Dash is a digital currency that can be used to send or receive payments. Like Bitcoin, it's built on top of the blockchain technology but with some significant improvements. Among the reasons for the popularity of the cryptocurrency is that it offers higher transaction speeds and better privacy. This is possible because of the use of a unique model that involves “Masternodes”. Besides these benefits, the cryptocurrency also operates on a self-governing and self-funding model. Throughout this comprehensive article, we will explain how to trade this cryptocurrency and some dash trading styles and strategies.
Dash trading simply refers to speculating the price movement of this crypto coin with the aim of making a profit. For instance, you can buy the coins (go long) if you think it is going to increase in value or sell (short) if you think the value will drop. Besides buying and selling Dash coin, you can also trade it as cryptocurrency pairs. The most popular Dash trading pairs are with Tether (USDT) or Bitcoin (BTC). Before you can buy Dash, however, you need to open an account with a crypto trading platform.
Dash transaction rules are quite similar to that of Bitcoin. However, it has a greater privacy feature that protects the information of individual users' wallets from being disclosed to the public even when you use the cryptocurrency for transactions.
Dash complies with the Financial Action Task Force (FATF), and this means that it is against money laundering or financing of terrorism. Every Dash trading platform must also register and obtain valid licences from the appropriate authorities, depending on the country it is operating from. This may include registration with SEC and FinCEN.
Trading with a licensed broker comes with several benefits. First of all, it protects you from fraudulent activities and ensures that your trades are not meddled with. Aside from that, you can have peace of mind that your funds will be compensated for appropriately if the broker goes bankrupt. Trading at a regulated broker also makes it easy for you to withdraw. This is because your investment with a regulated broker does not go into the same box as the broker's capital.
There are several crucial steps involved to ensure that you can successfully start dash trading online. Over the next few paragraphs, we'll go through them in chronological order.
To get the best experience trading Dash, you need to choose the best Dash trading platform and create an account with it. As we mentioned earlier, it is essential that you trade with a licensed broker. To create an account with a Dash trading platform, simply visit the website of the platform and click on the Sign Up/Register button. You'll then have to provide details such as your name, email address and phone number. After that, an activation link will be forwarded to your email, and you'll need to upload some verification documents.
After creating an account and completing all the required verification process, you can then proceed to buy some Dash into your trading account. If your trading platform supports fiat to Dash conversion, the process is quite straightforward. You'll need to link a payment method with your account and place a buy order. Two types of buy orders exist - market order and limit order. For market order, you're buying at the current market price of the cryptocurrency, while a limit order allows you to set a specific price point where you want to buy.
Trading Dash is not as difficult as some people think. If you have some Dash in your trading account and sell it to make a profit, that's it: you've traded the cryptocurrency. As with buy order, you can sell your Dash using either market order or limit order. If you're trading
Dash as a currency pair, you will need to perform some analysis that can help you determine whether to go long or short. It is recommended that you start trading Dash with a demo account to get familiar with how it works.
When trading Dash or other cryptocurrencies, if you buy at a price and sell at a higher price, it's considered as a profit. However, if the price goes down and you sell, you have made a loss. Making a profit in Dash trading has to do with the difference between the buying and selling price. There are two types of crypto traders, the short-term trader and the long-term trader. The long-term trader trades over a long period of time, for example over a number of days, while the short term trader does so within minutes or hours.
Closing your position in a crypto trading simply refers to as executing the opposite of an opening position. You should always close your position to make a profit or minimize a loss. This is because the crypto market fluctuates and anything can happen at any time. If you're already making a profit, you may end up losing both the profit and your money if you fail to close your position. Do not allow greed or fear cause you to hold your position even when you are losing, as you may end up losing more.
To close your position, you need to do the exact opposite of your opening act. This means that if you buy, you need to sell and vice versa. You can also close your position automatically by setting a take profit or stop loss (more details on that later).
The beauty of Dash trading is that there is no specific rule as to how you can close your position. Day traders can sell/buy within seconds once the profit they generate is enough for them, while long-term traders can wait for months before closing a trade.
Below, we'll share a few tips on how to trade Dash successfully and stand a greater chance of taking a profit.
Since Dash is a cryptocurrency like Bitcoin, it is highly volatile. This means that the value can change at any time as a result of certain factors.
If you are interested in trading Dash, you need to know the different things that move the cryptocurrency's price. The cryptocurrency market moves as a result of supply and demand. If the demand for the coin is more than what is available, the price goes up. However, if the supply is more than demand, the value goes down. Dash is decentralised and is free from political control.
Before you start trading Dash, you need to pick a trading style and strategy. There are several kinds of trading styles to choose from, depending on your goal and the kind of trader you want to be. The best way to know which style will work best for you is to try different styles. Some styles, such as Scalping, Day Trading, and Intra-Day Trading, are best suited to short-term traders, while styles like position-trading and swing trading are suited to long-term traders. You can also mix multiple styles to create your preferred trading style.
Having a Dash trading strategy is essential if you want to become a successful trader. Most strategies used in Dash trading revolve around technical analysis. Unlike fiat currency trading, where some political news can affect the trading market, cryptocurrencies are less prone to such. As part of your strategy, you should ensure that you minimize your trading costs and you may also want to pay attention to cryptocurrency news and stories. As a trader, you should be familiar with different indicators used for analysis such as the OBV indicator and resistance and support levels.
Before you enter a trade, you need to decide whether you want to go long (buy) or short (sell) depending on your analysis and trading strategy. The advantage of going long in a trade is that it is a simple and straightforward trading strategy, and you do not need a special broker to help you handle your trade. Going short in crypto trading requires a lot of discipline, but it can end up being very profitable. Whether you go long or short, you should be aware that you can lose money trading Dash.
As we mentioned in one of the preceding paragraphs, you can close your trade automatically by setting stops and limits. As a good trader, this is essential because it helps you take profit and avoid too much loss. Setting take profit simply refers to indicating the value (towards profit direction) where you want the trade to be closed and take your profit. As for stop loss, it indicates a value of the maximum loss you are willing to take in the trade. You should always set realistic stops and limits in your trade.
Dash trading comes with risks. Besides the obvious risk that you can end up losing money, there isn't much historical valuation range, and this makes it difficult to assess the value of the coin. Aside from that, changes to International Capital Controls could reduce the demand for cryptocurrency, as is the case in China. The fact that Dash is unregulated also makes some people consider it as a high risk. Additionally, since the cryptocurrency was founded in 2014, it's not yet covered by all financial bodies and this can be considered as a risk.
Dash trading can be a very profitable undertaking but does not come without its risks. Undoubtedly, the higher level of privacy and transaction speeds that this form of trading offers is very attractive, but one must remember that Dash is a relatively young cryptocurrency, and therefore it may prove difficult to correctly assess its value. That said, setting realistic stops and limits, and trading with a reputable online broker will help you to maximise your profits and avoid serious losses while Dash trading.