How to Trade NEO 2021
Cryptocurrency trading has exploded in the last decade or so. Following Bitcoin's success, we have since seen a myriad of altcoins enter the market.
At the forefront of this is NEO - which is now a hugely popular digital currency to trade.
In many ways, NEO is deemed the Chinese's riposte to Ethereum.
The cryptocurrency can be purchased or exchanged in several ways, including via regulated brokers.
In this guide, we walk you through the rudimentary aspects of how to trade NEO online.
What is NEO Trading?
NEO is a blockchain-based platform that aims to build a smart economy. NEO is the official currency of this network and can be traded either against other cryptocurrencies, or fiat currency.
With the rapid advancement of the internet, a great deal of attention has shifted from traditional financial instruments to digital assets such as NEO.
This operates in the same way as conventional assets with an underlying value that can be bought, owned and exchanged by individuals.
Similar to the likes of stocks and forex, the financial value of NEO can be analysed and speculated based on the supply and demand in the market.
A surge in demand for NEO will result in its price moving upwards. And in the inverse, a sinking demand translates to lower prices.
To capitalise on NEO, a trader should be able to predict the market's attitude correctly.
Let us show you how to trade NEO through an example:
- Say in December, the price of NEO/USD stands at $10
- You believe that the market is due to enter a short-term bullish phase, so place a buy order worth $1,000
- Two weeks later, NEO is valued at $12
- This means an increase of 20%
- Convinced the market is about to reverse, you place a sell order to dispose of your NEO assets.
This NEO trade leaves you with a $200 profit - as your $1,000 stake grew by 20%.
As given, if you are able to take advantage of market variations at the right time, trading NEO can leave you with significant profits. On the other hand, if the market goes against your NEO prediction, you will end up with a loss.
The takeaway HERE is that one has to be familiar with the ebbs and flow of the NEO trading market to be able to speculate correctly and thus - make financial gains consistently.
How Does NEO Trading Work?
Cryptocurrencies such as NEO are relatively new to the wider trading realm when compared to conventional assets. All the same, the concept of how to trade NEO remains more or less identical.
Whether you are a novice to trading, or only to cryptocurrencies, here are the points you need to remember while trading NEO.
NEO Trading Price Movements
Like all financial assets, NEO tends to follow the market sentiment.
If the cryptocurrency market is falling, traders might panic and try to sell off their assets to mitigate their losses, leading to a decrease in the price of NEO value.
If, on the other hand, the market sentiment of cryptocurrencies is strong, NEO's price will rise accordingly.
NEO trading is facilitated online through brokers. Oftentimes, the price of NEO will also vary between trading platforms.
For instance, on one site you might note the price of one NEO is $14.96, whereas another might offer the same digital asset at $14.90. This is often a minuscule difference that will not be of significant concern to traders.
NEO Trading Pairs
Cryptocurrency trading stands with one notable advantage. You can trade them in the form of crypto-fiat pairs, or via crypto-crypto pairs.
In other words, you can trade NEO against government-issued currency such as the USD or Euro, as well as cryptocurrencies such as Bitcoin or Ethereum Classic.
In the crypto-fiat category, the most common pair you will come across is NEO/USD. However, many brokers also offer alternative pairs such as NEO/EUR, NEO/GBP, NEO/JPY and more.
When you opt for crypto-crypto pairs, you are trading the value of NEO against another cryptocurrency. You need insight into the value and market of both cryptocurrencies to make the right speculation.
In effect, this is no different than trading a NEO-fiat pair. However, trading NEO against a fiat currency is likely to get you access to higher liquidity and hence, better spreads on trades.
Moreover, it is easier to calculate the profits and risks while trading against a fiat currency. That is, perhaps, why NEO-fiat pairs are recommended to trading novices when compared to NEO-crypto pairs.
Long or Short-Term Trading
Much like other assets, NEO can be traded with long-term or short-term profits in mind. The type of strategy you choose will depend on your financial goals.
With long-term strategies, you are essentially looking at NEO as an investment.
Let's say that you expect NEO's value to increase exponentially in the next few years. You purchase NEO coins and store them in your crypto wallet. A crypto-wallet serves as a bank for your NEO currency.
After months or years, when the market is in your favour, you can choose to sell these NEO coins and profit in return.
This approach is often called HODLing in the cryptocurrency world, which means you will "buy and hold" the asset, waiting for the ideal time to maximise your profits.
This is particularly useful for beginners because performing technical analysis and looking for short-term price shifts isn’t really required.
Therefore, a long term strategy can eliminate the pressing need to predict the market's smallest changes while still making a profit from your NEO trade.
Conversely, a short term approach will allow you to make smaller gains but more frequently. This might see you place trades at regular intervals, even multiple times a day, depending on the type of trading strategy you choose.
