How to Trade TRON 2021
Since its launch in 2017, TRON (TRX) has solidified itself as a promising venture in the cryptocurrency space. The project has received endorsements from several high-profile entities in China - meaning that the upside potential could be huge.
2020 has been notable for TRON, with its dApp transaction volume exceeding even that of Ethereum. With this in mind, you might be wondering how to trade TRON from the comfort of your home.
This guide will show you everything there is to know about TRON trading - from how to assess the market, placing orders, and coming up with a sensible risk-management strategy.
What is TRON Trading?
TRONix, popularly known as TRON (TRX), is the official digital currency of the TRON network. You can trade TRON coins yourself through hundreds of online platforms, either by exchanging it for a fiat currency, or another cryptocurrency.
TRON's value, much like any other financial asset, changes with market sentiment. Ultimately, it boils down to the supply and demand of the digital currency in question. As such, the first step towards trading TRON is to figure out how the crypto-market works.
Put simply, if the demand for TRON is on the rise, you can expect its price to increase. In contrast, lower demand for TRON will result in a decreased price.
The answer to how to trade TRON successfully therefore lies in being able to predict market sentiment accurately. By making the right prediction, you will turn a profit on your TRON trade.
Let us give you a quick example on how to trade TRON:
- Let’s suppose that in January, the price of TRON is $0.02.
- The cryptocurrency pair is denoted as TRX/USD.
- You believe that TRON's price is due to rise in the coming months and place a $500 buy order.
- By March, the value of TRON stands at $0.03.
- This depicts an increase of 50% in value.
- Happy with your profits, you choose to exit your TRON trading position.
In this example, TRON increased by 50% in value. On your $500 stake, this amounts to a total profit of $500.
Then again, if the price of TRON had decreased below $0.02, you would have been left with a financial loss.
This brings us to the fundamental requirement of making a profit when trading TRON - predicting the market correctly.
How Does TRON Trading Work?
Although a relatively new asset class, the concept of how to trade TRON has a close resemblance to other financial instruments, such as stocks or forex.
As such, those who are already familiar with conventional trading vehicles will have no difficulty in understanding how to trade TRON.
If you are new to cryptocurrency trading, here are some fundamentals that you need to know about.
TRON Trading Price Movements
The cryptocurrency market is famously volatile, making it paramount that you know what can shift the market. Anything from breaking news, government regulation, or technology developments can drive the price of TRON up or down.
If more traders are interested in investing in TRON, this will lead to rising demand, and consequently, a bullish market. If investors lose their confidence in TRON, they will be keen to sell the asset, thus diminishing its value.
At this point, it is worth mentioning that you will see TRON valued at slightly different prices across various trading platforms.
For example, one platform might quote TRON at $0.023 while on another, you might see it at $0.024. This will only be a minuscule difference and will not affect your ability to make a profit.
TRON Trading Pairs
There are two routes to trading TRON:
- Against fiat currencies such as the US dollar, or the Euro
- Against another cryptocurrency like Bitcoin or Ethereum
Trading TRON against another cryptocurrency requires you to have a firm understanding of both digital coins that make up the pair. As all cryptocurrencies are volatile, it can be complex to correctly predict the market, even for experienced traders.
For this reason, newbies tend to trade cryptocurrencies against fiat, in this case, TRON against fiat.
The most commonly used fiat currency in the crypto trading arena is the US dollar. When you see the pair TRX/USD, it means you are trading the price of TRON against USD.
Crypto-to-fiat pairs are easier to speculate on and will afford you tighter spreads and higher liquidity levels. If interested, you will also be able to find TRON pairs that contain other popular fiat currencies such as the Euro (TRX/EUR), Australian dollar (TRX/AUD), British pound (TRX/GBP), and the Japanese yen (TRX/JPY).
Whether you choose to trade the TRX-fiat pair, or the TRX-crypto pair will ultimately depend on your understanding of the cryptocurrency market, and how confident you are in predicting its movements.
Long or Short-Term Trading
In many ways, trading a cryptocurrency such as TRON can easily be compared to any other financial market. For example, you can choose a long-term or a short-term strategy, based on your trading goals.
One way is to invest in TRON directly. You will be buying TRON coins from a broker and storing them within a cryptocurrency wallet.
When the time is right, you can sell your TRON coins in return for fiat currency. Sometimes, traders hold on to their cryptocurrencies for months, or even years at a time.
