Cardano Trading Guide

What is Cardano trading and is it safe?

Cardano is a public blockchain that uses consensus-driven proof of stake protocols to process transactions. These peer-to-peer transactions are facilitated by a native cryptocurrency known as Ada (ADA). The platform was founded in 2015 by Charles Hoskinson, the co-founder of popular cryptocurrency Ethereum.

Today, the blockchain’s token is among the most popular crypto trading assets online. It doesn’t have as big a market cap as Bitcoin or Ethereum. However, Cardano trading has attracted a steady stream of interest since ADA was released in 2017.

In fact, in 2021, Cardano online trading surged due to declining interest in Bitcoin and the long-awaited stable release of ADA. This means the Cardano blockchain has reached the final stage of its release cycle. Although there will be many more improvements, the basic structure of the blockchain is set.

This should give Cardano some stability. That’s great news for anyone looking to trade ADA online. Moreover, it means Cardano remains a legal financial asset in the UK, Europe, North America, and the rest of the world. Therefore, it’s possible to buy and sell ADA using our recommended Cardano trading platforms below.  

Live Chart Cardano

How to trade Cardano online

You need access to the Cardano trading market in order to buy and sell ADA. Understanding the blockchain and using it to make ADA transactions is great. However, if you buy ADA as an asset, you only profit when its value increases.

To maximise your flexibility, you should use a Cardano trading platform. With the right site, you can go long or short on ADA. Check out the section below for tips on how to find the best Cardano trading platform.

Chose an exchange platform & open an account

Crypto trading comes in two main forms: direct purchases and contracts for difference (CFDs). Direct purchases are when you buy the underlying asset. In this context, that means you’ll buy Cardano tokens (ADA). When you own tokens, you stand to make a profit when their value increases.

CFDs allow you to trade the price of Cardano. You don’t buy the underlying asset, which means you don’t own any tokens. Instead, you’re speculating on price movements. Depending on the trade you execute, CFDs allow you to profit when a cryptocurrency’s value increases (going long) or when it decreases (going short).

The crypto trading platforms we recommend allow you to buy and sell CFDs. Our experts have reviewed all of the best Cardano trading platforms and given you their honest opinions.

Of course, there’s no substitute for personal experience. With that being said, you should use our Cardano trading reviews in tandem with the sign-up links to test out the software for yourself. Once you’ve found the right site, check out the next section of this guide for advice on how to buy and sell ADA.

Buy some Cardano

You can follow the steps below to buy ADA at our top-rated Cardano trading platforms:

1. Click here to read our Cardano trading platform reviews.
2. Use our secure registration links to join the platform/s that best suit your needs.
3. Create your first (and only) account.
4. Verify your account by uploading two forms of official ID (you may need to supply more or less).
5. Once your account has been verified, make a deposit.
6. Go to the cryptocurrency trading page and search for Cardano/ADA.
7. Enter the number of ADA tokens you want to buy. The amount you have to pay will depend on the price of Cardano (i.e. ADA) and the number of tokens you enter.
8. Execute the trade. Your trade will be profitable if you sell when the price of ADA is higher than you bought the tokens for.

Trade

If you want the option to profit when the value of Cardano decreases, you can trade CFDs instead of buying ADA directly. You can do that by following these steps.

1. Follow steps 1 to 6 (above).
2. Decide whether you want to go long i.e. you think the value will increase or go short i.e. you think the value will decrease.
3. Enter the number of CFDs you want to purchase and execute the trade. *Note: you can initiate additional commands such as stop loss and take profit limits. You can learn more about these below.

Profit

Crypto trading is all about monitoring the price of your asset. In this context, the price of Cardano means the value of the blockchain’s token i.e. ADA.

Close your position to take a profit or cut a loss

The aim of this game is to sell for a better price than you bought at. If you’re buying the asset, that means selling when the price is higher. If you’re trading cryptocurrency CFDs and you’ve gone short, that means selling when the price of ADA is lower than the point at which you executed the trade.

Tracking the markets and knowing when to exit trades is a skill. However, the best Cardano trading sites give you some tools that can make things easier. These tools are auto commands that end trades at predetermined points. Technically, they’re known as stop loss and take profit commands.

Stop Loss = You input an amount you’re willing to lose before you execute the trade. This command governs how long the trade remains active i.e. it tells the software to exit the position once your loss limit has been reached.

Take Profit = You input an amount of profit you want to make before executing the trade. This command governs how long the trade remains active i.e. it tells the software to exit the position once your predetermined profit limit is hit.

Using stop loss and take profit commands is great because it takes the emotion out of trading cryptocurrencies. Financial swings can cause people to lose focus and act irrationally. These commands are set at the start when you’re thinking clearly. Therefore, they’re more likely to help you maximise your profits and limit your losses.

Stop loss and take profit commands are also useful when the markets are particularly active. The price of Cardano can fluctuate wildly in a short period of time. So, if you’re not constantly watching your monitor or checking your mobile device, it’s hard to exit trades at a desired point. Auto commands mean you don’t have to watch the markets 24/7.

