Are you considering trying XRP trading for the first time? Let’s help you with that.
Trading Ripple (also known as XRP) could be for you. Our educational guides will teach you how to get started trading Ripple, and give you a breakdown of all the factors you need to consider when entering the cryptocurrency market.
Compare the best platforms for XRP trading
If you feel ready to trade ripple, check out the table above. Need more to do research first? Then keep reading.
Before trading Ripple/XRP, there are a few key things to know about. We’ll take you through all the steps you need to go through. Alternatively, if you’re just looking to buy Ripple’s XRP token as fast as possible without trading, read the buying guide here.
What do I need to trade Ripple?
A good knowledge base is the most important when it comes to trading any cryptocurrency, and it’s not different when it comes to XRP trading. Get to know the key terms and principles that go with online crypto trading, as well as the history of Ripple’s price performance. That way you’ll have an idea if it’s the crypto for you and have a handle on the basics of how to trade cryptocurrencies, including Ripple.
Here are three key services that can be used for XRP trading:
- Exchange – A cryptocurrency exchange allows you to trade Ripple in multiple ways. You can trade Ripple as part of a pair of cryptocurrencies (such as with Bitcoin) or with a traditional fiat currency (such as U.S. dollars or British pounds). Exchanges are best reserved for more experienced traders, as they’re typically more challenging to navigate than other trading methods.
- Broker account – A broker account is any account you can open which allows you to facilitate investments, be that holding shares or actively trading cryptocurrencies. There are many variations with minor differences. However, the most important thing to know is: A CFD (contract for difference) broker allows you to trade assets without actually owning them. This means that you can trade XRP, but you wouldn’t be able to withdraw and spend the ripples. Rather, you’d withdraw profits in your local currency.
- Wallet – A crypto wallet stores the keys used to receive, spend, and track ownership of cryptocurrencies such as Ripple. A crypto wallet can come in multiple forms, including digital device, program, or service. If you’re trading a significant amount of Ripple, a crypto wallet offers a higher level of security than if you simply kept your Ripple’s custody with the exchange on which you’re trading it.
Should I trade Ripple?
That’s up to you. Like other cryptocurrencies, Ripple can prove to be a big money maker or a financial mistake depending on how prepared you are. Check out the educational cryptocurrency guides on this site so you can be best positioned to profit from XRP.
If you don’t feel ready to invest real money into Ripple trades yet, many trading platforms will let you trade using a demo account, which can help you get used to trading without risking losses before you truly know what you’re doing. These are a great tool and we recommend beginner investors use this option to learn the ropes.
What is the best way to trade Ripple for a beginner?
Seeing as they avoid the need to buy and store your XRP yourself, CFD platforms are usually the best place to start. The biggest advantage that CFD trading offers is that you own a contract representing Ripple ownership, without owning actual XRP coins. That means you don’t have to worry about both the hassle of storing your coins and keeping them secure, but can still make money from trading Ripple.
When trading Ripple through a CFD broker, one option at your disposal is to trade with leverage. Trading with leverage means that you can make large trades while only putting down a small percentage of the overall trade amount. How deeply leveraged you choose to be can swing from smaller leveraged positions (such as 2x or 5x the size of your stake) to much larger ones (up to 100x the size of your own stake, or more).
With leveraged trading, if you guess correctly on the direction of your leveraged Ripple trade, then your profits will be higher. The problem is that leveraged trading can also produce big losses when you guess wrong – particularly in volatile crypto markets such as Ripple’s. We don’t recommend that beginner investors trade with leverage because of these risks, but it is an option opened to more seasoned traders.
How to trade XRP using a broker
To trade Ripple/XRP CFDs, you’ll need to find an online broker who offers this as a trading option. You’ll find reviews of all the top platforms for this kind of trading on our site, and once you have selected a platform just follow these steps:
1. Open an account with your broker
Choose a crypto broker that offers a simple and secure platform, as well as narrow price spreads. Fill in your contact and security information to confirm your trading account, as you would when opening an online account for a bank. You’re now on your way to trading Ripple online.
2. Deposit funds into your account
Depending on your broker’s guidelines and limitations, you can make deposits by debit card, credit card, PayPal, bank transfers, or all of the above. If you have a specific deposit method in mind, then make sure that your selected broker can facilitate this before you sign up.
3. Plan your Ripple trading strategy
When trading Ripple, you’ll be better placed if you have a trading strategy in mind. Here are four ways to execute trades of Ripple for you to consider.
- Day trading. This is when you buy and sell Ripple on the same day. The goal in this case is to land a quick profit, sometimes even in a matter of minutes. To day trade or swing trade successfully, it pays to learn how to read charts, a practice which is also known as technical analysis.
