How to trade Ripple CFDs?
Forex and CFD trading are popular among traders but cryptocurrencies offer a broader mix of tradable instruments. This is why we’ll have an in-depth look at trading the Ripple vs US Dollar pair. We will be talking about tools, instruments, and trade plan ideas. Additionally, we will explore a variety of aspects of the XRP/USD crypto pair. We will include an examination of technical analysis aspects such as trend, momentum, support and resistance, as well as an overview of how to day trade the pair on MetaTrader 5.
Ripple cryptocurrency showed massive bullish momentum in the first half of the year, but all those gains had fallen by mid July. Currently, the cryptocurrency is clearly in a consolidation phase with a bullish outlook. In general, we can say that the Ripple/USD rate is moving up and down with speed and impulsiveness. Although the price fluctuates quickly, that does not mean a trend is visible.
Trading Ripple CFDs
When applying technical analysis to price charts, S&R is always a key factor. As XRP/USD is trending rather than ranging at the moment, the S&R concept becomes even more important. In a theoretical view, it is important to use a dynamic Support and Resistance indicator (Gravity Indicator) when trading Ripple. A dynamic version is preferred over a static one for the following reasons:
- The volatility of price action is high.
- There is not enough historical data.
The dynamic indicator of our choice is the Gravity Indicator, which is part of MetaTrader 5. It offers consistent support and resistance levels and is automatically updated with every new candle. The indicator also provides key break and bounce levels as you can see in the chart below.
Day trading Ripple
Lower time frames always require more practice and experience than higher time frames. Trading the 15-minute chart may provide more trading opportunities but there is also more ‘noise’ and traders need to be more selective about the setups they choose.
The next step is to keep the larger trend in mind when trading lower time frames and day trading XRP/USD. It is for this reason that 144 EMAs are usually added close to the chart.
Of course, this is just a rough idea of how to deal with intra-day trading. Trading methods can be used in many different ways to handle the markets. For more information, take a look at our other articles. Although it is possible to earn money while trading XRP/USD, you should always keep in mind that this involves risk, which means that you can lose money as well. If you want to trade the financial markets, you should always take into account a few key elements.
One must pay close attention to discipline and strategy. It is very important to keep a balanced state of mind when you deal with the markets. In other words, trading psychology. There are many pitfalls that can trap traders into bad habits and false biases. Otherwise, it could be tempting to revenge trade, to overtrade, to overanalyze, and/or to suffer many other difficulties.
Risk management is another important aspect. In the long run, traders who are less risk-averse are much more likely to lose their full trading capital and potentially more if they don’t have adequate risk management strategies in place. Each trade can be divided into small amounts of capital, such as 0.5%, 1%, or 2%, to avoid losing the entire trading capital (and one’s mental capital as well). There are usually no significant consequences for a streak of losses (drawdown), so traders are able to continue trading the next day.
Trading other cryptocurrency CFDs
With Eightcap, traders can also trade Bitcoin against the US Dollar (BTC/USD), Ethereum against the US Dollar (ETH/USD), and Litecoin against the US Dollar (LTC/USD). . If you are looking for more cryptocurrency pairs to trade, you can find 250+ on our website.
Trading on MetaTrader 5 requires downloading the software or using the WebTrader terminal, which provides access to the market and allows traders to watch price action on their charts. We make everything very simple and quick, so you’ll be ready to go in no time.