Looking for an entry point into the exciting world of Spark trading? We'll help you through it.
Spark trading is pretty straightforward once you get the hang of it.
Trading Spark and other digital tokens online is now more popular than ever.
Spark is the native token of the Flare network, a unique ecosystem that has the capability to bridge the gap between blockchain systems. It does this by allowing any digital asset to be used with smart contracts.
The native token of the Flare network, Spark (FLR), has been surging in the crypto markets since the second half of 2021. For many traders, this presents an opportunity to gain exposure to the world of digital assets.
If you are new to cryptocurrencies, our How to Trade Spark Guide has been designed with you in mind. We will cover every aspect of trading this digital asset, the strategies you can use, and how you can set up your account with a regulated broker.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
- What Is Spark Trading?
- How Does Spark Trading Work?
- How to Trade Spark - Setting up Your Trade
- How to Make Money Trading Spark
- How to Trade Spark - Step-by-Step Walkthrough
- How to Trade Spark Guide - The Verdict
What Is Spark (FLR) Trading?
In its most simple form, trading Spark means to speculate on the price of this digital token. This involves you buying or selling FLR coins from a crypto provider, hoping that its value will move as per your predictions.
If it does, you will exit your position and make a profit. Now, since most of this comes down to speculation - you will first need to understand what Spark token is and what factors affect its price.
For those who are completely new to cryptocurrencies, a good place to start would be to read up on the features of the Flare network and its potential future. This will help you obtain a clearer understanding of where this coin is headed.
That said, there is another way to simplify this. Ultimately, like any other tradable asset - the Spark token derives its value from the supply and demand in the market. If there is widespread support for this coin and more people invest in it - you will notice that the price of FLR increases.
On the other hand, if there are more people looking to sell their FLR coins, you will find their value depreciating. When learning how to trade Spark, you will want to closely monitor these market conditions, so you can time your positions accordingly.
Does this sound confusing to you? If so, take a look at the below example to help clear the mist:
- Let's say that you want to trade Spark against US dollars - meaning, you are speculating on the value of FLR coins in USD.
- This trading pair will be displayed as FLR/USD across cryptocurrency platforms.
- As per your market study, you expect the value of Spark to go up by the end of the month.
- So you decide to open a position by placing a $100 buy order on this pair at the price of $1.00 per token.
- In a month, the value of FLR/USD increases by 35%.
- So you decide to exit your Spark position - closing the trade at $1.35 and securing the profit.
In this example trade, you make a profit of $35 on your initial investment of $100 on Spark. This is only because you timed the market correctly, which is particularly crucial when it comes to speculative crypto assets like FLR.
This is primarily due to the volatile nature of cryptocurrencies in general. The value of digital assets like Spark can change within a span of seconds. As such, the price of FLR will keep shifting throughout the day.
For a trader, this means more trading opportunities. However, this price fluctuation can also turn your profits into losses within a matter of seconds. This is why you need to calculate your risks when thinking of how to trade Spark.
Before we get into the complexities of Spark trading, let us explore some of the cryptocurrency fundamentals that you need to be thorough with.
How Does Spark (FLR) Trading Work?
Now that you have got a fair idea of what it means to trade Spark, let us get into the details of how the process works.
To get started, the first step is to get your basics right. Here are some of the most crucial points regarding Spark trading that you should be aware of.
Spark Price Movements
In the cryptocurrency trading space, you will come across the term 'price movement' quite a lot. This is used to describe the change in the value of an asset, in this case - Spark.
As a trader, you are trying to predict the direction of this price movement - whether it would go higher or lower. Based on your speculation, you will then open a Spark position. If you are right, you will make a profit.
When considering this price movement - one key aspect that you need to note is the inherent volatility of cryptocurrencies like Spark. Meaning, the value of this asset can fluctuate drastically in a matter of seconds - turning your entire position upside down in a short period.
Although this enhanced volatility of Spark can result in more trading opportunities, it also means additional risk.
Spark Trading Pairs
Cryptocurrencies like Spark are always traded against another asset - making up a pair.
When thinking of how to trade Spark, one of the first things you need to do is to choose a suitable pair for your skillset.
