Litecoin is often coined as digital silver, next to Bitcoin as digital gold. Like Bitcoin, the cryptocurrency has a scarce supply and can act as a store of value or means of transacting across cyberspace cryptographically.
Those who were able to invest in Litecoin early made a fortune as early adopters, but over the years, the volatile cryptocurrency has struggled as an investment and has been an asset better suited for trading. Those that trade Litecoin instead make more money consistently from the crypto market over the last two years.
However, LTC trading for USD and other cryptocurrencies like BTC isn’t easy and takes some skill, education, and patience. Using this guide, we’ll explain how to get started trading Litecoin on the award-winning CFD trading broker PrimeXBT and provide profitable Litecoin trading strategies that have been backtested for success.
Litecoin is one of the earliest cryptocurrencies, built on Bitcoin’s code. Because it closely mimics Bitcoin, is considered one of the more robust blockchain networks, and is regularly used as a testbed for new second-layer Bitcoin code.
Unlike fiat currencies that can be printed at a whim, Litecoin is hard-capped. There are only 84 million LTC compared to Bitcoin’s 21 million. Litecoin also shares similar economics and the same block reward halving mechanism taking place approximately every four years. For those that use Litecoin instead of hodling, it is much faster to send compared to Bitcoin.
Because Litecoin’s price being small relative to the larger supply compared to its big brother Bitcoin makes Litecoin easier to swallow for new investors getting into crypto who want to own a full coin and see BTC as too expensive. This could benefit Litecoin in the next bull market, now that it was the cheapest coin included in the list of assets that PayPal would be supporting in the future.
Litecoin has survived a long time in the crypto market and remained one of the top-ranked altcoins by market cap. Because of the coin’s longevity, holding Litecoin has long proven profitable. But over the last several years, as a bear market took over crypto, Litecoin trading has proven more profitable.
Becoming a Litecoin trader instead of an investor involves strategizing to buy and sell Litecoin at higher and lower prices and profit from the fluctuations in between or place bets on whether its price will increase or decrease.
Investors who bought LTC in late 2017 without considering any market analysis or price movements were left hodling Litecoin while its value shrunk by over 90%.
Meanwhile, Litecoin traders were able to make money from the powerful price movements that took place in Litecoin markets over the last two years.
There are two primary ways to trade Litecoin and other cryptocurrencies: on a spot exchange that offers buy and sell orders of an underlying asset or through derivatives like CFD trading that lets traders long or short contracts instead and profit whichever ways markets turn.
On a spot exchange, you can only buy low and sell high to turn a profit, while short and long positions on a trading platform like PrimeXBT combined with careful market analysis can be much more profitable by finding opportunities in both directions.
Trading Litecoin offers more opportunities than investing or hodling alone, but some are confused about how to get started. Here is a Litecoin tutorial to get you started in setting up your first LTC trade from start to finish.
Using PrimeXBT’s professional technical analysis software, traders of all skill levels can draw support and resistance lines, utilize indicators and oscillators like the MACD, Bollinger Bands, RSI, and much more to put together a strategy that considers risk and reward before entering a position.
After critical levels have been identified, users can market long or short, or set a limit order to wait for the ideal entry, and begin profiting from whichever way they expect the market to turn. Traders will want to be careful where stop-loss levels are placed to avoid getting stopped out while also ensuring capital is protected.
Stop loss orders or take profit levels can be added to orders at the time they are placed or afterward and can be amended in case any mistakes are made or conditions change. Traders can also manage these positions on the go, thanks to PrimeXBT’s free mobile app for Android and iOS smart devices.
Litecoin, like other cryptocurrencies, trade every single day of the year, whether it is a holiday, weekend, or otherwise. The crypto market never sleeps and is always on and trading 24/7, 365 days per day.
This makes investing or hodling that much more stressful and trading even more lucrative over traditional markets. Sleeping overnight in a position is never recommended unless you can stand to lose all capital, but by day trading Litecoin instead with PrimeXBT, traders can hop in and out of positions with long or shorts and close out each day when they are ready to rest their head down at night and sleep comfortably.