- Swing trading. Swing trading is a short-term trading strategy, but one that takes place over a longer time period than day trading. When swing trading Ripple, you’re usually looking to hold the contracts for the coins for several days before cashing out. This will attract overnight fees, but the goal is to profit from the price swings that can occur during that period.
- Scalping. The goal when scalping is to take advantage of market inefficiencies and differences in the prices offered by brokers to produce profits. Examples of scalping are arbitrage and spread scalping. In arbitrage you’re looking for discrepancies between the bid and ask spread of two different brokers, then taking advantage of that discrepancy to bank a gain. Spread scalping is the same concept, but with the same broker. Scalping tends to produce small gains, so you’ll need to pull these trades off regularly to see significant gains in your capital.
- Automated trading. Also called robot trading, automated trading takes away the human touch, substituting in computer-generated algorithms to tray and stay ahead of the market. Ripple trading is driven by technical indicators and statistical arbitrage, which the software tries to analyse faster than humans can. It is worth noting that not all robots are legitimate, so be careful before trusting them with your money.
Each of these Ripple trading strategies offers different advantages, and which one(s) you want to use will depend on your individual goals. If on the other hand you’d prefer to buy and hold Ripple for a long time, you’d be better off using an exchange (which we discuss in detail below)
4. Place your first Ripple trade
You’ve done your research on Ripple trading, picked a crypto broker you like, deposited money into your trading account, and selected the type of trading you want to pursue. Go ahead and make your first trade!
That was easy, what should I do next?
Keep studying, so you can improve your trading skills, and move onto more complex trading methods. When it comes to crypto trading, staying on top of the news and improving your knowledge is essential to generating profits. To learn more about trading strategies and managing risk, check out all of our crypto trading articles on this site.
If you want to own the coins you buy directly, then you’ll want to use an exchange. Trading Ripple/XRP on an exchange can be harder to navigate, harder to make deposits, and harder to understand. If you’d still like to try exchange trading, read our online guide on exchanges for Ripple trading first.
How to trade Ripple using an exchange
If you’re looking to buy and trade Ripple but don’t want to use CFDs, your other option is to trade it on a crypto exchange. Exchanges are essentially online marketplaces where a large number of users are buying and selling cryptocurrencies in real time. Here’s what you need to know before you start trading Ripple through an exchange:
1. Decide which exchange you want to use
Some of the most important criteria for selecting an exchange to trade on are the fees it charges (either for trades or deposits/withdrawals) and the choices available to crypto traders. Some exchanges allow you to buy just a few cryptocurrencies using fiat currency. Others offer more trading options, including trading a wide variety of crypto pairs that include XRP.
2. Set up an account
To open an trading account you must provide contact and identity verification, and link to an accepted method of deposit. We discuss the different deposit methods you can use to set up a XRP trading account below.
3. Select which cryptos you want to hold and trade
Many (but not all) crypto exchanges will allow you to trade Ripple. When you trade Ripple, you do so in crypto pairs such as Ripple with Ethereum (XRP/ETH), Ripple with Bitcoin (XRP/BTC), and Ripple with British pounds (XRP/GBP). Ripple is one of the most traded cryptocurrencies, so you will usually find a very wide variety of currency pairs you can trade.
4. Place your trade
When it comes to placing your trade, these are the options you’ll usually have:
- Buy order. This is when you buy some number of crypto units, such as a number of XRP coins, either at the current market rate, or at a rate that you put in yourself if you expect the price to fall in the near future.
- Sell order. This is when you sell your Ripple to other users on the exchange. The goal here is either to make a profit or to cut your losses.
- Put/call. When trading Ripple options, you can bet on the XRP price either going up (a call) or going down (a put). You’re buying a contract which gives you the option to buy or sell Ripple at a specified strike price, before or by a certain date.
- Market order. This is when you want to buy Ripple immediately, at the current market rate determined by the exchange.
- Limit order. This is when you want to buy Ripple, but only up to a certain price (called a limit). Your account will buy the coins but automatically stop if the price rises above the specified point.
- Stop-loss order. This is when you buy a cryptocurrency such as Ripple, then put in an order to limit the size of your loss by specifying a price point at which all your XRP should be sold. If you buy Ripple at 19 cents and put in a stop-loss order at 17 cents, your goal is to limit the size of your loss to roughly 10%.
5. Receive your coins
When you have bought your Ripple/XRP the coins will be credited to your exchange account, which functions as an online crypto wallet that can hold your coins so they can be easily traded on the exchange.
6. Transfer your coins to a separate wallet
If you’re not planning on trading the XRP you have bought in the near future, then we recommend transferring them to a personal wallet in the interest of keeping them secure.
Which exchange should I use to trade Ripple?
Simply follow the links below that will take you to the best exchanges to trade Ripple right away. If you want more information, you can also find reviews of all these platforms on our site.