- If you choose a 'crypto-fiat' pair like FLR/USD - you will be speculating on the price of Spark against US dollars.
- You can also choose to trade a 'crypto-crypto' pair - like FLR/BTC or FLR/ETH. This means you will be speculating on the exchange rate of two digital tokens instead of just one.
As you can see, trading a Spark-crypto pair can be a complex process, even for experienced traders. You will need to understand how the price moves in both markets in order to be able to predict correctly.
On the other hand, speculating on a Spark-fiat pair would be easier - especially if you are new to trading.
Depending on your chosen crypto provider, you will be able to trade FLR/EUR, FLR/GBP, or FLR/AUD. As these currencies offer high liquidity, you will also have access to tighter spreads.
Long or Short-Term Trading
When you are planning how to trade Spark, your strategy should always be defined by a clear objective. You can base this on your profit target, your financial standing, and, more importantly, the duration of your positions.
For instance, if you are thinking in terms of making an investment into Spark - you might want to consider a long-term strategy.
In this method:
- You will want to study the market and the Flare network thoroughly in order to analyze its future potential.
- You will have to take ownership of Spark and hold onto your assets for a longer duration - think in terms of years.
- The upside of this 'buy and hold' strategy is that once you make the investment, you do not have to keep track of every minute price movement.
- Instead, you can set a profit target and wait until the value of Spark hits your goal.
On the other hand, if you do not want to commit to a longer duration, then you can also consider trading Spark with a short-term strategy.
This is where:
- You will be opening and closing Spark trading positions more frequently - within days, minutes, or sometimes, even seconds.
- You will be risking smaller amounts and targeting low-profit levels. At the end of each day, your earnings from multiple trades can add up to a considerable sum.
It is important to note that in a short-term strategy, you will need to set aside a significant amount of time watching the market - because every movement could mean another trading opportunity.
Moreover, to make your Spark trading decisions even more accurate, you will need to go beyond just looking at the market. Instead, you will need to take things to the next level by using tools such as technical indicators.
For this reason, if you are wondering how to trade Spark - it might be in your best interest to choose a long-term strategy initially. With more experience and understanding of the crypto market, you can try your hand at short-term trading when you are ready.
Trade and Own Spark
Owning Spark is best suited for those who want to adopt a 'buy and hold' strategy for the long term. This way, you will be purchasing FLR coins from a credible crypto provider that can give you cost-effective access to this asset.
When considering a cryptocurrency platform for buying Spark, you will need to make sure that the provider is trustworthy, transparent and gives you access to this digital asset without swamping you with fees and charges.
From our experience, eToro is one of the best platforms that has all the right features for a beginner trader. This broker is regulated by several financial authorities and allows you to trade Spark without paying any commission.
Furthermore, when using eToro - you will also have the option of storing your FLR coins within the platform. In other words, there is no need for you to download a private wallet in order to keep safe your Spark tokens.
Like we mentioned earlier, if you do not want to take ownership of Spark for a few years - you can consider day trading this digital asset in the short term. This strategy involves you opening and closing your positions within durations of hours or minutes.
As such, it is not entirely practical for you to buy and own Spark outright. Instead, you can speculate on the price of FLR with a financial instrument called CFDs. These are derivative products that simply track the value of an asset.
For instance, if the price of Spark goes up in the market, so will the value of the CFD and vice versa.
CFDs are highly popular among crypto traders due to the following reasons:
- Using CFDs, you can take a position on the rising and falling prices of Spark by going ‘long' or 'short.'
- CFDs can be traded with leverage, giving you the opportunity to amplify your gains.
For the same reasons, dealing with CFDs also comes with additional risk - especially if you are a beginner that is not fully aware of the consequences of liquidation.
As such, many countries have come up with strong regulations for the usage of this trading instrument. In fact, crypto CFDs are widely banned in the United States and the United Kingdom.
You might still be able to find Spark exchanges that support leveraged trading, but these often lack proper regulation. In other words, using such platforms will only increase your risk - which is why you are better off sticking with only regulated brokers, such as eToro.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
How To Trade Spark (FLR) - Setting Up Your Trade
When you know which pair you want to speculate on and the strategy you wish to use - you are almost ready to get started with your first Spark trade.