If going for the short-term profits, it will be best to opt for pairs that offer more liquidity such as NEO/USD or NEO/BTC.
Trade and Own NEO
For long term strategies, it is best to have a licensed online broker by your side. Long term traders tend to spend a vast amount of capital on investing, so a trustworthy platform will make the process easier for you.
If you are in the lookout for an online cryptocurrency broker, we recommend that you consider eToro.
With a longstanding reputation in the trading sector, eToro facilitates easy cryptocurrency trading with almost 100 pairs. Trades are executed at zero-commission, and you can hold your NEO coins in a secure eToro wallet.
Moreover, eToro is regarded as one of the most beginner-friendly online brokers available. Nonetheless, long term strategies are also preferred by seasoned traders who do not have enough time to watch out for every short-term market fluctuation.
Speaking of market fluctuations, there are some trading strategies where you can take advantage of this volatility. If you choose to go this way, you can try 'swing trading' or 'day trading'.
One such option is to do this via CFDs - which are derivatives that reflect the market value of NEO.
CFDs permit you to go both long and short while trading NEO. For instance, if the price is looking to rise, you can buy NEO and then sell.
Alternatively, you can go short if you think that the price of NEO will drop. In that case, you will first sell and purchase the CFDs back for a lower price, thus making a profit.
It is important to note that CFDs are not legal across all parts of the world. In several countries, particularly in the USA, CFD trading is completely prohibited. In the UK, traders can benefit from CFD trading on most financial instruments, but excluding cryptocurrencies such as NEO.
Most other regions allow cryptocurrency CFDs, albeit, check that your country of residence is permitted.
Nevertheless, here is an overview of how to trade NEO via CFDs:
- CFDs mirror the real-world price of NEO. So, if NEO is valued at $10, your CFD will also be of the same price. Tomorrow, if it changes to $10.50, so will your CFD.
- Trading CFDs allows you to apply leverage on trades.
- NEO CFDs can often be traded at competitive fees with tight spreads.
- CFDs enable both long and short training strategies, giving you the opportunity to profit from both rising and falling markets.
Since CFD leverage comes with the chance of huge returns, you will be able to find enticing limits from crypto exchanges regardless of whether it is legal in your country or not.
If you are considering this, it is imperative that you look into the consequences as you will be risking your capital.
After all, these third-party exchanges are also likely to be unregulated and require you to trade NEO against USDT instead of real US dollars. For those unaware, USDT is a digital coin issued by Tether that is pegged to the USD.
Besides, applying leverage on CFDs can also invite the high risk of losing money. Thus, it is crucial that you weigh in your understanding of how CFDs work before trading NEO in this manner.
Have You Considered Trading NEO?
How to Trade NEO Online - Setting up a Trade
NEO trading is carried out by orders that determine how you execute your strategy. These convey to your broker your position, and what your next move will be.
If you are already familiar with trading other financial assets, then NEO trading is not any different.
You place an order based on your market prediction, and the online broker executes the trade for you. Whether it goes well or not will depend on whether the market turns in your favour or against you.
Below is a list of essential orders that you need to know about when learning how to trade NEO online.
Buy and Sell Order
Buy and Sell orders are the fundamentals of any trading strategy.
- You place a buy order if you want to go long on NEO, as you expect it to rise in value.
- You place a sell order if you want to short NEO, as expect it to fall in value.
Regardless of whether you are going long or short, you will need to execute one of these orders to enter your trade.
In other words, a 'buy' or 'sell' order is how you open a position in the market. If you enter with a buy order, you close your position with a sell order and vice versa.
In a fast-moving market, the price at the execution of your entry order might vary from when the order was placed. In order to gain more control, you can further specify your trade with two different order types.
- A Market Order buys or sells the asset at the existing market price. In other words, if NEO is valued at $12.50, your buy (or sell) order will also be carried out at the same price or the very nearest price available.
- A Limit Order gives a clear indication of when the trade should be executed. For instance, you will place a limit at order $13.00 on NEO. This means that the broker will buy (or sell) your asset only when the price of NEO reaches $13.00.
Once you have entered the market, the question is, how do you exit your trade with a profit in hand, or rather, how do you limit your losses.
Naturally, you need an exit strategy.
Here are two order types to remember that will ensure that you exit at the right time.
- Take-Profit: This order type defines the profit level at which the trade is to be exited. For instance, you can set the take-profit order on your NEO trade at 4% above or below the current price, depending on whether you are long or short. The broker will close the position if and when NEO reaches the 4% cut off.
- Stop-Loss: In case you want to limit your potential losses, you should create a stop-loss order as well. For example, this might stand at 1% below or above your entry price.
Let us illustrate this with an example.
