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How To Trade TRON - Step-by-Step Guide

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TRON (TRX)
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7 DAYS CHANGE
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The basics of trading TRON, as well as any other cryptocurrency, are rather clear to everyone. You buy when the price is low, and sell when it goes high to profit from the difference between the two levels. However, this is a very basic definition of trading.

Successful trading, on the other hand, requires a lot more than that. It requires accurate price prediction through analysis, regular monitoring of the market, which can be quite time-consuming, and more. Today, we will explain all of that in detail, and tell you how to trade TRON properly.

TRON Trading Summary

While trading may seem simple at first, the fact is that there is quite a lot to do before you can even place your order and enter a position. In short, you need to come up with a trading strategy and learn how to take advantage of the price volatility. You must also be patient and careful not to rush things. 

Rushing things often leads to entering a bad trade too early, before you realise that it is a bad trade. At that point, it is usually too late to withdraw and save your funds. But, if you can learn when to act and when not to, you can become exceptionally good, and even make trading a regular source of income. You are not even limited to only trading TRX coins, as you can always turn to crypto derivatives, which let you trade even during the bearish periods.

Start Trading in 3 easy steps

1. Choose a Trading Strategy

The first step to trading TRON properly is to figure out what trading strategy you wish to use. In addition to that, you also need to learn how the price moves, what causes it to move that way, and how can this movement change the price’s performance in the near future. As far as strategies go, there are plenty to choose from, and we will list some of them shortly.

2. Register on an Appropriate Platform

Your second step will be finding the right platform to trade. First, you will have to choose whether you wish to go for TRON coins or TRON derivatives. After that, decide whether you wish to trade on an exchange or through a broker. Then, simply choose the best platform available and set up your account.

3. Start Trading

As you may have guessed, things are never as simple as just entering a trade. You will need to decide on different things, such as your order type, the amount you are entering the market with, whether to buy or sell, and more. After registering on an appropriate platform, you will need to deposit funds and then you can start trading.

TRON Trading Explained

To trade TRON, you will have to enter a trading position. This means declaring your intention to the market—whether you are buying or selling, at what price, and alike. Of course, this is only the final step of the trading process. Before that, you need to decide whether to trade derivatives or TRX coins

Trading TRX coins means that you are buying and selling actual coins. You will have to create a wallet to store them in, and you will be responsible for their management and security. Trading derivatives, on the other hand, doesn’t require you to do that. Derivatives derive their prices from cryptocurrencies, such as TRX. 

Derivatives include Contracts For Differences (CFDs), futures and options. They allow you to bet on the prices of cryptocurrencies only, without the need to buy or store coins. This is also what lets you earn money during the bear market trends. Essentially, when you buy coins, you have coins. If their price drops below the one at which you bought them, you have something less valuable than when you bought it. Clearly, you have experienced losses.

If you trade derivatives, you can bet that the price will go up or down, and if you are right, you make money. However, predicting the price movement with precision is what is truly tricky in this scenario.

Betting that the price will go down, or selling coins is called going short. The opposite, i.e. buying coins, or betting that the price will rise is called going long. You can also maximise your profits by engaging in margin trading, also known as trading with leverage, where you borrow money from the platform to buy more coins than you can afford with the money you have in your account. But, this is also very risky, as your chance of winning diminishes with the size of the leverage.

With that out of the way, let’s talk in detail about the previously mentioned three steps to successful trading of TRON.

Trade TRON: Establish a Proper Plan

Let’s start by talking about planning your trade. This step consists of two smaller steps, making a price forecast through analysis, and selecting a trading strategy. When it comes to price analysis, there are two different approaches. The first is known as fundamental analysis, which tells you why the price moves the way it does and what affects it, while the second is technical analysis, and it revolves around reading charts.

Understand What Moves the Price of TRON

Fundamental analysis tells you what impacted the price and why. As you know, TRON is a cryptocurrency that is not linked, backed, or pegged to any real-world asset that has its own value. That means that TRON price is subjected to change, depending on the market sentiment. 

In other words, any positive developments regarding the coin, which might inspire optimism in people, are likely to increase demand and positively impact TRX’s price.

This can be anything, from news and positive price forecasts, to new use cases, new breakthroughs in development, announcements of new projects, greater use of the TRON network and more. Whatever makes TRON seem like a valuable investment is likely to inspire people to buy it, and as a result, make the coin more valuable.

Technical Analysis: Read the Charts!

The second type of analysis is technical analysis. This involves analysing the coin’s price from a technical point of view, meaning that you will have to read the charts, notice patterns in price behaviour, analyse figures and numbers and deduce where the price is going next based on all of this.

Charts can reveal a lot, including past behaviours and shapes of patterns. If you can recognise patterns, which may happen during the same time of year, or once every few months, or even under specific circumstances, you can prepare yourself for it when the pattern starts repeating. 