But before that, you need to know how you can open and close trades. This is done by placing trading orders on your chosen cryptocurrency platform. Your broker will then carry out these instructions on your behalf.
There are dozens of orders designed to cater to different situations that arise during the cryptocurrency trading process.
Here is the list of few orders that you need to know about, irrespective of whether you are opening a Spark position for the long or short term.
Buy or Sell Order
When considering how to trade Spark, you will first need to decide whether you are going long or short.
- Going long means you expect the value of Spark to rise. In this case, you will open your trade with a buy order so that you can close with a sell order.
- Going short implies that you are predicting that the price of Spark will fall. So, you will use a buy order to open your position and then a sell order to close it.
Both the buy and sell orders are used in conjunction with each other to enter and exit your Spark trades.
Once your broker knows whether you are opening a long or short position, you will then need to clarify how you want to enter the market. That is, do you want to accept the quoted price of Spark or wait for FLR coins to reach a specific value?
This will be determined by your strategy. The two order types available to you in this respect are as follows:
When you place a market order, your broker knows that you want the trade to be executed right away. Meaning, your position will be carried out at the next price available in the market.
The advantage of using a market order is that you can be sure that it will be filled instantly. However, you might end up with a different price than what was initially quoted at the brokerage site.
This is because the crypto markets are fast-paced, and the price of Spark changes from one second to another. However, this variation is likely to be very small and will not alter your profitability from the trade.
If you are using a limit order, this will indicate to your broker that you need to execute your Spark position only at a specified price. This enables you to state the exact value at which you want to buy or sell this digital asset.
Your broker will carry out the trade only when this predefined price level has been reached. If not, the position will remain unfilled - which is why there is no guarantee that your limit order will be executed.
Upon opening your Spark position, you will also need to be clear about when you want to close it and how.
Here are two trading orders you can use to exit the market no matter which direction it takes:
- Take-Profit Order - This is an order where you will specify a certain value above or below your purchase price of FLR coins. When Spark meets your take-profit target, your broker will close your trade.
If the value of Spark does not reach your predefined price, your take-profit order will not be acted on.
- Stop-Loss Order - This order is used to close your Spark position when it goes against your prediction by a certain amount. In other words, you will specify the maximum loss you are willing to take, and if the price of FLR coins reaches that limit, your broker will automatically exit your trade.
Understandably, for a beginner trader, it can be challenging to keep track of the different orders and when to use them.
To give you a clearer picture, below you will find an example:
- Let's suppose that you are taking a long position on the pair FLR/USD.
- According to your broker, the price of this pair is $1.5000.
- You expect the price to go up in the next few hours, so you want to open the trade right away.
- Therefore you place a market order to buy FLR/USD at $1.5000.
- Your broker immediately fills the order, and you receive a price of $1.520 after the slippage.
- You want to secure a 5% profit - so you set a take-profit order at $1.5960 (5% above $1.5200).
- Simultaneously, you want to limit any potential losses from this trade to 1% - thus, you set the stop-loss order at $1.5048 (1% below $1.5200).
Once you open this Spark trade, depending on the market movement - your broker will carry out the respective order. That is, if your prediction is right and the value of FLR coins hit your predefined target, your take-profit will be triggered.
On the other hand, if the market goes against your prediction, your stop-loss order will be carried out by your broker to close your Spark trade.
In summary, you can use a combination of the trading orders we mentioned above to ensure that you secure your profit while limiting your losses - all without having to follow the market yourself.
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 Spark (FLR)
Ultimately, you are learning how to trade Spark in order to make a profit. So it wouldn't harm you to be aware of a few aspects that can boost your earnings while trading this cryptocurrency.
The profit you make from a Spark trade will be determined by how much money you invest in this asset - also called your 'stake.' If you are willing to risk a higher amount on FLR coins, your returns will also be proportional.
However, that does not mean that you should risk all the money you can on Spark or on any other crypto asset for that matter. In fact, the amount you stake should always be calculated - based on how much you can afford to lose, your strategy, and your profit target.
With that being said, it is not uncommon for traders to lose sight of these factors when making decisions. Therefore, when thinking of how to trade Spark - you should have a bankroll management strategy right from the beginning.