- You opened a buy order on NEO/USD at $10.50.
- You want to target gains of 4%, so you place a take-profit order at $10.92.
- If the NEO trade goes against your prediction, you want to stop your losses at 1%, so you place a stop-loss order at $10.39.
If NEO's price does hit $10.92, your position will be closed with a 4% profit.
If the market goes against you, your stop-loss order will be activated, so your broker will close your position at $10.39, limiting your losses to just 1%.
No matter which direction the asset takes, your profits or losses are pre-determined. These added instructions will save you time, and most importantly, ensure you have a clear entry and exit plan in place when trading NEO online.
How to Make Money Trading NEO
Apart from the order types and market sentiments, there are a few other factors that determine the success of your trades. Not only do you have to worry about choosing the right asset class to trade in, but you also should have control over how much money you are investing and how you are investing it.
Here are some considerations for trading NEO.
Every trade requires you to put up a stake. The larger you are willing to stake, the higher your profits will be. But so will be your losses.
Suppose you are staking $100 on NEO, and make 2% profit, which amounts to $2. If you increase your stake to $1,000, your profit will also be directly proportional, giving you $20 gain.
While you are staking huge amounts on multiple trades, it is easy to lose track of how much of your capital you are risking, and where to draw the limit. This is why traders often go for 'bankroll management' while trading. This is a practice of properly managing your money to ensure that you are bankrolled for the trades you place.
This is particularly significant when you are trading NEO with short-term strategies. It is best to limit your stakes to a certain percentage of your trading funds. Commonly, traders stick to 2% of their available trading account. For instance, say your trading account has $2,000 in it, better not stake more than $40 on your NEO trades.
The minimum amount required for trading will vary from one trader to another. In a platform like eToro, all you need is $25 to begin your trading on NEO. This means you can start by testing the waters rather than plunging into NEO trades with large sums.
NEO Trading Leverage
As aforementioned, NEO traders often engage in applying leverage on CFDs. In this section, we will get into a bit more detail on how leveraging works.
Leveraging simply means that you get to stake more money than what you have in your trading account.
To clear the mist, let us consider an example.
- Say you want to place a buy order of $1,000 on NEO/USD
- You currently have only $100 in your account
- You decide to apply 1:10 leverage
- This means you get to put up $1,000, essentially borrowing the rest from your trader
- You manage a profit of 10%.
- With the leverage of 1:10, your profit comes to $100
- Without leverage, it will only be $10.
On the contrary, if it were losses you encountered, you will be short of $100, instead of $10.
As such, it is worth pointing out that leveraging will magnify your losses as well.
Now, how much leverage you can apply will depend on your broker. Some platforms offer as high as 1:100 leverage on cryptocurrencies. Be wary of such extravagant leverage offers, as there is a high chance that they are unregulated, and there is lots of room to go wrong.
Fees to Trade NEO Online
All types of NEO trading will involve a set of fees charged by online brokers. In fact, if not careful, these fees can eat away a fair amount of your profits. That is why it is crucial that you first look at the terms and conditions and the fee structure before you sign up.
Read on to make a note of the different types of fees you will come across.
NEO Trading Commission
A commission is a variable fee that is based on the value of your trade. Consequently, it is charged as a percentage of your stake. Some brokers charge you commission for each trade, whereas others will charge at both ends of the trade, that is, a commission for opening a position, and again for closing it.
That said, there are also brokers with whom you can trade commission-free. One such brokerage is eToro, where NEO trading is charged zero-commission.
In cryptocurrency trading, a spread is the difference between the asset's ask price and the bid price. You will have no trouble in finding online brokers that offer NEO trading at competitive spreads.
In short, for you to attain maximum profit in hand, you want a tight spread. To put it better, if you find a broker that offers 2% spread in your NEO trade, this means that you need the position to make at least 2% to break even. Anything you earn over 2% will go into the profit.
Other NEO Classic Trading Fees
Above we discussed the most common trading fees. However, as online traders run a business, they also charge you with extra fees on various accounts, such as:
- Overnight Fees: Also known as 'Swap Fees', it is an interest charged when you hold a position overnight. The interest is calculated daily and is based on the value of your stake. Some brokers also charge you a high overnight fee for the weekends.
- Inactivity Fees: If you haven't met the minimum activity in your trading account for a specific duration, you might have to pay an inactivity fee. Typically, online brokers charge this after six months or one year of inactivity. You might be paying a monthly fee unless you close your account, or start trading again.
- Deposit and Withdrawal Fees: Deposit and withdrawal fees occur every time you make a transaction on your trading account. While most online brokers cover the charges of deposits, you might have to pay a small withdrawal fee from your end. At eToro, you will be subject to a withdrawal fee at a reasonable 0.5%, that too only if you are not depositing funds in USD.
