Dogecoin (DOGE) has evolved from a digital currency initially regarded as a meme currency with a cute dog symbol created by Billy Markus and Jackson Palmer into a prominent asset. Moreover, the DOGE acronym also refers to the Department of Government Efficiency, overseen by Elon Musk. Notably, it has been established within the US administration. The asset’s current liquidity, in conjunction with the influence of Tesla’s CEO, positions Dogecoin as a noteworthy trading asset.
This article provides practical tips for Doge trading, covering topics from registration and trading basics to an analysis of trading systems. In summary, you will find comprehensive guidelines that include backtesting of strategies over several years and all the necessary steps to generate profits. In addition, you will gain valuable insights into the best strategies for trading and pro tips to help you trade DOGE.
Major Takeaways
- Dogecoin is a cryptocurrency that tends to exhibit trends that are common to all other altcoins. Therefore, it is essential to monitor the US dollar and Bitcoin exchange rates when trading DOGE.
- Elon Musk’s social media posts are also a must-follow. If you want to generate profits in the DOGE market, you should monitor the Tesla CEO’s posts on social media platforms and enter the market when “the Dogefather” mentions the cryptocurrency.
- Intraday trading is also a viable strategy. Meanwhile, it is better to rely on Open Interest rather than on standard wave strategies.
- Swing trading is a strategy that can be employed to generate profit from selling and buying Doge, even with simple strategies on a 4-hour time frame.
- The dollar-cost averaging (DCA) strategy has also proven to be effective when trading Dogecoin, so you are more than welcome to use it. For a more in-depth analysis, you can find detailed backtests in this article.
How Can I Trade Dogecoin?
Dogecoin is one of the earliest cryptocurrencies, and perhaps one of the first blockchain-based projects. It has long since ceased to be a meaningless meme coin created for fun. Dogecoin quickly became a multi-billion-dollar crypto project, and its success and performance are supported not only by a dedicated Dogecoin community and development team but also by Tesla CEO Elon Musk. So, if your plan is to trade cryptocurrency, DOGE is definitely worth your attention.
Let’s figure out how to buy and trade Dogecoin (DOGE) and what you need to do first.
If you want to trade cryptocurrencies, it is necessary to have an account on a trading platform that facilitates such transactions. The LiteFinance platform is the perfect solution for those seeking to enter the world of crypto trading. To get started, all you need to do is register, open a trading account, and find the DOGEUSD in the list of trading pairs.
Cryptocurrencies are increasingly in the spotlight as the modern world seeks to recognize and regulate them. Furthermore, there is a strong possibility that real assets will be tokenized in the near future. Therefore, it is not surprising that the LiteFinance platform offers direct access to trading Dogecoin (DOGE) and other financial instruments. The rest is up to you, including your ability to shift between buying and selling Dogecoin, manage risk, and select suitable cryptocurrency trading strategies.
The following are my professional insights on how to trade DOGE, tips on leveraging X.com (formerly Twitter), and supplementary data for more in-depth fundamental analysis. I will also present a number of profitable trading strategies.
What Moves the Price of Dogecoin?
The reason for any price change in any asset is always liquidity. It is the inflow or outflow of liquidity that drives trends. In the crypto market, if you see a lot of green figures everywhere, then a bull run begins, also known as an altcoin season. During this period, Dogecoin also surges. However, DOGE is one of the few altcoins that can increase in value without relying on external factors!
As a rule, all altcoins roughly follow the movements of ETH (Ethereum), the most cap-dominant altcoin. Obviously, the growth of the ETH/USDT rate should be viewed as a signal for an increase in Dogecoin (DOGE).
Elon Musk also has a significant influence on the value of Dogecoin. It may sound strange, but his posts often cause the Dogecoin market price to rise by as much as 1,000% in a single day! Therefore, Musk's social media posts are a more significant factor than the overall altcoin market. Why does the Tesla owner like DOGE so much? Perhaps it is the low transaction fees.