This means that you will set a limit on how much you will stake on FLR coins - no matter what the conditions are.
Many traders stick to a 2% rule of thumb by risking only a fraction of their available capital into a single Spark trade. For instance, if you have $10,000 at your disposal, you will open a position worth a maximum of $200.
Spark Trading Leverage
When considering how to trade Spark and maximize your profits, it is impossible to skip the concept of leverage - where you can amplify your stake, and consequently, your gains.
However, it is paramount that you realize that you will also be at risk of suffering from a greater loss.
- For example, let's say your broker allows you to apply leverage to your Spark position.
- You choose to apply leverage of 1:10 on your $100 stake.
- This will bring the total position to $1,000 (10 x $100).
If you make a profit of $50 on this trade, it will also be boosted by 10x. In other words, with leverage - you are able to amplify your returns to $500.
You will essentially be borrowing money from your broker when leveraging. While this might look like an easy way to boost your profits, you shouldn't overlook the fact that your losses will also be magnified.
For this reason, if you are opening a leveraged Spark position, you must ensure that you enter a stop-loss order to mitigate your risk.
Fees to Trade Spark Online
You also need to consider how much your chosen broker will charge you to buy, sell, and subsequently trade Spark.
Here are the common trading fees that your Spark broker is likely to charge:
Spark Trading Commission
Commissions are, perhaps, the most common fee you will come across when trading Spark. This is charged by brokers for facilitating the purchase and sale of this digital asset.
Brokerage commissions are often based on a percentage of the transaction amount.
- If you are buying Spark worth $1,000 - a commission of 1% will cost you $10 in fees.
- If your broker has a commission of 2%, and you are investing $5,000 - this fee will increase to $100 accordingly.
What you need to remember is that commissions are accounted for on every Spark position. That is, you will have to pay this fee not only when you are opening your trade but also when you are closing it.
In addition, depending on your broker, this commission might also be calculated as a flat fee, based on the value of your trade.
Now, a few brokers like eToro allow you to bypass this fee altogether. This is because eToro charges no commission, allowing you to buy and sell Spark in a cost-effective manner.
Commissions are often deemed a direct charge, as it is easy to understand and calculate. However, the spread can be a little confusing since it is considered a hidden fee - calculated as the difference between the buy and sell price of Spark.
When you pay the spread, you need your gains to move beyond the cost of this fee. Only then will you be able to close your Spark trade at a profit.
If not, you will not meet the break-even point and will have to exit your Spark trade at a loss - even if the market moves in favour of you.
Other Spark Trading Fees
Apart from the above, you might also have to pay other fees to the broker to cover its operational costs.
- Deposits and Withdrawals - Every time you add money to the platform or make a withdrawal, you might have to pay a small fee to the brokerage. This can be calculated as a percentage or a flat amount against the transaction amount.
- Overnight Fees - As you can gather, these are charged for leveraged Spark positions that are kept open overnight. On some platforms, you will find it denoted as 'swap fees.'
- Inactivity Fee - If you do not use the trading platform for a while, you might be liable to pay an additional fee to the broker. Typically, this is charged after a period of six months of no activity on the site.
The fee structure of your chosen broker might seem complicated at first glance. But it is crucial that you take your time to read through everything and make sure that you are aware of all the charges involved.
This is especially important because many fees that might seem negligible can easily add up and eat into your profit, especially when you are trading Spark regularly.
How To Trade Spark (FLR) - Step-by-Step Walkthrough
If you have read our How to Trade Spark Guide this far - you are now equipped with knowledge of the fundamentals.
Before we end this guide, we will also walk you through the step-by-step process of how you can set up your first Spark trade.
Step 1: Choose a Spark Trading Site
The best crypto brokers in this market will ensure you have a positive Spark trading experience. However, the sheer number of options out there can be overwhelming for any new trader.
As important as it is to select the right crypto platform for your trades, making the decision can be a daunting process, especially if you do not know what to look for.
So here, we have prepared an easy-to-follow checklist so you can compare and contrast crypto brokerages for your Spark trading journey.
