Ripple was one of the world’s fastest-gaining coins with an approximate advance of 214 times during the period from September 2013 to January 2018. If you haven’t known how to trade this cryptocurrency, it’s time to learn and start making profits.
What Is Ripple?
Ranking third in the list of cryptocurrencies that have largest market capitalisation, Ripple is an open source protocol invented to deliver fast and cheap transactions. The prominent characteristic of Ripple is that it allows two parties to exchange any type of currency, from fiat currency to even airline miles.
Many people assume that Ripple is blockchain-based. The fun fact is: despite that Ripple is consensus-oriented, it isn’t a blockchain. In this network, data are summarized by a HashTree and are compared across validating servers in order to provide consensus.
Since Ripple was established, there have been more than 40 million transactions processed successfully. Ripple can handle up to 50,000 transactions per second, and that ranks it among the platforms that have the fastest transaction processing speed.
Trading Ripple
Ripple’s token, XRP, is currently trading around $0.45. This is a very cheap price compared to that of Bitcoin or Ether.
In order to trade XRP, you have 2 options: using a crypto exchange or trading CFDs with a Forex broker. Below are the details:
- Using a crypto exchange
Pros:
- You can buy XRP directly
Cons:
- Complex verification procedures
- High-cost
To trade XRP directly, you will have to open a trading account at a crypto exchange. There are many reliable crypto exchanges that allow you to buy XRP instantly, and the most outstanding names include Binance, CEX.io, Changelly, Bittrex, Coinmama. Each site offers different payment methods and fees so make sure that you have checked everything carefully before proceeding with your chosen site.
You can use the following checklist to select your best-suited crypto exchange:
- Geographical Restrictions: Most crypto exchanges are available worldwide; however, there are also exceptions (e.g. Coinmama doesn’t allow clients from the US).
- Reputation: You can check a crypto exchange’s reputation by reading reviews from users and industry websites.
- Fees: Trading fees vary by sites. Currently, the lowest fee is 0.25% per trade (Changelly, Bittrex), while the highest fee is 6% per trade (Coinmama).
- Payment methods: Some crypto exchanges allow you to trade directly with fiat currencies, while some only accept deposits in Bitcoin or Ether.
- Trading CFDs with a Forex broker
Pros:
- No need to open a wallet
- No complex verification procedures
- Low-cost
- Trading with regulated brokers
- Making profits even when the market tumbles
- Gains can be multiplied with leverage
Cons:
- High leverage increases risk
A Contract For Difference (CFD) is a trading instrument that allows you to take advantage of a financial asset’s movements without actually having to own that asset. This is a great tool for speculators and traders.
In order to trade CFDs and make profits from Ripple’s movements, you will have to choose a suitable forex broker and open a trading account. easyMarkets is one example of a reliable forex broker that offers CFDs for Ripple Trading. You can alternatively use the checklist mentioned above to find a broker that suits your needs.
Conclusion
Above are the most prevalent methods to trade XRP today. Besides choosing your favorite method, make sure that you have grasped the basics of trading and have a trading strategy tested carefully on demo accounts. Since XRP is a highly volatile asset, we suggest that you should practice trading it with virtual money for at least 6 months before trading it for real.
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