The advantage of this long-term TRON trading strategy is that you do not have to trouble yourself with short-term market volatility. Instead, you will "buy and hold", allowing the market to play out, and taking action only when the time is right.
In contrast, a short-term strategy will require your constant attention on TRON's market movement.
You will often find yourself placing several trades throughout the day, hoping to make smaller profits regularly. In the world TRON trading, this requires in-depth technical analysis, making it challenging for trading newbies.
Trade and Own TRON
Whether you opt for long-term or short-term trading, we always recommend that you do so through a regulated and reputable online broker.
eToro is a great option in this respect - as the platform allows you to trade TRON in a 100% commission-free environment.
Furthermore, eToro is regulated by several financial bodies - ensuring that you can trade and own TRON in a safe and secure manner. There are no fees for keeping TRON in your eToro wallet, which is ideal for a long-term buy and hold strategy.
While some traders prefer to take a long-term approach, others choose to benefit from ever-changing price fluctuations.
This usually comes in the form of 'day trading' or 'swing trading'. If this is a TRON trading strategy that you are thinking about taking, CFDs (Contracts-for-Differences) are worth well considering.
A CFD does not give you ownership of TRON, but it mirrors its value like-for-like. For instance, if TRON's current market price is $0.021, the CFD in question will also be valued at $0.021. If the price of TRON rises to $0.023, so will the value of CFD.
CFDs come with several advantages, making it popular among TRON traders:
- TRON CFDs can be traded with competitive fees and tight spreads.
- You can go long and short on TRON CFDs, meaning you can profit from both rising and falling prices.
- Most online brokers offer leverage on CFDs.
Although leverage makes it possible for you to boost your trading capital, CFDs are prohibited in many countries.
In particular, residents of the US will not be able to trade TRON CFDs via a regulated broker. In the UK, CFD trading is available, but not on cryptocurrency assets.
That said, you will still be able to find unregulated crypto-exchanges that offer you leverage. But, we would advise against using a platform that isn’t licensed as you will be putting your capital at risk.
In addition, it is worth noting that unregulated trading platforms require you to trade TRON against ‘USDT’ as opposed to real US dollars. This means that you will be trading TRON against Tether - a cryptocurrency with its value pegged to the USD.
Would You Consider Investing In TRON?
How to Trade TRON Online - Setting up a Trade
As noted earlier, TRON draws many similarities to that of a traditional financial asset. Nevertheless, before you dive in, it is essential that you know how the digital currency works.
Most importantly, you need to familiarise yourself with different types of TRON trading orders.
An order is how you instruct your broker to buy or sell TRON. In other words, after analysing the market, you place an order with your broker, and they execute it for you. After all, whether or not you make a profit is up to the market.
Below are the most important orders that you will use while trading TRON online.
Buy or Sell Order
Buy and sell orders are required when you open and close your position.
- Place a buy order when you think the price will rise and you want to go long on TRON.
- Place a sell order when you think the price will fall and you want to go short on TRON.
Each trade that you open will require you to first place a buy or sell order with your broker. If you open your position with a buy order, you will close it with a sell order.
On the flip side, when you open with a sell order, you will close it with a buy order.
In a volatile market, you need your entry orders to be as precise as possible. While buy and sell orders are fundamental to access the TRON marketplace, there are other order types that give you more control over your trade.
For instance, TRON's price might change between the time you place the order and when the broker executes it. That is why you need to choose from a 'Market Order' or a 'Limit Order' when trading TRON online
- Market Order: This ensures that your order is filled as soon as possible at the best market price. Therefore, the broker will execute your trade immediately. You might get a price just above or below what you see on-screen - due to second-by-second price fluctuations.
- Limit Order: A limit order enables you to enter the market at a particular price, and gives you more control. Say TRON is valued at $0.025, and you want to place a buy order only when the price hits $0.026. This is where a limit order comes in. Crucially, your broker will execute your limit order when TRON hits your entry price of $0.026.
Similar to how you enter the market, you can also be specific about how and when you exit your TRON trade. This is called an exit strategy and is commonly carried out through 'take-profit' and 'stop-loss' orders.
Here is an overview of how each order functions.
- Take-Profit: As the name suggests, a take-profit order tells your broker how much you want to make in gains before closing the trade. For example, say you are looking to make a 2% profit on your TRON trade. You can place a take-profit order at 2% above or below the current value depending on whether you are going long or short. Therefore, your position will be closed when the 2% profit level has been achieved.