Charts can also show you the changes in the coin’s volume, indicating that people are buying more or less at certain times of day, week, month, or year. This can also prepare you for the next price growth, or price drop, if you notice a surge in sales.

Charts are also crucial for some trading strategies, such as scalping, where traders buy and sell in a matter of minutes to profit from even the smallest price changes. But keep in mind that fundamental analysis is also very important, as it can disrupt the flow of the price as indicated by the charts. Essentially, if the price is seemingly growing, and news of a hacking attack emerges, then the price will undoubtedly drop without warning. So, charts can only be reliable during calmer periods, when the coin’s price is following its natural flow, and is not impacted by events.

Common Strategies to Trade TRX

Day Trading 

Day trading is one of the most popular strategies, especially during the more volatile periods. The crypto prices are volatile, and cannot be trusted to be consistent for long periods. In particular, during volatile and eventful periods, such as bull runs or market crashes, price behaviour is more unpredictable than ever. As a result, you can never know what is going to happen next, which is why many traders prefer to enter and exit their trades in a single day. That way, they can quickly react to price changes, and either profit or at the very least minimise their losses.

Scalping

We mentioned scalping a little while ago, noting that it is a form of trading that is done in very short periods, often mere minutes. As such, scalping is a form of day trading, but where day trading can take hours and aims to use small price changes, scalpers aim to profit from changes that are even smaller than that. Depending on the coin, even improvements as small as fractions of cents can be beneficial, and scalpers will take it.

HODL TRON

If, on the other hand, you don’t have the time to spend your entire day looking at charts and waiting for prices to surge by a few cents to make a profit off of TRX trading, you can always opt for HODLing if you believe that TRON has a rich and profitable future. HODLing is a form of investment, rather than trading. Not unlike stocks, you can invest in TRX and keep it for months, years, or longer. However, while anyone can profit from scalping, HODLers can only profit if the coin they invested in grows big someday. 

Choose a Platform that Fits your Trading Strategy

Once you have selected a trading strategy and done your price analysis, you need to select a platform that fits that strategy. For example, if you expect that the prices will grow, you can either invest in coins, or into derivatives contracts. However, if you expect that the price will drop, then there is not much sense in purchasing crypto.

That means that you will have a choice to hold cash and wait for the price to hit bottom and invest into cheaper coins, or invest in derivatives and bet that the price will go down. The first move is safer, and it provides you with the opportunity to earn if you end up being correct. The second one is risky, but if you are right, you stand to gain a lot of money which you can then invest into cheap coins once the price hits bottom, or bet that it will grow from there.

There are also brokers available that will allow you to access prices from more trading platforms, as they tend to partner with plenty of them. On the other hand, if you go directly to the platforms you will only have access to the prices of the cryptocurrency exchange on which you created your accounts.

Brokers are more practical, and they can be used for derivatives and coin trading alike. However, they will also have their own fee for their service, so you will have to pay a bit more to have the benefit of using their platforms. But, they are also regulated, while most exchanges are not, and trading on unregulated platforms comes with a whole new set of risks, such as picking an exchange that might shut down without warning.

Set up your Trading Account

Once you have your price prediction and strategy figured out, and you choose a platform that you wish to use, the next step will be to set up an account. This is fairly simple, and it usually only involves a quick and easy registration, followed by identity verification.

Identity verification is required of all trading platforms by law in most countries, and if your exchange doesn’t require it, it is likely not (fully) compliant with the current rules and regulations. Either that, or it is located in an area where it doesn’t have to verify your identity yet.

But, identity verification is nothing scary or complicated. You will simply have to upload some government-issued documents such as your ID card or passport to confirm that you are who you claim you are, and maybe take a selfie, too. Some exchanges also have different levels of verification, and the higher you go, the more data you need to provide, but you also get to trade more money, as you are deemed more trustworthy.

Other than that, you will also have to deposit some money to start trading, after which it will be time for the final step which is:

Open your First TRON Trade

The last step is to open your first TRX trade. But, as we hinted at before, even this step has several smaller steps that need to be followed. You have to decide on various things, like your order type, the amount you are going to trade, and whether you are buying or selling. Not to mention a few other details, such as calculating the fees and setting up triggers that will help you make the right choice regarding when to move and when not to.

In the end, your trading experience will differ from platform to platform, so you will have to do some familiarising with the platform you choose first. But, on a basic level, it is all mostly the same, so you should not have too many issues doing that. So, with all that said, here are some of the things you need to decide on when preparing to open your first trade.

Order type

Your first choice should be in regard to your order type. Essentially, there are many different order types that you can choose from, depending on what you expect, and what you wish to achieve, but some of these might fit you as a trader more than others. For example, you have Market Order, All or None order, Limit Order, Stop-Loss Order, Trailing Stop-Loss order, Immediate or Cancel Order, and more. 

