A Primer On Trading ETH Against Google
Are you a fan of Ethereum? Do you wonder what Ethereum hodlers search on Google Maps? Well of course they search for how to get to the moon. “To the moon!”…get it?
If you don’t, then maybe by the end of this article you will. Because we are going to talk about trading Ethereum vs Google. No, it’s not a battle between Ethereum and Google but a discussion on possible ways to trade the two assets.
And if you are still wondering what “To the moon!” means, then you should know that it is a popular phrase among the cryptocurrency community for expressing optimism about the price trend of a cryptocurrency.
Elon Musk made the slogan even more famous by using it multiple times in his tweets about Dogecoin. We won’t be using slogans in this article.
Instead, we will discuss what trading a crypto and stock pair really means, what drives the prospects of Ethereum and Google, and what could be possible strategies to trade these assets via a CFD.
CFD stands for “contract for difference”. It is a leveraged instrument that allows you to amplify your profits. But, if the market moves against you, your losses can also blow up. So, we will conclude the article with a brief discussion on risk management.
Sounds good? Then let’s go!
Trading Crypto vs Shares
Trading one asset vs another is an interesting concept. However, it is not a new one as every forex trade is one currency vs another.
When you trade the US dollar, you trade it against some currency. It could be the Janapense Yen, the British Pound, or the Swiss Franc.
When someone tells you an exchange rate, it is the amount of one currency needed to buy one unit of another currency. A USDJPY exchange rate of 130 implies that 132 Japanese Yen are needed to buy one US dollar.
In a pair, the first asset is the base asset (USD) and the second asset is the quote asset (JPY).
Now apply the same concept to crypto vs shares. In the case of Ethereum vs Google, Cerus Markets offers a CFD called ETH/GOG. So, here the base asset is Ethereum and the quote asset is Google stock. The value of ETH/GOG effectively indicates the number of Google shares needed to buy one Ethereum coin.
If you go long ETH/GOG, you either believe that Ethereum will rise faster than Google or Google will fall faster than Ethereum. These two extremes also include possibilities like Google staying flat while Ethereum rises a little bit.
Another possibility could be Google falling while Ethereum stays flat. The idea is that the ratio of Ethereum to Google would rise – which is why you are long.
The same thing applies to the short trade. If you are short ETH/GOG, then you believe that Ethereum will fall faster than Google or Google rises faster than Ethereum. All possibilities of sideways/flat movements as was the case with the long trade also apply in reverse for the short trade.
Getting To Know ETH and Google
If you are going to trade an instrument that has Google and Ethereum in it, then you probably want to know the fundamentals of both assets. You want to know what could drive the prospects of Ethereum and Google.
For Google, its earnings are the main driver of the stock price. Earnings are primarily driven through ad revenues. Ad revenues, in turn, depend on how much people use Google and for how long.
Google’s cloud computing services are also an important revenue generator. One of the key threats facing Google lately is artificial intelligence. You must have heard of ChatGPT. It is emerging as a key competitor to Google.
Other search engines and platforms are also competitors for Google.
Ethereum was created with a focus on dApps (decentralized apps). So, the demand for dApps directly impacts the demand for Ethereum’s network and its coin.
Any changes in Ethereum’s underlying technology which increases its speed and capacity is also an important trend. Currently, Ethereum is undergoing a major upgrade.
Ethereum, however, faces competition from Polkadot, Cardano, and Cosmos ATOM. The price of cryptocurrencies also varies significantly due to fund flows and sentiments.
Strategies for Trading ETH Against Google
If you are looking to trade ETH/GOG, then you will want to first check the price action of the two assets. Ethereum is currently in an uptrend and trading above its 200-day moving average. The moving average is also gradually sloping upwards.
(source: cerusmarkets.com ETHUSD daily chart with 200EMA)
The chart for Google shows sideways movement in 2023. However, the price is close to a resistance level. It could either reverse and move back down or it could break out.
(source: cerusmarkets.com GOOGLE daily chart)
There are a few strategies that one can deploy when trading Ethereum vs Google. Traders can use moving averages of various periods to look for crossovers.
Alternatively, starters could use the Bollinger band indicator to generate entry and exit signals. Discretionary traders can simply study the price action, use trendlines, and add other indicators to look for high-probability trades.
CFDs are leveraged instruments. Even if they weren’t, it is important to manage risk while trading. You don’t want to blow up your account and lose all your trading capital.
If you think that is not possible, then please understand that one wrong trade that is overleveraged can wipe out most (if not all) of your capital.
Define your losses, understand the risk-reward ratio of each trade, and size your positions accordingly. Use stop losses wherever you need to and make use of the alerts feature that Cerus Markets offers.
The goal is to preserve and protect your trading capital. If you can do that consistently, then your wins can help you grow your capital.
You will now have a good understanding of how to trade ETH against Google. If you feel ready to begin trading crypto vs shares, then sign up with Cerus Markets. Our 100% welcome bonus offer is currently available to all new sign-ups.