- Stop-Loss: On the contrary, stop-loss orders limit your losses if the market goes against your prediction. If you set the stop-loss at 2%, your TRON trade will be closed if it goes in the red by 2%.
Let us illustrate this with an example:
- You place a buy limit order to enter the TRON market at $0.0250.
- You want to lock your gains at 2%, so you place a take-profit order at $0.0255.
- At the same time, you don't want to lose more than 1%.
- Hence, you place a stop-loss order at $0.0247.
Now, the trade can go one of two ways.
- If the price of TRON increases to $0.0255, your take-profit order will kick-in, and you will close the trade at 2% profit.
- If the price of TRON decreases to $0.0247, your stop-loss order will kick in, and you will close the trade at a loss of 1%.
In essence, whichever direction the market moves, the broker will activate the respective stop-loss or take-profit order based on your pre-defined price point.
How to Make Money Trading TRON
Orders can make the process of trading more efficient. That said, ‘when’ you enter and exit the market are not the only factors that will determine whether or not you make money trading TRON.
When contemplating how to trade TRON, you also need to think about how much risk you are taking against that of your potential profits.
Your stake represents how much capital you are risking on a specific TRON trade. Naturally, the higher your stake, the higher your potential profits and losses.
Say you want to stake $1,000 worth of TRON, and make a profit of 2%. Your earnings from this trade would amount to $20. If you had doubled your stake to $2,000, you would have made $40 instead.
The math is simple, but when you are staking large amounts, it can also result in you taking too much risk. That is why many TRON traders opt for a 'bankroll management strategy'. This ensures that there is sufficient money in your trading account over the course of time.
For instance, traders often decide to stake only a certain percentage of their trading funds. Limiting your stake to 2% is a good rule of thumb to follow. In practice, if you have capital worth $1,000, you will only risk a maximum of $20 on each TRON trade.
Having a bankroll management strategy is particularly crucial when engaging in short-term trading and placing multiple orders in a short period of time.
Fortunately, there are many online platforms that allow you to trade TRON with small stakes. eToro, for example, requires a minimum order of just $25 - which is perfect for bankroll management.
TRON Trading Leverage
Leveraged TRON CFDs is a subject we touched upon earlier. As is obvious, leverage comes with its risks and benefits.
As such, if your location permits you to trade TRON CFDs, you need to know a few important aspects before taking the plunge.
Let us show you how leverage works:
- You place a sell order on TRX/USD at $1,000
- You decide to apply leverage of 1:2, meaning your stake is effectively $2,000
- If you make a profit of 10%, your gains would have ordinarily amounted to $100
- With leverage of 1:2, your earnings are amplified to $200
It is also possible to obtain leverage from unlicensed cryptocurrency platforms. However, you won’t have the safety net of a reputable financial regulator - so this is best avoided.
Fees to Trade TRON Online
Brokers indeed make the process of trading easier. However, you shouldn't look past the fact that they are ultimately a business, so you need to find the best one to suit your needs.
Online brokers charge you for their service through fees and commissions. The potential fees on your trade will vary from one platform to another. Therefore, it is imperative that you are aware of what you are paying before you register with a broker.
Below is a list of the most common types of fees you will come across at TRON trading platforms.
TRON Trading Commission
The commission charged by brokers is not a new concept, and it works the same as any other trading sector. Put simply, online brokers charge you a commission in percentage terms for every trade you place with them.
This commission is charged per trade, meaning you pay it on both entry and exit orders. So if there is a commission of 1%, you will pay 1% of your stake when you open a position and again when you close it.
With that said, regulated broker eToro allows you to trade TRON on a commission-free basis.
The ‘Spread’ in trading is defined as the difference between the asset's ask price and bid price. Spreads also tend to vary depending on market conditions.
You will want to find a broker that offers 'tight spreads' as this is an indirect fee that cannot be avoided.
For example, if your broker charges a spread of 1.5% on TRX/USD, you need to make a minimum of 1.5% just to break even. Anything over this 1.5% spread will amount to your actual profit.
Other TRON Trading Fees
Online brokers can also charge an assortment of administration fees when trading TRON.
This might include the following:
- Deposit/ Withdrawal Fees: You can consider this as a transaction fee that occurs when you deposit or withdraw money into or out of your trading account. While popular crypto-trading platform Coinbase charges 3.99% to deposit with a debit card, this will cost you just 0.5% at eToro - and only when you fund your account in a currency other than USD.
