How to Trade Safemoon: A Step-by-Step Guide
Comprehensive Guide to Trading Safemoon in 2021
Looking for an entry point into the exciting world of Safemoon trading? We'll help you through it.
Safemoon trading is pretty straightforward once you get the hang of it.
Safemoon is one of the latest DeFi tokens to hit the cryptocurrency markets. And as with any new digital token, it has managed to grab the attention of traders looking for that next big thing.
At the time of writing, in June 2021 - this coin is valued at $0.000004302. This micro-price qualification means that you can get your hands on a million Safemoon tokens with just a few dollars.
If you are keen to access this trending digital asset, our How to Trade Safemoon Guide will steer in the right direction. We will discuss what this cryptocurrency is all about and how you can find a suitable online broker to start trading Safemoon today!
- What is Safemoon Trading?
- How Does Safemoon Trading Work?
- How to Trade Safemoon Online - Setting up a Trade
- How to Make Money Trading Safemoon
- How to Trade Safemoon 2021 - Step-by-Step Walkthrough
- How to Trade Safemoon Guide - The Verdict
Trading Safemoon digital currency is no easy feat - which is why we have put together an in-depth guide on How to Trade Safemoon. 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 Safemoon today.
How to Trade Safemoon in 5 Steps
To trade Safemoon, the first step is to open an accout with a regulated exchange, depost funds, select Safemoon from the platform list, and lastly Buy SAFEMOON (go Long) or sell SAFEMOON (go short).
Step 1: Open an account with a regulated exchange
Step 2: Funds your account
Step 3: Choose how much SAFEMOON you want to trade
Step 4: Buy SAFEMOON (go long) or sell SAFEMOON (go short)
Step 5: Confirm the trade
What is Safemoon Trading?
Launched in March 2021, Safemoon is one of the latest additions to the ever-growing list of DeFi tokens currently circulating the cryptocurrency market. The coin had an original supply of one quadrillion tokens. However, developers have since burned 223 million coins - leaving a supply of 777 trillion for launch.
Safemoon has been designed to reward its holders. If you sell this coin, you will end up paying a 10% fee. Half of this will be distributed among existing holders, and the rest will further split equally into Binance coins and Safemoon tokens - which will further add to liquidity levels.
However, when you trade cryptocurrencies like Safemoon, you might also have the option to use Contracts for Differences (CFDs) - so that you do not have to own these coins directly.
This way, in order to profit from this asset, you will not have to sell the coins or worry about the aforementioned 10% fee. To give you a clearer idea, we will be explaining more about this in the later sections of our How to Trade Safemoon Guide.
To come back to the basics of Safemoon - when trading this digital asset, you will be trying to capitalize on its price movements. Being a cryptocurrency, the value of the coin shifts multiple times throughout the day and often, even by the second.
As a trader, your objective is to predict this future price movement. If the value of Safemoon shifts according to your speculation, you will make a profit from the trade.
That said, in order to make informed trading decisions, you should also be aware of the factors that influence the price of Safemoon. Although it varies from one cryptocurrency to another, this ultimately adds up to the supply and demand of the token in the wider market.
That is, if more traders and investors are buying this coin, then its price will go up. On the contrary, if more traders want to sell this asset, then the value of the token will drop.
Below is an example that can explain this better:
- Let's suppose that Safemoon coin is currently priced at $0.000004200.
- This will be represented as SAFEMOON/USD on trading platforms.
- Now, after studying the market - you speculate that the price of the token will rise in the next few days.
- Based on your prediction - you place a buy order of $5,000 on Safemoon.
- As you predicted, the price of the coin increases to $0.000005000.
- This shows an increase of nearly 20% in the price of Safemoon.
- To close the trade, you sell your Safemoon coins and make a profit in the process.
On your $5,000 stake, your profit from this trade adds up to $1,000.
As you can understand from this example, if you are able to time the market and make correct speculations, you stand to make high profits from your Safemoon trades.
How Does Safemoon Trading Work?
Cryptocurrencies have been around for just over a decade. In this short time span, this financial instrument has become one of the top-performing assets. Although it is relatively new, the concept of trading these digital coins is the same as that of any other marketplace.
As such, if you have already traded any other asset before, you will have no difficulty getting a grasp of how to trade Safemoon. On the other hand, if you are completely new to the world of trading crypto - then you should invest some time to familiarize yourself with the fundamentals.
In this section of our How to Trade Safemoon Guide, we will start with some of the basic strategies that you will find useful when trading this digital coin.
Safemoon Trading Price Movements
As we mentioned earlier, the price movement of Safecoin comes down to the supply and demand of the market. In simple terms, if more traders are interested in buying this coin - its value will increase.
On the contrary, when more traders are looking to cash out their holdings, the price of the coin will drop.
That said, in the case of any asset, there will be several other factors that determine its price.