Litecoin has a very limited supply of just 84 million LTC with even less circulating. As the monetary supply increases and inflation runs out of control, the LTC supply never will. For example, Litecoin was just announced as one of four cryptocurrencies that PayPal will offer its 346 million customers in the near future. If every PayPal customer wanted to own Litecoin, there would only be 0.24 to go around equally, and as wealth distribution has shown in the past, there is no such thing as equality.
When demand rises for the digitally scarce asset, much like the precious metal silver and its scarce supply, prices surge. Silver is climbing again now under the recent economic distress, and Litecoin jumped 20% at the PayPal news. Is it Litecoin’s time to shine once again?
For those that are tired of hodling Litecoin and being on the losing side of markets for too long, consider trading Litecoin instead using one of these effective Litecoin trading strategies. These tools can be used to trade any asset, but examples of LTC pairs are included to demonstrate how this works for Litecoin, specifically.
The Bollinger Bands expand and contact to indicate volatility across price action, but it can also be used as a reliable long or short signal when price passes through and closed above or below the middle-BB line.
The middle line is a moving average of price action and can indicate when a trend change is about to pick up in steam. If the move above the middle line arrives after a contraction, and the outer bands begin to expand, a large move will result.
In the example below, Litecoin was a short and a long each time the asset passed through the middle BB.
The Ichimoku indicator is a very busy screen to look at, with so much going on. There are clouds, lines everywhere, and a lot of confusion. But in the mess there are plenty of signals explaining whats going on in the market.
The most standard and obvious of signals, is a simple crossover of the tenkan sen and kinjun sen lines (red and blue). When the two cross above or below one another, it is either bearish or bullish, and issues a signal to short or long an asset, as is demonstrated in the LTC chart below.
The MACD is a momentum indicator, but is often disregarded as “lagging.” However, Litecoin traders that disregard this tool do so at their own expense.
The MACD crossovers can be ultra reliable signals to short or go long on Litecoin, Bitcoin, or any asset for that matter. Notice that after crossing down, crossing back up was the long signal. Traders can keep profits going by trading back and forth this way.
But because there is some truth to the MACD as a lagging indicator, be certain to consider other market conditions and confirm signals with chart patterns or other signs.
OBV is called the smart money indicator for a good reason. It can help spot trend changes before they happen.
Note in the example below, Litecoin broke out from its downtrend in OBV before price did, and then did the same again when the uptrend ended and began to break down. The On-Balance Volume indicator truly proves that volume really does precede price.
Trading Litecoin can be profitable enough, given the asset’s wild volatility and large price increases and decreases that users can take advantage of using CFD trading on PrimeXBT with long and short positions.
But there is another tool PrimeXBT offers that can grow capital even faster and make the above strategies even more profitable. But beware, this method is only for skilled traders who are capable of managing against risk. The tool is called leverage and is only offered on margin trading platforms. Leverage amplifies price movements by up to 100x, maximizing return and turning small positions into massive ones.
Because Litecoin and cryptocurrencies are a new, emerging technology and asset class, even the smartest traders commonly have questions. Here are some of the most frequently asked questions about Litecoin, LTC trading, and crypto.
Litecoin is a cryptocurrency that is built on a modified version of Bitcoin’s code. The blockchain and economic structure are very similar and even have the same block reward halving mechanism every four years.
Investing in Litecoin has proven profitable in the past, but over the last two years of the bear market prices have mainly been falling. Even if things are turning around, trading Litecoin is the better option, as traders can profit whichever way Litecoin turns and make money both directions.
Trading Litecoin is the simple answer. Utilizing technical analysis and careful risk management, traders can profit from markets on platforms like PrimeXBT.
Litecoin trades under the LTC ticker symbol against USD, BTC, or other fiat currencies and cryptocurrencies.
Litecoin trading is common these days, but the best and safest platform to trade Litecoin is on the award-winning PrimeXBT. Litecoin is available alongside other cryptocurrencies, stock indices, gold, silver, oil, gas, and much more.
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