- Inactivity Fee: Inactivity fee occurs if your trading account is marked as dormant. After a certain period of inactivity, brokers will charge you a fee every month. You will either have to start trading or withdraw your balance to avoid this fee.
- Overnight Fees: You can look at overnight fees as an interest you pay to the broker in order to keep your trading position open overnight. This is common in CFD trading, and some brokers will address this as a 'swap-fee'.
The fee structure is a key factor in deciding the right online broker for your TRON trading needs. After all, these fees can quickly add up and eat away your trading profits.
How to Trade TRON 2021 - A Step-by-Step Walkthrough
If you’re wondering how to trade TRON online right now, we are going to walk you through the set-up process.
Step 1: Choose a TRON Trading Site
As we have emphasised several times, your online broker plays a significant role in your ability to make a profit. After all, you will be entrusting them with your trading capital.
With the internet full of regulated and unregulated online brokers, you need a strict criterion to verify which provider is right for you.
Make sure that you check up on the following aspects before signing up.
- Regulation: Regulatory bodies ensure that the broker abides by the rules for the safety of your funds. See whether the broker holds licenses from well-known regulatory bodies such as ASIC, FCA, CySEC, or the SEC.
- Fees: What is the fee structure charged by the broker?
- Payment Methods: Which payment methods can you use to deposit and withdraw money?
- Minimum Deposit: What is the minimum required to trade TRON?
- TRON Pairs: What pairs can you trade TRON against?
- Cryptocurrency Wallet: Does the platform offer a secure crypto-wallet?
- Platform Navigation: Is the platform easy to use, and friendly for beginners?
- Mobile App: Is there a mobile app that allows you to trade TRON on the go?
Taking the above into account, we recommend that you consider eToro. From our research, the platform is miles ahead when it comes to trading TRON, not least because:
- This social trading platform is licensed by the FCA, ASIC, and CySEC. It is also registered with FINRA in the US.
- The platform can serve both trading novices and professionals equally well.
- All TRON trades are commission-free, offered with tight market spreads.
- A variety of payment options are offered, including debit/credit cards and e-wallets such as PayPal and Skrill.
Step 2: Open a TRON Trading Account
When you have chosen an online broker, you can go ahead and create an account.
The process is similar to signing up on any other website, except that you will also need to submit your government-issued ID. Online brokers that abide by KYC (Know Your Customer) rules will require this to verify your identity.
You will have to provide your:
- Full name
- Phone number
- Email address
- Valid government ID (passport or driver’s license)
Step 3: Add Funds
Now it’s time to make a deposit. At eToro, the minimum deposit is $200, albeit, you can trade TRON from just $25.
You can add funds with a credit/debit card, e-wallet, or bank account.
Step 4: Choose TRON Trading Market
You can now explore the trading markets available at eToro. You can choose to trade TRON against a fiat currency like the US dollar or against a cryptocurrency like TRX/BTC.
Step 5: Place TRON Trade
Once you have chosen a TRON market to trade, you now need to place an order.
In case you need a quick recap on how to trade TRON, do not hesitate to check our previous section on market orders.
How to Trade TRON Guide - The Verdict
If you're a beginner in the crypto space, understanding how to trade TRON might seem a complex process at first. But, by reading our guide in full, it is hoped that the mist has now been cleared.
The most important thing is that you choose a trading platform that is regulated, alongside fees and commissions that are competitive.
At eToro, you can trade TRON in a safe and secure manner - as the platform is licensed in several jurisdictions. Additionally, this user-friendly broker doesn’t charge any commissions and the minimum order size is just $25.
eToro –Best Broker to Buy TRON
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.
1. How can you trade TRON safely?
TRON trading is safe, given that you stick with a regulated broker like eToro.
2. How can I trade TRON online?
To trade TRON online, you will need to find a suitable online broker. On platforms like eToro allow you to trade TRON for as little as $25.
3. Can trading TRON make you rich?
Trading TRON comes with its benefits and risks. If you predict the market sentiment correctly, you will make a profit. If you don’t, you will lose money. It is best to have a bankroll management strategy in place to mitigate your potential losses.
4. Is trading TRON legal in the US?
TRON can be traded legally in the US. But, you cannot trade TRON CFDs.
5. How can I apply leverage on TRON trades?
The easiest way to obtain leverage when trading TRON is to access the market via a CFD broker. However, take note, cryptocurrency CFDs are banned in several countries - including the US and the UK.