For instance, in the case of Safemoon, the coin is designed to encourage ‘HODLing’. In order to drive up its price, the developers of the token will also manually burn the tokens regularly.
When this happens, there could be a lot of demand for the asset, which will be reflected in its value. However, apart from its limited supply, there is no other utility to this token.
This might lower interest from traders eventually - which will ultimately lead to falling prices. Predicting these trends can help you devise your own trading strategy and place orders accordingly.
While on that point - when you are looking at how to trade Safemoon, you are likely to notice that prices are slightly different across exchanges. This is common for cryptocurrencies, primarily because of their volatility.
Not to worry, this small difference will not impact your ability to make profitable trades.
Safemoon Trading Pairs
When you have understood what affects the price movement of Safemoon, it is time to think about how you want to trade this coin.
For those unaware, cryptocurrencies are typically traded in pairs. You can choose between a crypto-fiat pair or a crypto-crypto pair based on your strategy.
Let us look at the case of a crypto-crypto pair first. When using this pair - you will be trading Safemoon against another cryptocurrency. For instance, you might come across pairs such as SAFEMOON/BTC or SAFEMOON/ETH.
However, it might be a bit tricky for a beginner to trade Safemoon against other cryptocurrencies. This is because you will have to speculate on the future price of not one but two digital assets.
As you can imagine, this can be an incredibly challenging undertaking if you are new to the crypto markets.
On the other hand, if you choose a crypto-fiat pair, it might be easier for you to predict the exchange rate. In this case, you will be trading Safemoon against the likes of the US dollar or British pound.
You will even find online platforms that give you access to crypto-fiat pairs, such as SAFEMOON/CAD (Canadian dollar) or SAFEMOON/JPY (Japanese yen).
However, it is always best to stick to high liquidity fiat currencies like the USD, which will also offer you tighter spreads.
Long or Short-Term Trading
When thinking of how to trade Safemoon, another crucial factor to consider is the duration of your position. That is to say, whether you want to hold the coin for the long-term or the short-term.
If you choose a long-term method, you will be purchasing Safemoon coins and holding them in a crypto wallet. The underlying strategy behind this is investment mindset is that you will be able to generate returns from the price appreciation of the token.
In other words, you are predicting that the value of Safemoon will increase over the course of time. Based on the market, you might find yourself holding Safemoon for months or even years at a time.
If and when it rises in value, you will cash out your holdings and make a profit.
As we mentioned earlier, Safemoon is ideal for such a method as it is designed to encourage staking. Moreover, when adopting a long-term strategy, there will be no need for you to follow the price movements of the token throughout the day.
That said, the majority of seasoned traders might prefer a short-term strategy. In this method, you will be speculating on the short-term price shifts of Safemoon.
And as you know by now - this cryptocurrency is extremely volatile, allowing you to profit from the price changes that happen even within the course of the day.
In fact, in short-term strategies such as 'day trading' or 'swing trading,' traders will place dozens of positions a day - but targeting modest profits. The goal here is to end the day in profit.
That said, this strategy requires you to take swift action based on the quick price changes in the market. Such an approach is best carried out with the help of technical indicators and market analysis.
This is why many beginner traders choose to try a long-term strategy when trading Safemoon for the first time.
Trade and own Safemoon
For those who want to try a long-term strategy, the first question that comes to mind is how to buy Safemoon. Today, there are hundreds of cryptocurrency platforms that can give you access to digital assets, such as Safemoon.
However, you should be aware that there are both regulated and unregulated platforms among them.
It is always suggested that you choose the services only of a regulated broker as opposed to an unregulated cryptocurrency exchange - so that both your trading funds and digital assets will be protected at all times.
In the first section of this How to Trade Safemoon Guide, we briefly touched upon the topic of CFDs. Familiarizing yourself with this financial instrument can be beneficial for traders - especially if you want to pursue a short-term trading strategy.
To give you a quick overview, Contracts for Differences or CFDs are derivatives that track the value of an asset. That is, a Safemoon CFD will reflect the market price of the coin. If the price of Safemoon is to rise, so will that of its CFD, and vice versa.
Moreover, as we mentioned earlier, when trading Safemoon CFDs, you will not actually own any of the coins. Instead, you will be merely speculating on the value of the digital asset.
This unique characteristic of CFDs will allow you to capitalize on both the bullish and bearish sentiment of the coin.
Additionally, CFD trading also gives you the option to trade with leverage.
However, crypto CFDs are generally considered a riskier approach to trading. For the same reason, this financial instrument is banned in many countries such as the US and Hong Kong.
If you are not allowed to access crypto CFDs where you live, you might be able to find platforms offering leveraged digital assets. However, it is likely that these platforms are unregulated, and as such, are best avoided.
How to Trade Safemoon Online - Setting up a Trade
Now that we have covered the basics of Safemoon let us consider how you can actually place a trade. In order to do that, you need to learn about trading orders.
