The Ripple cryptocurrency is one of the most popular digital coins amongst traders. As of March 2019, it’s also the third most valuable cryptocurrency. If you compare Ripple to Litecoin, the fourth most valuable cryptocurrency, Ripple has a market cap nearly three times larger at over $12 billion. So how does Ripple work, is it worth investing in, and how does one go about trading it? This article briefly explains how to get started trading Ripple in just a few steps.
Understand exactly what Ripple is and isn’t
What is Ripple? Well, for a start, Ripple is not really a cryptocurrency. It doesn’t operate on a blockchain and its network is not run by decentralised computers or miners like most cryptocurrencies. In fact, the digital tokens most people refer to as Ripple are actually called XRP. They are used to transfer value between institutions using a technology called xRapid which is owned by a company called Ripple Labs.
For this reason, Ripple/XRP is somewhat controversial within the crypto community. Another criticism is the fact that Ripple Labs still owns the majority of the XRP that have been issued.
Nevertheless, XRP does offer a compelling solution for banks to transfer large amounts of value quickly and cheaply. Every day billions of dollars are transferred between institutions around the world, and to date, no one has offered a better solution than the current slow and expensive processes.
XRP and xRapid are being tested by numerous banks around the world, and so far, Ripple has more traction than any other cryptocurrency in the banking industry.
Manage Your Investment
In the crypto market, and in fact any market, buying is the easy part. Deciding when to take profits, hold, or cut losses, is what ultimately determines how much you will make. Most newbies take profits too early and don’t cut losing trades early enough.
This is when discipline comes in. If you are aiming for a certain profit target, be patient and hold out for that target. However, if new information invalidates your strategy, or if you are clearly wrong, it may be time to cut your position and move on to the next trade.
Another mistake people make is entering a trade as an investor, and then deciding they are a trader when things don’t go according to plan. Always stick to the same strategy and exit the trade based on the same strategy you used to enter it.
Now that you know what XRP is, and how to get started, it’s time to start following its chart, reading up more on current market sentiment, and getting set up to make that first trade.