- Regulation: Being regulated will ensure that the broker is transparent and has your best interest at heart. As such, make sure that your trading platform is regulated by at least one reputable financial authority - like the FCA, CySEC, ASIC, or SEC.
- Fees: Find out what trading fees are involved and how they are calculated.
- Payments: Confirm whether the broker accepts your preferred payment method, and if not, what other options are supported.
- Minimum Deposits: Check whether you need to put up a certain amount in order to start trading Spark.
- Spark Pairs: What are the Spark trading pairs supported by the platform?
- Trading Platform: How easy is it for a complete beginner to place trades on the brokerage site?
- Mobile Application: Do you have access to a mobile app through which you can place trades?
Comparing these aspects will give you a clear idea about what the brokerage is offering and whether it is worth your consideration.
If you want to save some time, you can start by visiting the trading platform eToro. As discussed earlier, there are a few factors that set this brokerage apart from others - such as:
- eToro is heavily regulated in multiple countries. This includes the FCA, CySEC, and ASIC in the UK, Cyprus, and Australia respectively. The platform is also registered with FINRA that caters to the protection of US residents.
- eToro supports thousands of tradable assets, including hundreds of cryptocurrencies like Spark. So, if you want to try trading stocks or commodities, you will not have to look elsewhere.
- eToro allows you to trade Spark at 0% commission and gives you the option to store your FLR coins within the platform.
Moreover, you will also be able to open and close Spark trades right from the eToro mobile app. All in all, this online broker has got everything you are looking for in a beginner-friendly trading platform.
With this in mind, let us see how you can set up your Spark trading account with eToro and get started with your first trade.
Step 2: Open a Spark Trading Account
On eToro, opening your trading account is as easy as registering on any other online platform. You can start by providing your email address and creating a strong password.
You can then proceed to fill in your personal information - think along the lines of your full name, home address, and contact details.
Since eToro is regulated, you will also have to complete a KYC process. Meaning, you will have to submit a copy of your passport/national ID card, or driver's license, along with a utility bill to verify your home address.
Step 3: Add Funds
Once you have been verified by eToro, you can then proceed to fund your trading account. The minimum deposit required is $200 ($50 for US clients), and you can choose to pay via a bank transfer, debit/credit card, or an e-wallet like PayPal, Neteller, or Skrill.
Step 4: Choose a Spark Trading Market
Upon funding your account, you can search for your Spark trading pair on eToro. For instance, if you want to trade this digital token against US dollars, simply search for FLR/USD on the platform.
Step 5: Place Spark Trade
On the Spark trading page, you can choose the respective orders as we discussed earlier in our guide. To recap - you will choose between a buy/sell order, market/limit order, and set your take-profit and stop-loss limits.
You can then enter your stake before confirming the order. eToro will then automatically open and close your Spark position as per your instructions.
How To Trade Spark (FLR) Guide - The Verdict
For those who are thinking about how to trade Spark, our guide has given a complete and comprehensive idea of every step involved. To sum up - you will need to gain an understanding of cryptocurrency price movements and come up with a strategy.
When you are ready, you can create your account with a regulated broker like eToro that gives you commission-free access to digital assets. Not only that, if you want to HODL your FLR coins, this trading site will even allow you to store your tokens within the platform for free.
That being said, before you start your Spark trading journey, make sure that you are aware of the risk involved so that you can make informed decisions.
eToro – Best Exchange To Trade Spark (FLR)
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
How To Trade Spark FAQs
Which is the safest way to trade Spark?
It is always best to choose a regulated broker like eToro when trading a volatile cryptocurrency such as Spark.
How much should I risk on Spark?
Your stake when trading Spark should be decided by your financial standing and appetite for risk.
How can I buy Spark?
Regulated brokers like eToro are considered the easiest and most secure platforms to buy Spark. This trading site can store your FLR coins for free and offers a 0% commission on cryptocurrency purchases.
Can I apply leverage on Spark?
Yes, depending on your location, you will be able to find platforms that give you access to leveraged Spark CFDs. However, it is best to stick wth regulated brokers.
What is the minimum amount required to start trading Spark?
The minimum trading amount will be set by your chosen brokerage. On eToro, all you need is $25 to gain access to Spark.