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All what you need to know about trading Dogecoin

One of the world's most widely used cryptocurrencies, Dogecoin, is rapidly gaining popularity. Learn more about this cryptocurrency, how to trade it and the most effective trading methods.

Dogecoin (DOGE): What is it?

"Dogecoin (DOGE) is an open-source peer-to-peer currency. It is a cryptocurrency enabled by blockchain technology, to put it another way. It is also one of the world's best-known "altcoin" currencies (an alternative to more established cryptocurrencies like bitcoin and ether). Dogecoin is best known (and loved) for its dedicated fanbase, social media buzz, and ability to establish itself in popular culture."

An overview of the Dogecoin story

Jackson Palmer and Billy Markus, who were looking to leverage Blockchain's peer-to-peer features by developing a community-centric cryptocurrency, officially launched Dogecoin in December 2013 in the US. While this all sounds extremely serious, Palmer and Markus have stated in the past that they launched Dogecoin to take on the cryptocurrency behemoth Bitcoin in a playful way. So, they decided to make the famous canine mug "Doge" the face of their company. Dogecoin, the first "meme cryptocurrency", was created. Dogecoin used social media sites such as Twitter, Reddit and TikTok to quickly promote its new currency. The cryptocurrency has shown its ability to manipulate popular culture. Some of its best-known marketing tricks include supporting a SpaceX mission and sponsoring the Jamaican bobsled team at the 2014 Winter Olympics as a nod to the film Cool Runnings. In fact, Elon Musk proposed sending Dogecoin as a real currency "to the moon".

How do I trade or short Dogecoin on Plus500?

You should short Dogecoin if you expect the price of Dogecoin to fall in the near future. By doing this, which is the equivalent of selling a CFD (as opposed to going long or "buying"), you have the opportunity to gain if the price of Dogecoin falls or lose if it rises. The procedure for shorting Dogecoin with us is as follows:

1. Create an existing account or open a new one for CFD trading in Plus500.
2. Open the CFD trading platform, then use the search panel to find "Dogecoin".
3. Select your bet size from the trade ticket.
4. In the trade ticket, select "sell", then confirm the trade.

Since the potential for loss is potentially unlimited in a short sale, it is essential to manage your risk. Indeed, the price of an asset can rise indefinitely in the market, so you must constantly ensure that you are trading within your means.

How to track the price of Dogecoin?

Knowledge of the market you are speculating in, as well as its patterns and trends, is essential for effective trading, as it allows you to predict its movements accurately. Therefore, it is very important to analyze the price movement using technical and fundamental analysis.

Strategies to trade Dogecoin

Despite the fact that Dogecoin is still a relatively young market, there are many trading methods available that are specifically designed for cryptocurrencies in general and Dogecoin in particular. We'll look at some of the trading techniques that seem to be trending at the moment and are currently being used by many Dogecoin traders. However, keep in mind that there is no single approach to trading strategies. You must carefully examine each one to ensure that it is consistent with your trading philosophy and goals. You should constantly "backtest", comparing past chart data with a trading strategy to see if what the strategy predicts or suggests has actually happened on the Dogecoin chart. Here are some more focused Dogecoin trading strategies:

• Simple Moving Average: Utilize SMA lines to identify buy and sell signals.
• RSI Divergence Method: Use RSI indicators to identify overbought or oversold conditions.

FAQ

• Is Dogecoin suitable for newcomers? It is not possible to answer this question directly with a yes or no. Some individuals will be wise to invest in Dogecoin, while others will not think it is a good idea. There is a danger to investing, as there always is. Cryptocurrency prices can change dramatically in seconds.
• Is Dogecoin a wise investment? While the idea may be entertaining, Dogecoin is not a wise investment. It does not contribute to the value of a financial system, like Ethereum, nor does it derive value from another asset, as stablecoins do. Besides its entertainment value, Dogecoin's community is its greatest asset.
• How to best trade Dogecoin? The best approach to trading Dogecoin is to use the CFD market with a popular broker like Plus500, avoiding the difficulties of custody and all the inconveniences associated with wallets, unless you intend to "buy and hold". In addition, as you can earn on both an increase and decrease in price, this presents additional profit opportunities. Leverage increases the potential for profit.
• Can I buy Dogecoin directly? It is possible to buy Dogecoin on some exchanges using US dollars and other fiat currencies, but this is normally done through a CFD or broker.
• Can I get money for my Dogecoins? Theoretically, yes. Therefore, when you withdraw your money, the digital transaction must be converted to fiat currency.