TRON Trading Guide For Beginners
Originally meant as a platform for content creators and entertainment purposes, TRON is a major blockchain network today. Created by Justin Sun and initially launched on the Ethereum blockchain, it shifted to its own peer-to-peer network in January 2018 and uses its native TRX coins. As a contender to Ethereum as a complete ecosystem that allows developers to launch their TRC-20 compatible tokens, TRON trading is taken seriously due to its rising value over the years.
If you are interested in the decentralised entertainment system, you can learn how to trade TRON using our guide.
3 Reasons to Trade TRON Now!
Unlike other large blockchains such as Bitcoin and Ethereum, TRON uses a Delegated Proof of Stake (DPoS) model that enables much lighter and faster consensus and allows it to achieve transaction speeds of up to 2,000 TPS and achieve a high level of network security without using an excessive amount of computing power. With the carbon footprint of cryptocurrencies being questioned, TRON is climate-friendly.
Each TRX wallet is given a fixed bandwidth which they consume to make transactions. The bandwidth is replenished every 24 hours and as long as the sender does not consume more than the limit, the transaction is absolutely free. This is very different from BTC or ETH, where miners receive compensation for validating transactions and with higher loads, the fee also rises. Even if the bandwidth is consumed, the transactions require only a nearly negligible amount, since validators in the DPoS model rely on block rewards, not the transactions.
TRON has teamed up with some of the largest firms in the world to expand practical blockchain use in the mainstream. This includes the largest mobile manufacturer Samsung, the peer-to-peer file sharing app BitTorrent, internet browser Opera, Wall Street compliant crypto exchange Poloniex and even the leading Switzerland telco Swisscom.
TRON Trading vs. Investing
With a DPoS based consensus model, only approved validators can operate and earn the block rewards and therefore, the only means for the public to make money on the TRON blockchain is to either trade or invest in TRX coins. Both of these approaches are basic at their core, with the concept of buying when the TRON price is low and selling when high.
To invest one has to buy TRON. You will probably be investing through buying TRX from a cryptocurrency exchange, leading you to eventually need to store your tokens. This means you will should take them of the crypto exchange and move them to a private wallet for better security. Therefore an investor will need to have an understanding of how cryptocurrency wallets operate, know about private and public keys, and generally hold on to TRX coins in the hope of selling them at large profits.
All of this can be slightly too complex for many people and they would rather prefer to avoid all the complexity. Fortunately for the public, they always have the option of trading instead of investing. Trading TRON is done using different types of contracts rather than the TRX coins, making it easy for people to jump on the bandwagon and buy or sell TRON to generate profits. Since all that a trader does is buy or sell the contracts, there is no TRX token involved. Consequently, trading platforms are able to offer legacy environments without a person needing to learn about the intricacies of TRON trading such as opening wallets and needing to send TRX coins back and forth. Crypto trading also has another advantage that since buying and selling is done more frequently than investing, a trader has more opportunities to repeat the trading processes to accumulate more wealth.
Trading is done through TRON derivatives since no TRX coins are being bought and sold, but different agreements that use the underlying TRON value as their basis. CFDs or Contract for Differences is one the most widely available contracts that is as good as buying or selling TRON. A trader buys CFD and sells it later when TRX value is high, pocketing the difference in the TRON price when the contract is opened and closed. As derivatives, complex rules and clauses can be added in the CFD, such as using leverage, leading to much more profits than for the same amount of TRX investment. You should be very careful in using leverage. The higher profitability also means you can also run deep losses. A trading platform will make a margin call if you are slow to deposit more collateral, recovering their money and interest on the loan while leaving you with no money on the platform at all.
Futures is also a popular derivative trading contract. A trader enters into an agreement to buy TRX (or pay for equivalent TRX) at an agreed rate on a specific time and date. At the contract’s expiry, the trader is obligated to honour the agreement. Using the fix rate clause, a trader can make predictions to see if the expected TRON price will be higher than what is stipulated in the contract. A correct prediction means that a trader will pay for assets cheaper than the market and make profits.
Since Futures is a contract that has to be honoured, a trader also runs the chances of making losses if the prediction is not correct, ending up paying higher than what the market is offering. The inability to back out of the contract makes many people nervous. Options is another take on the Futures contract, with the difference that here the contract is not obligatory. If the market is turning out to be against the trader’s favour, he or she can always cancel the contract before its completion time. There is a premium that goes along with the contract, which is a negligible value in comparison to the overall contract’s. Cancelling the contract will save the trader from huge losses and the only money that the trader parts with is the premium, which the other party gets to keep.
There is a third type of contract that is Perpetuals, which in broader terms is just like Futures and makes it obligatory for the trader to pay up, but without any specified expiration date. Perpetuals can be run indefinitely, with complex payment methods on both sides for the high crypto volatility compensation during the whole running time. A trader can decide when to close the contract and pay up the agreed contract value regardless of the TRX price.
TRON Analysis: The Key to Success!
Trading in TRON can be a very profitable venture. Like any other cryptocurrency, TRON is subject to a high level of volatility and this rise and fall of value can be captured repeatedly with trading for successful trades. To do that, however, means that a trader should have a fairly good idea of when the price is likely to fall, bottom out and rise. Buying contracts at a lower price of TRX and selling at higher being the game.
There are two ways a trader can understand and time their buys and sells. The technical analysis depends on mathematical modelling and prediction of the future through taking in different price and movement data, establishing a trend and using that, to make projections on how TRX will fare. Technical indicators involve collecting data such as TRON price over specific periods of time, closing prices and trading volume. These are then run through different formulae to see if the trend continues and determining probabilities of upcoming prices. Prediction models include moving averages, Fibonacci sequences and relative strength index.
