How to Buy Dogecoin (DOGE) – Easy Tutorial


How do you buy dogecoin (DOGE)?

There are mainly two ways to trade Dogecoin. It’s the same as trading cryptocurrencies in general. You can either speculate on the price development of the cryptocurrency through CFD trading or buy Dogecoin directly on the stock exchange. Depending on which trading platform you choose, different ways of trading Dogecoin are offered.

1. Buy Dogecoin directly on a stock exchange

By buying Dogecoin directly on an exchange, you become the owner of the currency, which is then stored in a virtual wallet or wallet.

The transaction is then included in the blockchain. You also get a public and private key to the transaction.

The private key serves as proof and is then used to sell the cryptocurrency. Depending on whether the price of Dogecoin has gone up or down when you choose to sell, you can make a profit or loss on your investment.

2. Trade Dogecoin through CFD trading

Trading in CFDs means that you speculate in the market prices and price movements of DOGE as the underlying asset to the CFD contract.

This means that you never own the cryptocurrency. Skilling is one of the few brokers that offers CFD trading with Dogecoin as an underlying asset.

By speculating in the price, you can make money on both an ups and downs depending on which position you choose.

What is Dogecoin?

Dogecoin (DOGE) is a cryptocurrency created by the two engineers Billy Markus and Jackson Palmer in 2013. The idea with the cryptocurrency was that it would stand out from the crowd and make investments something exciting.

They created a payment system that would be fast, fun and free of charge – unlike most other banks and payment systems.

If you only look at the logo of Dogecoin, you can recognize the dog from the famous Doge meme that is available on the internet.

In fact, Dogecoin started as a joke with the hope of showing that other cryptocurrencies could be as big as Bitcoin.

Dogecoin, on the other hand, got a lot of attention and quickly turned into a real cryptocurrency that people could invest in.

Doge is based on Litecoin, but quickly developed into its own cryptocurrency and reached a market value of 59,8 million dollars just one year after launch.

Today, millions of people have invested in the cryptocurrency and it is growing in popularity every year.

This is how Dogecoin works

Dogecoin is based on the cryptocurrency Litecoin and uses a script technology as an encryption algorithm for transactions.

Unlike Bitcoin, Dogecoin does not have a maximum amount of monetary units. Instead, the cryptocurrency reaches its maximum growth volume at 100 billion units.

Like other cryptocurrencies, DOGE can be tracked via blockchain. In this way, users can buy and sell without the intervention of an intermediary.

By investing directly in the cryptocurrency, you can create one or more dogecoin addresses that are collected in virtual wallets.

The address in turn has a private and a public key. The private key is used to send money from the address.

Important to consider before you start trading Dogecoin with CFDs

Before you start trading CFDs and Dogecoin, it is important that you understand how trading and the market work. It is important that you understand what can affect trade and how.

CFD contracts can also be traded with leverage, which means that you get a greater exposure than your initial bet.

There is therefore a risk that very small market movements can lead to you losing capital quickly.

DOGE has historically had very volatile market movements, which means that you can lose a lot of money in a short period of time.

Step-by-step guide: How to trade Dogecoin through CFD trading

  • Create an account
  • Select Dogecoin
  • Choose a position in the market
  • Select automatic stop loss and limits
  • Monitor and close your position

Through CFD trading, you can speculate in the market price of Dogecoin and its price development instead of investing in the currency directly.

Usually then DOGE is set against another currency.

With CFD trading, you then change the difference in the market price from the time you open the position until you close it.

Step 1: Create an account

The first step is to create an account on the trading platform on which you have chosen to conduct your trading.

Different trading platforms offer different offerings in the underlying financial instruments for CFD trading.

Since you do not invest directly in the cryptocurrency, you do not need to create a wallet, but an account with the broker or trading platform is enough.

Step 2: Select Dogecoin

Once you have created an account, you can start your trade. You then select the underlying instrument that you want to speculate on.

Then select Dogecoin if you want to speculate in the cryptocurrency’s price movements.

Step 3: Choose a position in the market

In the next step, you will decide which position you want to take in the market. If you choose a long position, it means that you make a profit if the price of DOGE has gone up when you close your position.

If you choose a short position, you will instead make a profit if the price of DOGE has decreased when you close your position.

Step 4: Select automatic stop loss and limits

Before opening your position in the market, you should activate the stop loss function.

This reduces the risk of CFD trading and limits your potential loss.

Cryptocurrencies are very volatile financial instruments and can fluctuate sharply. The feature is offered on most trading platforms.

Step 5: Monitor and close your position

Monitor your position while it is open and close it by opening a position in the opposite direction when you have finished your trade.

How is Dogecoin different from the other cryptocurrencies?

Like Bitcoin and the other cryptocurrencies, Dogecoin is a digital currency that you can use for transactions and investments.

Something that makes Dogecoin stand out is that DOGE is an inflationary crypto, instead of a deflationary crypto.

When a cryptocurrency is inflationary, it means that there is no limit to how many coins are circulating in the market. This is positive for investors as Dogecoin is not limited as other coins are.