Below are some of the most useful orders you will need to know about.
Buy or Sell Order
These two orders are the most fundamental of all Safemoon trades.
In a nutshell:
- If you predict that the price of Safemoon is about to increase - then you will be using a buy order.
- If you think that the value of Safemoon is about to drop - you will choose a sell order.
Regardless of which of these orders you use to open a position, you will have to use the other one to close it.
For instance, if you are entering the market with a buy order, then you have to issue a sell order to exit your position and vice versa.
While buy and sell orders are enough to open and close your Safemoon positions, these might not be sufficient for all your trades. Subject to your trading strategy, you might find yourself using one of the following orders.
- Market Order - A 'market order' is best used when you are looking to trade Safemoon at the current available price. This indicates to the broker that you want to execute the order immediately.
That said, since cryptocurrencies are highly volatile - you might notice a small difference in the price after the order is carried out.
- Limit Order: A 'limit order' is preferred by traders who want to enter the market at a precise price.
For instance, if Safemoon is currently valued at $0.0000045, you can set a limit order at $0.0000050. This will tell your broker that you need the trade executed only when the price of Safemoon reaches the price level you indicated.
When you have opened your Safemoon position, it is only natural to think of how you want to exit the market.
- You can use a 'take-profit' order to instruct your broker that you want to close the trade when a certain profit target has been achieved.
- You can use a 'stop-loss' order to indicate to your broker that you want to close the trade if your losses hit a predefined level.
Now, as you can see, no matter whether your trade turns out to be profitable or at a loss - your respective orders will be activated. This erases the need for you to watch over your Safemoon trade all the time in order to take swift action based on current price action.
In order to provide you with a better understanding of trading orders, we have prepared an example Safemoon trade for you here:
- Let us suppose that you want to trade SAFEMOON/USD.
- The current exchange rate of the pair is $0.000004500.
- Predicting that the price is about to go up - you set up a buy order.
- Your goal is to make a profit of 5% on this trade.
- Consequently, your take-profit order is set at $.0.000004725.
- In terms of your risk tolerance, you want to limit your losses to 2%.
- As such, you set up a stop-loss order at $0.000004410.
In this example, you have two possible outcomes.
- If the price of Safemoon increases to $.0.000004725, your take-profit order will be executed, and you will collect a profit of 5%
- If the price of Safemoon falls to $0.000004410, your stop-loss order will be carried out instead.
As you can see, these trading orders not only allow you to place trades but also give you more control over your positions.
Check Out: Is It Worth Investing in Safemoon?
How to Make Money Trading Safemoon
The amount of profit you make from a Safemoon trade is dependent on several factors. One is the trading strategy we discussed earlier.
As important as it is, how much money you will actually make by trading Safemoon will be based on the following aspects of your trade.
When Safemoon trading, your stake is the amount of money you risk on the position. If you are able to put up more money, the better your potential profits will be.
However, you cannot blindly decide on a stake amount based on this concept. You will need to carefully consider your risk tolerance and choose an optimal sum that you can afford to lose.
In order to effectively manage stakes, traders often resort to a bankroll management strategy. Many professionals stick to a 2% rule - meaning that they will never stake more than 2% of their available trading balance on a single Safemoon trade.
This will help to keep the risks in check at all times.
Safemoon Trading Leverage
We have briefly mentioned leverage when discussing the benefits of trading Safemoon CFDs. Leveraging your trades can help you amplify your gains exponentially.
Let us clarify this better with an example:
- Let's say that you want to place a buy order on SAFEMOON/USD.
- You are ready to stake $5,000 on this trade.
- You also decide to apply leverage of 1:10.
- In two hours, the value of the SAFEMOON/USD pair rises by 5%.
- Without any leverage, your profit from this trade is $250.
- Given that you applied leverage of 1:10, you have instead made a profit of $2,500 on this trade.
However, such high leverage can also invite additional risk for your Safemoon trades. As such, if you are able to access crypto CFDs legally where you live, it is best to proceed with caution when applying leverage.
Fees to Trade Safemoon Online
Regardless of which online broker you choose, you will always have to pay a set of trading fees. This is a crucial factor that can ultimately determine how much profit you can keep for yourself.
Make a note of the following Safemoon trading fees you might end up paying to your online broker.
Safemoon Trading Commission
Commissions are the most common type of fees involved in trading cryptocurrencies such as Safemoon. How much you will have to pay will be calculated as a percentage of the stake you put up on the digital asset.
Most brokers will have a variable commission rate, which will always differ from one platform to another.
However, you will also find online brokers that allow you to access Safemoon without having to pay any trading commission at all. If you are able to find these, then you only have to be concerned about the spread - which we will discuss next.