Ready To Start Trading NEO?
How to Trade NEO 2021 - A Step-by-Step Walkthrough
Now that we have covered all the essentials of NEO trading, all that remains is for you to choose the right broker. Much like any other business, you need to have a clear intention of what you are looking for in a trader.
Follow our guide, and you will be on your way to being a NEO trader in no time.
Step 1: Choose a NEO Trading Site
In trading, every second, every penny, and every decision carries tons of weight. Choosing your online broker is the first step towards getting your NEO trading right. With the surplus of choices, the process is nothing if not overwhelming and confusing.
To make things simpler, we have created a list for you to crosscheck the qualifying factors of online brokers.
- Regulation: Does the online broker hold any licenses from regulatory bodies such as the FCA, CySEC, ASIC, or the SEC?
- Fee Structure: What is the broker's take on commission and spreads on NEO trading? Are there any other fees you are liable to?
- Payment Methods: How can you deposit and withdraw money to your trading account?
- Minimum Deposit: What is the minimum amount required for trading NEO?
- NEO Pairs: What trading pairs are available against NEO?
- Cryptocurrency Wallet: How can you store the cryptocurrencies
- Platform Navigation: How easy is it to use the site, and access its features?
- Mobile App: Does the brokerage have a mobile application?
Even with brokers ticking all these boxes, you must do a thorough review of their customers' feedback as well. As you will have noted, we have used eToro as an example throughout this article. With 13 million clients, eToro certainly comes across as a strong candidate for NEO trading.
To make the case, here are some features that make eToro one of the most reliable online trading platforms:
- The platform offers brilliant user experience and support features for all trading levels, from complete novices to professionals.
- eToro is regulated with licences from FCA, ASIC, and CySEC.
- Traders can avail of zero-commission, as well as competitive spreads on NEO trading.
- An array of payment options available, from bank cards, wire transfers, and integration with third-party wallets such as PayPal, Neteller, and Skrill.
- eToro mobile app to trade on the go.
Overall, eToro comes out ahead in choice for NEO trading, among dozens of other assets.
Step 2: Open a NEO Trading Account
When you have finalised your online broker, head over to their website and click on the sign-up button.
The registration process will require you to provide your basic personal information, including your full name, address, contact details, and date of birth. Besides, you will also be required to provide a valid government-issued ID, along with a photo proof. This is for the broker to guarantee the KYC rules in order to avoid identity fraud.
Once your account is verified, you will receive a confirmation email, and you can start trading. On eToro, you can trade NEO before this id verification, but if you need to deposit more than $2,250, you will need to complete this step.
Step 3: Add Funds
To begin trading, you first need to add money to your trading account. You can choose one of the payment options offered by the broker, and choose a secure method that is most convenient for you.
Step 4: Choose NEO Trading Market
With everything set up, all you need to do is choose your trading market. If you know which NEO pair you are trading in, you can simply search for the pair and start placing your order.
Step 5: Place NEO Trade
Remember what we discussed earlier about the order types? When you know whether you want to buy or sell NEO, you can place the order accordingly. After you have specified the orders, you can 'open trade', and voila - you have opened your position.
How to Trade NEO Guide - The Verdict
NEO is a cryptocurrency quickly emerging as a favourite among traders. However, that does not diminish any risks involved in trading NEO. You have to invest time in understanding the asset, and find an efficient regulated broker to give you access to the market.
You will fare best going for a regulated broker such as eToro. If you are a beginner, the smooth interface and the competitive fees will ensure an enhanced trading experience on the platform.
Meanwhile, make sure that you continue educating yourself in trading strategies, and gain experience in NEO trading along the way.
eToro – Best Broker to Buy NEO
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.
Is it safe to trade NEO?
Yes, as long as you trade through a regulated broker, trading NEO is entirely safe. Platforms such as eToro are licensed to trade in the UK, Cyprus, Australia, and the US as well.
How can I trade Ethereum Classic?
You can trade NEO against other fiat currency or cryptocurrency. The easiest way to do this is to trade NEO through online brokers. For instance, NEO trading is possible on eToro with a minimum deposit of $200.
How can you make money by trading Ethereum Classic?
NEO traders can go for a long-term strategy or a short-term strategy based on the market movements. If your forecast is correct, you make a profit, and if not, you stand to make a loss. It is best to consider your risks and avoid losses by limiting your stake.
Can I trade NEO in the US legally?
NEO trading is legalised in the US. However, you cannot trade NEO CFDs or apply leverage.
Is it possible to trade NEO with Leverage?
NEO leveraging is prohibited in several countries, including the US or UK. As such, you will not be able to trade NEO with leverage through a regulated broker. Trading with unregulated platforms is not advised considering the risk involved.