The Bitcoin boom in 2017 brought attention to many cryptocurrencies like Ripple. As of late 2020, assessing its market capital and size, Ripple is the fourth largest cryptocurrency payment solution. Ripple’s native digital currency, XRP, allows financial institutions to transfer money with negligible fees and wait-time. Ripple is an open payment system, and its main goal is to help people break free from credit card companies, financial institutions, banks, and networks that charge fees and cause delays. Ripple was developed as a digital payment network that can be used in real-time financial transactions.
- In 2004, Ryan Fugger from Vancouver, Canada, conceived the idea of Ripple. In 2012, XRP was first released, and it has a market cap of a hundred billion tokens.
- In January, the coin’s all-time price went as high as $3.84; currently, there are around 44.3 billion tokens in circulation.
- This currency was under development for more than 10 years, and finally, in the year 2014, various large banks started using Ripple and its payment networks. Ripple provides many advantages over banks like pricing, distributed ledgers, and security.
- Ripple permits businesses to execute transactions within 3 to 5 seconds; the payments are automatically processed and received by the people that are irreversible; many global financial institutions have partnered with Ripple and started using the Ripple network.
- Ripple also has developed Ripplenet, which is a global payments network; it is specifically designed to minimize fees for cross-border transactions.
How does Ripple work?
The Ripple network does not run with a proof-of-work system like bitcoin or a proof-of-stake system like Nxt. Instead, transactions rely on a consensus protocol in order to validate account balances and transactions on the system. The consensus works to improve the integrity of the system by preventing double-spending. Ripple keeps track of all IOUs in a given currency for any user or gateway.
How to trade Ripple?
Find out how you can trade Ripple in 4 easy steps –
- Open an account
Before you proceed to open a CFD trading position, you need to open an account with a leveraged service provider. Within a few minutes, you can set up an account; there is no compulsion to deposit funds until you have decided where you want to place your first trade. If you aren’t ready to buy Ripple but only speculate its price movements, you don’t even need an exchange account to get started.
- Design a trading plan
Devising a trading plan will benefit you by expanding your knowledge of the markets and maximizing profits, and minimizing losses. You might want to consider using a unique trading strategy or plan for trading Ripple; you can also take advantage of short-term price movements and close each position by day trading. Things that you might want to consider when developing a trading plan include:
- Daily, weekly or monthly goals
- Trading choices as in trading ripple exclusively, or with additional markets like bitcoin, fiat currencies, or stock indices
- Risk-Reward ratio
You should do your research on Ripple, how it works, and other factors that influence its price before trading. Also, you should be aware of the latest developments about Ripple and use technical analysis to decide whether you should open a trade or not. You need to check the XRP chart to analyze its previous price movements and identify certain trends that could offer you an insight into what to do next.
- Execute a Trade
When you open your first position, you can trade using any web platform or through your mobile app. You can also use the stop-loss feature where it might close your position automatically if the market goes downwards.
Key Steps to Trade Ripple like a Pro
The first step to trade Ripple is, you should decide on how to take advantage of Ripple price movements. Ripple can be traded in two ways –
- The first one is, you can buy Ripple on a crypto exchange, hold it, and sell it later for a profit.
- You can use leveraged trading to trade on Ripple’s price movements.
When you try leveraged trading, you need not use the full value of your position upfront; this means you can get more exposure without adding extra capital. Your profit and loss will be based on the size of your position, after all. By using CFDs, it helps you to open leveraged trading positions on Ripple, also Bitcoin, Litecoin, Ether, and more.
- One common approach for Ripple trading involves contracts for difference, also known as CfD for short. When done correctly, this is an exceptionally helpful tool for speculating on whether prices are going to rise or fall – and a trader doesn’t actually need to own the underlying asset, in this case, XRP, to gain exposure.
- Spread betting. Another approach effectively involves making a wager on whether XRP is going to go up or down in a predetermined period of time.
- Finally, some exchanges also offer futures for Ripple, which creates the obligation for XRP to be bought or sold for a set price on a set date.
Apart from knowing how to trade Ripple, it’s crucial to make full use of tools that can help shield you against losses and protect profits. Stop-loss orders can ensure that your holdings are automatically sold off whenever they dip below a certain level, while a take profit enables you to bow out gracefully once your targets have been achieved.
We can’t say with certainty what’s going to happen to XRP in the not too distant future. But when you learn how to trade Ripple, it’s important to absorb as much data and history about this cryptocurrency as possible to ensure that your strategy doesn’t backfire. Apart from this you have to keep an eye on xrp prediction, so that it becomes easy for you to decide the right time to invest in it.