Spreads in the context of cryptocurrency trading is the difference between the buy and ask price of the digital asset - in this case, Safemoon. As you can imagine, the wider this gap, the more fees you will end up paying.
Therefore, you will benefit the most from brokers that offer tight spreads.
Crucially, you should be aware that you will always have to account for the spread when calculating your profits. For instance, if your chosen broker charges 1% via the spread - this means that you will be opening a trade at 0.6% in the red.
Put otherwise, your profits have to be more than 0.6% so that you can keep the rest to yourself after paying the broker.
Other Safemoon Trading Fees
Apart from the aforementioned trading fees, you should also look into any other administrative charges you might be liable for.
- Deposits / Withdrawals: A majority of crypto brokerage platforms impose a transactional fee to process your deposits and withdrawals.
- Inactivity Fee: If you do not meet the minimum trading activity required by your chosen brokerage platform, you might also have to pay an 'inactivity fee' - which will be deducted directly from your account.
- Overnight Fee: It is also common for brokers to charge you an 'overnight fee' or a 'swap fee' for leveraged trading positions you keep open overnight.
Overall, the key takeaway here is that the fees charged by your chosen online broker can define your profits from each trade. As such, this is a crucial aspect to analyze when choosing your crypto provider to trade Safemoon.
Read More: Can Cryptocurrency Trading Make You Rich?
How to Trade Safemoon 2021 - Step-by-Step Walkthrough
We have come to the last part of our How to Trade Safemoon Guide.
In this section, we will give you a walkthrough of how you can set up your online brokerage account to start trading Safemoon today!
Step 1: Choose Your Safemoon Trading Broker
We have mentioned throughout the guide how important it is to choose the right online broker for your Safemoon trades. However, with the plethora of options available - it can be a demanding task for beginners.
To get started, you can consider the following factors when looking for an online broker:
- Regulation: Does your chosen broker hold any valid licenses from financial regulatory authorities?
- Fees: What fees - both trading and non-trading, are you liable to pay?
- Payment Methods: Which payment methods are accepted on the platform?
- Minimum Deposit Policy: Is there any minimum deposit set for trading Safemoon?
- Safemoon Pairs: How many Safemoon trading pairs are available on the platform?
- Trading Platform: Is the platform user-friendly with easily accessible tools?
- Mobile App: Is there a mobile trading app available to download?
Evaluating an online crypto broker based on these considerations will help you pick a platform that best fits your Safemoon trading needs.
Step 2: Open a Safemoon Trading Account
When you know which online broker you want to use, you can head over to the respective platform to create an account.
If you are choosing a regulated platform (which you should), when setting up your account you will also be required to verify your identity. This only means that you will have to provide a copy of your government-issued ID, such as a passport or driving license.
Step 3: Deposit Funds
Once your account is verified, you can start depositing funds into your account. This can be done using one of the payment methods accepted on the platform.
If you use a debit/credit card or an e-wallet such as PayPal, you will be able to process the payment right away. On the other hand, if you choose a wire transfer, you might have to wait for a few business days for the money to arrive.
Step 4: Choose Safemoon Trading Market
When your account is ready to use, you can look for Safemoon from the list of supported cryptocurrencies. Alternatively, you can also find the Safemoon trading page by entering SAFEMOON into the search box.
Step 5: Place Safemoon Trade
At this stage, all that is left to do is to set up your trading orders.
Depending on your trading strategy, you can use the orders from the ones we have discussed earlier. When you are ready - you can confirm your choices to execute your first Safemoon trade.
How to Trade Safemoon Guide - The Verdict
This guide has given you a comprehensive idea of how to trade Safemoon.
To sum up, before you decide to trade this digital asset, you should always do your due diligence and learn about the cryptocurrency markets. When you have made up your mind, you can decide between a long-term or short-term strategy based on your financial goals.
And most importantly, when you are ready to trade Safemoon - make sure that you do so only through a regulated crypto broker - to ensure the safety of your capital as well as your digital assets.
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How to safely trade Safemoon?
The most convenient and safest way to trade Safemoon is through a regulated crypto broker.
How can I start trading Safemoon?
If you are looking to start trading Safemoon right now, you will first have to find a regulated crypto broker that supports this digital currency. Once you do, you can proceed to create an account, deposit funds and set up a trade.
Is it a good time to trade Safemoon?
Safemoon is one of the newest digital tokens to enter the crypto market. As such, it is too early to speculate on its future potential. If you want to trade Safemoon, it is recommended that you do your homework and learn about this asset before risking capital.
Are Safemoon CFDs legally accessible in the US?
No, you are not permitted to trade cryptocurrency CFDs legally in the US. However, you might be able to find unregulated crypto exchanges - which are best avoided due to the risks involved.
Can I apply leverage on Safemoon trades?
You can. However, whether you can access leverage or not will be based on where you live. For instance, in the US and UK, leverage on crypto CFDs are prohibited.