relevant details concerning where you live.
Step 3: Add Funds
Next, you have to deposit funds in your eToro account through any of the supported payment options. This can be through your debit/credit card or e-wallet and the minimum deposit you can make is $200.
Step 4: Choose a Maker Trading Market
You can now trade Maker by finding a suitable pair. Simply search MKR and make your choice.
Step 5: Place Your Maker Trade
Finally, you can place a Maker trade by choosing an order type, the amount you want to stake, and the price you intend to enter the market.
Following that, you can complete the process by clicking on the 'Open Trade' button. Once you do that, you have just completed a seamless Maker trade on eToro without paying any commission!
How to Trade Maker Guide - The Verdict
By now, we are confident that you are well equipped with enough information on how to trade Maker. We have covered the factors to look out for when choosing a broker and the different ways you trade Maker to gain a profit.
When you choose the right broker, for instance, eToro, you can execute all these trading processes in no time and in a cost-effective manner. In this How to Trade Maker Guide, we have explained the importance of thoroughly assessing the market and the coin you’re trading.
As such, make sure you understand the risks associated with trading Maker before getting started. When you do this and proceed to trade with a well-regulated platform like eToro, you can enter and exit positions from an informed perspective.
eToro – Best Exchange to Buy Maker
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.
How to Trade Maker?
Trading Maker is convenient when you do so through a regulated and low-cost broker like eToro.
How much should I risk on Maker?
The amount you choose to stake on Maker depends on a few factors. This includes your investment goals, market assessment, financial standing, and risk appetite - among others. However, it is advisable to start trading with small amounts. This makes eToro a great platform because the broker allows you to trade Maker from just $25.
How to make money from Maker trading?
You can make money from trading Maker coins by predicting its future market price correctly.
Can I trade leveraged Maker CFDs?
You can trade leveraged Maker CFDs. However, not all platforms provide this service. Additionally, your location may also disallow you from trading Maker CFDs.
Which is the best broker for trading Maker?
You can trade Maker on numerous trading platforms. However, your best bet is a platform like eToro. The broker offers a regulated trading service, as you don’t have to pay a dime in commission.