Bitcoins, for example, are limited, which will ultimately affect those who mine (break down) Bitcoins. You can avoid this with Dogecoin.

Why has Dogecoin increased so much?

The reason why Dogecoin became a real cryptocurrency and increased in value was because of the attention it received on social media and on the news.

More people started talking about the cryptocurrency and chose to invest. Thanks to the spread online, the credibility and interest among investors also increased.

The news plays a big role in why Dogecoin has become so popular today.

Elon Musk has on several occasions spoken positively about the cryptocurrency, which was noticed by many Reddit users and ended with Dogecoin increasing by as much as 801% in January 2021.

Musk is known for being active on Twitter with his opinions, which has major consequences in the crypto market and drives prices up.

The same thing happened with the Tesla shares and not least with his Bitcoin investment which pushed the Bitcoin price to new heights.

On May 8, 2021, Dogecoin reached its highest value to date and it is thanks to famous people like Gene Simmons, Elon Musk and Snoop Dogg tweeted positively about the currency. Today, however, the Dogecoin price is at 0.220772 dollars.

3 factors that have historically affected Dogecoin’s price development

Like other cryptocurrencies, it is difficult to predict DOGE price movements and what actually affects the price.

The cryptocurrency has fluctuated sharply over the past year and there are some factors that have historically been shown to influence.

1. News

News linked to the cryptocurrency has also on several occasions during the year made more people choose to buy the currency.

DOGE was mentioned in several contexts and part of the price development is believed according to several articles to have been due to the American basketball team Oakland Athletic’s announcing during the period that they sold match tickets for 100 DOGE.

2. The popularity of cryptocurrency

Like Bitcoin’s development, Dogecoin’s development may also be due in part to the fact that cryptocurrency has generally become more mainstream than before.

More and more trading platforms also allow trading with Dogecoin, which makes it more common and easier to trade with than before.

3. Social media and forums

Things that are written on social media and in forums have been shown to affect the price development of cryptocurrencies and also Dogecoin.

As I have mentioned before that Elon Musk on several occasions tweeted about, among other things, Dogecoin, which has led many to become interested in the cryptocurrency and that the price together with the volume gradually rose during the spring.

Several threads on Reddit have also frequently written about Dogecoin, which has affected the price development historically.

What is a Dogecoin Wallet?

To buy DogeCoin online, you first need to get a “crypto wallet”, also called a cryptocurrency wallet.

There is today a large selection of Dogecoin wallets and these come with both advantages and disadvantages. The best thing you can do is decide on a cryptocurrency, open an account and shop through it.

Depending on whether you only plan to trade with Dogecoin or if you want the crypto wallet to be able to contain other cryptocurrencies, there are several different ones to choose from.

DOGE: Frequently Asked Questions (FAQ)

For more information about Dogecoin, please read my FAQ section.

When it comes to cryptocurrency trading, it is important that you have the right knowledge.

My goal is to make it easy for you to buy Dogecoin and understand how to best do this.

1. Do you have to pay tax on your winnings with Dogecoin?

Yes, you have to pay tax on your winnings as you do with Dogecoin. I don’t know what the percentage is in your country but in Sweden it’s 30% tax, and you must declare your winnings.

(For all my swedes out there, there is information on the Swedish Tax Agency’s website about how this works).

2. What are the risks of buying Dogecoin?

As with all other cryptocurrencies, there are risks in buying Dogecoin. There is a risk that you may lose your investment, but there is also a chance that you may make money.

When you buy Dogecoin, it is important that you understand how the market works, which gives you a greater chance of making money.

3. Is Dogecoin a secure cryptocurrency?

Yes, it is both safe and legal to buy Dogecoin.

4. How Much does a Dogecoin Cost?

The price of Dogecoin may change from day to day, but the day of writing this it is at 0.15 USD.

Conclusion

Summary – Should you invest in Dogecoin?

Dogecoin can offer an interesting opportunity for investors who want to try something other than the classic cryptocurrencies.

The coin has been very popular in the media, which has led to a marked increase in popularity. There is thus much to suggest continued continued growth.

Remember, however, that Dogecoin is extremely volatile, which means that the price can fluctuate sharply in one day. This can mean the opportunity for a high return, something that active day traders can use to their advantage.

However, it also involves great risks. Thus, one should only be well aware of the risks before investing and never invest more than one is also willing to lose.

Sources

https://tradingstrategyguides.com/free-dogecoin-strategy/

https://ieeexplore.ieee.org/abstract/document/9548590

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3091219

https://ruor.uottawa.ca/handle/10393/42016

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3306060

https://arxiv.org/abs/1908.03999

https://www.tesionline.it/tesi/economia/the-gme-squeeze-and-the-dogecoin-rally-how-social-media-can-affect-stock-and-crypto-markets/56053

https://www.researchgate.net/profile/Priyanka-Harjule-2/publication/354931039_Prediction_of_dogecoin_price_using_deep_learning_and_social_media_trends/links/615556dc63675972d2a4f1ee/Prediction-of-dogecoin-price-using-deep-learning-and-social-media-trends.pdf

Kevin

This article has been reviewed by our editorial board and has been approved for publication in accordance with our editorial policies.

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