Tips to trade Cardano

No one should enter the market blind. Trading Cardano online has become popular in recent years. However, it’s important to acknowledge that there’s risk involved. You could lose money. One way to increase your chances of losing money is by not having a strategy. An informed, logical and calculated trader is a potentially profitable one. With that being said, you need to develop a Cardano trading strategy.

Learn what moves Cardano’s price

The most important tool you can have in your trading arsenal is knowledge. Understanding your asset is vital. Firstly, make sure you understand what Cardano is. As we’ve said, it’s a blockchain that uses proof of stake protocols.

The platform’s overarching aim is to facilitate fast and secure decentralised transactions. These transactions are exchanges of information. That information could be financial or something else. The point here is that ADA tokens carry information from one party to another in a decentralised manner. As major companies latch onto this idea, that will shift the price of Cardano.

For example, the price increased in 2019 when trainer company New Balance launched a pilot program on the blockchain. The aim was to use Cardano tokens as a way of tracking the authenticity of the company’s new basketball shoe. A similar thing happened in 2021 when Cardano announced a link up with the Ethiopian Minister of Education to launch a new identity and record-keeping system.

The lesson here is that investment and support from established businesses and governments can influence the price of Cardano. All cryptocurrencies are fighting for mainstream recognition. The founders want people to exchange information via blockchains. So, when a major organisation uses the Cardano blockchain to exchange information, it matters. As a Cardano trader, you need to keep up-to-date with the latest headlines and see who is supporting it and who isn’t.

Pick a Cardano trading style and strategy

As well as assessing the blockchain and its evolution, you need to consider price charts and technical indicators. At the end of the day, you’re aiming to buy and sell Cardano for the best price, you’re not necessarily concerned whether the blockchain becomes a mainstream asset. The best Cardano trading platforms give you plenty of graphs, charts and daily updates. You can use these to develop your own Cardano trading style and strategies.

Trading Styles

The way you trade should be based on your personality, your financial position and the market. You should also consider how active you want to be. For example, scalping is a fast-paced style of trading that requires intense focus for short periods of time. In contrast, position traders can play the long game and not enter/exit the market at such a rapid pace. Therefore, you need to think about the style of trading that suits you and your financial position.

Trading Strategies

In general, there are four main trading styles you can choose to follow:

Scalping: This is a trading style where you make multiple trades in a short period of time, often flitting from long to short positions and vice versa. This could be a good style for those who like to be active in short bursts.

Day Trading: This is where you start and end trades in a single day. You can buy and/or sell during this time period but you never hold a position overnight. This is possible on any Cardano trading platform because the markets will be open 24/7.

Swing Trading: Trends in trading tend to end with a certain amount of price volatility. This is a by-product of the asset trying to establish a new position as it moves from one trend to another. Swing traders enter the market at this moment of volatility and, depending on the dynamics, will go long or short. The aim is to capitalise on the volatility and sell before a new trend is established.

Position Trading: This is a longer-term style of trading. The general aim is to look for higher highs and lower lows on price charts. In other words, when the price goes beyond a previous high or low, it’s time to enter the market. Position traders will ride this momentum until they think it’s going to swing in the other direction.

Decide whether to go long or short

CFD Cardano trading allows you to go long or short. Long positions are when you believe the value of the asset will increase. Short positions are when you believe the value of the asset will decrease. Deciding which position to take will be based on the market. If you believe a bull run is about to start, go long. If you think the market will turn bearish, go short.

Set your stops and limits

Stop loss and take profit limits are important because they prevent you from going over budget. Firstly, the limit should match the amount of risk you want to accept and that your bankroll can take. If you’ve got £1,000 to trade, a stop loss limit of £900 would be too high because a bad run would decimate your finances.

Secondly, it brings an air of certainty to your trades. You know that, whatever happens, you’ll only lose/make a certain amount. In an uncertain world, anything that adds some certainty to the mix is a positive.

Risks

There are always risks when it comes to cryptocurrencies and Cardano trading. Your money will be at risk. The main reason for this is volatility. Even though blockchains and cryptos have been around since 2009, the technology is still evolving. Moreover, they’ve yet to achieve mainstream adoption.

Therefore, despite coming a long way in recent years, blockchains are still an unknown quantity. That means the value of any crypto, including Cardano, can swing wildly based on very little. Indeed, you only have to look at DOGECOIN and how a single tweet from Elon Musk can shift the price.

Conclusion

Cardano online trading is potentially profitable, if you’re willing to invest time in learning more about the blockchain. What’s nice about this crypto is that it’s not as volatile as Bitcoin and Ethereum because it’s not as popular.

That does mean the highs may not be as high. However, it also means there can be more stability in the market. That’s attractive for any aspiring cryptocurrency trader. If that’s you, make sure you check out our recommended Cardano trading platforms for a safe, secure way to buy and sell ADA.