Technical analysis is all about numbers, but there are other factors that cannot be quantified. These qualitative factors come under fundamental analysis. Things like what the developers are doing, upcoming upgrades to the network, partnerships, what are the feelings of other traders and influencers’ predictions cannot be strictly used to predict any future price, but a broad range that is based on intuition and experience. A good trader will always take this news and other information into account along with the technical analysis to create a well balanced and rounded prediction before investing.
There are other factors apart from the TRON’s that a trader will also incorporate. These are mostly related to the crypto sphere and may or may not directly have TRON’s involvement, but carry their own weight and impact. These include regulatory updates, news about competitors, overall market sentiment, and any major scams or hacks.
Choose a Trading Strategy
Even with the ability to make the different analysis of TRON price movements, you cannot simply jump into the waters and start buying and selling. To make profits, you will need to have a systematic approach towards your trading. Let’s look at the most used trading strategies so you can decide on which one is most suited for you.
- Position Trading
A lot like investing strategy, position trading is the long term where a person buys a derivative contract hoping to capture the largest movements that can be made by TRON. A typical position trading can last anywhere from a few months to years.
- Day Trading
Day trading is all about placing and completing as many orders possible in a day’s stretch and liquidating all holdings before winding up. The concept behind day trading is not to leave contracts open overnight where movements in TRX prices can be detrimental. Day trading orders last from a few minutes to up to several hours.
- Swing Trading
Overall the same strategy as position trading but on shorter scales, traders open contracts in expectations of a major swing in prices. Swing trading orders can last anywhere from days to even months in anticipation of a major move in TRON prices.
- Scalp Trading
Scalping is perhaps the most intense trading strategy that is designed to capture extremely small favourable TRON movements. Over time, the small profits can aggregate into something significant enough to make it worthwhile. Scalping requires absolute attention in real-time as the trader needs to constantly look at the trading parameters and graphs.
Sign Up on an Online Broker or Derivatives Exchange
With the information you have on the different analysis, you can make future predictions and decide on the type of strategy you want to employ for profits and it is time to get down to registering on a derivatives trading platform.
You have two choices here. You can either go for an online crypto broker or a derivatives exchange. Both offer the same service more or less, but in an exchange, you will be placing your orders directly while a broker will act as a middleman and trade TRX on your behalf. Seemingly an unnecessary need of having an intermediary that only adds in cost and increases time, a broker can be pretty handy. While a derivatives exchange will treat you as a user, a broker will have a more human interaction with you. This means a broker will be able to offer you higher leverages, credit extensions and even their insights on trading.
It is your decision to select a crypto exchange or a broker that will suit your needs. With the decision made, you will need to sign up on the platform before you are able to proceed. A good and reputable trading platform will require you to go through a Know Your Customer (KYC) and Anti Money Laundering (AML) checking procedure where you will be required to submit different documentation such as your identity and funding sources to make sure you are legitimate.
Speaking of funding sources, you will have to deposit money in your trading account if you are going to buy any trading contract.
You will probably have more than one funding option in your platform, the most common of all being either a bank transfer or using your credit and debit card. You can head over to the funding option and find out which the platform supports. In case of a bank transfer, the derivative trading platform will give you their bank information, such as the bank’s name and the account number, requiring you to forward the transaction ID when you do send money over.
If you want to use your cards and the platform supports that option, you will need to input the relevant data in the fields. This includes your card number, name, expiration date and a CVV code. We advise you to ensure there is no phishing attempt against you as a scammer can use the card information to steal your money. Use only regulated platforms to reduce the risk of fraud.
Some trading platforms even support other funding methods such as PayPal and that can be worth checking out.
Open Your First TRON Trade
With money sent over, you can finally begin your TRON trading. All you have to do is select the appropriate TRON trading pair and place your order.
Check out the type of orders you can place. There are mainly three types that you will find, market order, limit and stop-limit order. Market orders only allow you to decide the quantity you will buy or sell, with the TRX market price being used to fill the order. To decide the exact TRON price you want to use in trading, you can always select a limit order, with finer control over when the order is placed through stop-limit order.
An order book is where all the placed orders which are awaiting execution are placed. An order book can be helpful in determining if there is a mounting buying or a selling pressure. Apart from this, you will find leverages, where you can increase your chances of profits without the appropriate money being locked in as the platform will give you a loan, which will be paid back when the order is closed, but you pocket all of the profit (minus the accrued interest). If the platform supports shorting, you can also use it to make profits even when there is a bearish market.
Once you’ve decided on various parameters listed above, simply click on the buy button and open your trade.
Experts Insights: Common TRON Trading Mistakes and How to Avoid Them“ TRON is also subject to the high volatility cryptocurrencies are famous for and as such, the sudden price movements can scare new traders to make buying or selling decisions that are common across the world. You need to avoid these if you wish to become a successful trader. Always check out the reputation of a trading platform before committing your money to it. A regulated platform will require you to go through the KYC regulations, but that is worth the effort as the regulated trading platform will be in compliance with laws and reduce the risk of fraud. Never give in to FUD or FOMO in your trades. Trust your analysis and strategies to do the job for you. If you think your selected strategy is not panning out initially, don’t worry. That should not mean that you shift over to another strategy. The inconsistency will only mean more losses. ”
Our Favourite Platforms to Trade TRON
We can help fast track your TRON trading by cutting down your time on finding regulated derivative exchanges. Some of the best TRON trading platforms are listed below.