Many traders would rather go for a limit order than a market order, as it allows for the best buy/sell opportunities. A lot of traders also prefer trailing stop-loss over regular stop-loss, as the trigger for automatic order closure moves as the price increases.

Buy or Sell?

Next, you should decide whether it is the right time to buy or sell, to go long or to go short, to bid or to ask. All of these are different terms for the same things, buying and selling, only they are used on different platforms, which derive from different branches of traditional trading platform types. 

You can also look into the platforms’ order books, which are the lists of all active orders. This can help you understand the market sentiment, and whether the majority of traders are buying or selling. 

Seeing different orders also allows you to determine the spread, which is the difference between the highest bid and the lowest ask. Larger spreads usually signify greater price volatility and lower liquidity, while smaller spreads signal the opposite. 

Amount

One of the common questions, especially when it comes to new traders, is how much money to use. In the end, this is up to you to decide on. All we can say is that it is best for newcomers to crypto trading to stick to the minimum to minimise their losses. If you are new, you are more likely to make mistakes. But, the difference is that mistakes when trading cryptocurrencies could end up costing you your entire investment, so it is best not to risk too much until you ensure that you know what you are doing.

Most platforms have a minimum amount that you can deposit, as well as a minimum amount that you can enter a trade with. 

Leverage on TRON

Trading with leverage involves borrowing a certain amount of funds from your platform, and invest it as if it was yours. 

Trading with leverage reduces your room for mistakes, and the higher the leverage, the greater the risk of making a wrong forecast and losing not only the opportunity to earn, but your money, as well.

This is why margin trading is best left to professionals who have years of experience, as well as enough money to afford mistakes. You should never risk the money you can’t live without, as it is all too easy to lose it while trading crypto. 

Stop-Loss and Trailing Stop-Loss

We mentioned stop-loss and trading stop-loss as market orders that you can use, but we did not say that they also function as risk management mechanisms. You see, when you use stop-loss order, you are essentially selecting a price below TRX current market price. If the price starts fluctuating and it hits the selected price, your order will be closed automatically. 

As for trailing stop-loss, it functions in the same way, with the only difference being that it moves alongside your price when the price starts surging. This makes it a superior order, as it also allows you to earn. 

Take Profit

Take Profit is another very useful mechanism that functions similarly as stop-loss, only you select a price level above the current market price. This is useful for situations where you expect a short surge followed by a drop. Once the market price of TRX surges and triggers Take Profit level, your order will be closed automatically, securing the profits.

Finishing Touches

Lastly, there are a few finishing touches before you open trade, such as considering the fees, and deciding on triggers. On exchanges, you have to pay the exchange fee, plus the transaction fee for the coin you trade. On brokerages, you also have the broker’s own fee, which is why they are more expensive.

As for triggers, they can tell you when it is the right time to act, by acting as certain requirements that the price behaviour needs to meet before it is safe for you to enter a trade. 

Open Your TRON Trade

Finally, you are ready to open your first TRX trade. But, before you do, one last piece of advice. Always check the details of your trade one more time before you execute it. It is very easy to get distracted, type in the wrong amount or accidentally select something that you do not wish selected. If this happens, it could result in a very bad outcome, and it would be a shame for all that careful planning and preparing to go to waste due to a technicality. 

Closing Orders

Once you open your trade, you should also know how to close it. You may want to close it manually due to a sudden shift in the market, or if you decide that it is time to call it a day and not leave your order unattended. Whatever the case may be, you can simply close the order by clicking the button that offers this feature.

Alternatively, your order could be closed automatically if you use stop-loss, trailing stop-loss, or take profit, and the selected level gets triggered.

Final Thoughts: Ready to Trade TRON?

That’s all there is to trade TRON. At least, in theory. In practice, you need to follow up on news, developments, social media, TRON’s side projects and more. You also need to keep an eye on the charts, and also on Bitcoin, as BTC behaviour tends to dictate the behaviour of the rest of the crypto market. Other than that, select your trading platform and strategy carefully, and make sure to not make your decisions based on emotions, but on facts, figures and always follow your strategy. Start by using the button below to trade when you’re ready.

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Frequently Asked Questions

  1. TRON is a project that aims to revolutionise the entertainment industry by offering blockchain-based services and microtransactions using TRX. As such, it most likely has a future in the online entertainment industry, which is certainly not going away anytime soon.

  2. Most platforms require identity verification to reduce the risk of fraud and provide their users with a secure trading environment.

  3. A lot of it has to do with simple common sense. Don’t trade the money you can’t afford to lose. Don’t allow your emotions to guide you. Don’t ignore the advice of experts as they know what they are doing, but also don’t take it as absolute truth, as they also make mistakes.

  4. Yes. It is legal to own it, trade it, and you can even use it to buy goods and services with merchants who accept it. But check your local laws before trading.