How to Analyze Dogecoin’s Price Movements?
Taking the above fact into account, how can we analyze such a volatile and unpredictable asset? While it is indeed challenging, I will share with you three fundamental indicators that can be used to trade DOGE successfully. Here are three simple steps to follow:
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Monitor Elon Musk’s posts. I’m not exaggerating; this is actually an effective method. All crypto enthusiasts follow Musk on social media, and as soon as he posts a dog that looks like DOGE or mentions his Department of Government Efficiency, the price of Dogecoin immediately skyrockets. It happens simply because everyone is trying to capitalize on it. It becomes a self-fulfilling prophecy.
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Pay close attention to the US dollar index (DXY). When the index crosses the 90 mark, it is a clear signal that the US dollar is weakening.
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Keep an eye on the Bitcoin dominance index. If it falls, it means that money is flowing out of Bitcoin into other cryptocurrencies, such as altcoins or stablecoins.
Dogecoin Trading Strategies
Let’s now move on to discussing the most popular and effective strategies for Dogecoin trading. I will also offer my perspective on the methods of buying or selling the coin. While you may have a differing opinion, I will try to reinforce my perspective with insights from seasoned Dogecoin traders.
Day Trading
Intraday trading is a completely universal strategy that will work with any asset on crypto exchanges, including the Dogecoin cryptocurrency. The key factor to remember is that all trades are made within a single day to avoid commissions for carrying positions over to the next day. It is also important to bear in mind that cryptocurrencies are extremely volatile, which means that all trend-following strategies will perform less effectively.
Below are the results of testing the Supertrend + DEMA100 strategy on a 15-minute chart. As you can see, the results are not encouraging. Therefore, you should choose an appropriate trading system. For example, you can try a strategy based on Open Interest, which will give much better results, but it cannot be used in spot trading. You can also use the relative strength index (RSI). In general, your knowledge of technical analysis will help you improve your trading strategy.
Swing Trading
Swing trading is a strategy that involves trading, switching between long and short positions. For example, you close sell trades and instantly open long trades. If you use a simple trading system that I have already shown on the H4 chart, you can get quite decent results. Backtesting shows a solid profitability of 662% over 6 years. This is a profitable trading strategy; the key is to clearly understand when to close long trades and sell the DOGE cryptocurrency.
HODLing
The main idea behind hodling is to buy an asset and hold it for a long time. Then, after the bull run ends and your Dogecoin holdings are large, you sell your Dogecoins. This is a sound strategy for fundamentally strong altcoins. All you need to do is buy the asset on a dip and then, after a sharp rise, sell Dogecoin (DOGE). However, you should know all the nuts and bolts of the crypto market to determine the depth of the drawdown properly. I would not recommend this strategy to novice traders.
Dollar-Cost Averaging
This is one of the simplest strategies you can use in the crypto market. It represents more of an investment strategy than a trading strategy and involves buying, for example, $10 worth of DOGE once a week. Without even looking at the price of Dogecoin, you just make your purchases every Thursday, and that’s it. In the future, you can sell Dogecoin (DOGE) at a higher rate, making hefty profits. This strategy works well for any promising asset. DOGE, with its explosive growth, is also suitable for this type of investment. However, this strategy is only for those who believe that the token will not become worthless in the near future. As you can see on the chart, the result is quite impressive over the past 5 years.
Breakout Trading
Trading on breakouts of key levels is also a viable strategy for the DOGE market, as the coin’s price periodically surges by 150–500% on news. Technical analysis could also be applied to this type of trading, but I would recommend monitoring Elon Musk’s posts and acting quickly in response to them.
Tips To Trade DOGE
Any cryptocurrency is characterized by high volatility. Volatility means the opportunity to earn a lot quickly, but also the possibility of losing your entire investment as rapidly. Therefore, the following are five tips for trading cryptocurrencies, particularly Dogecoin (DOGE):
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Do not be greedy; greed leads to losses. Consider locking in your positions in parts. If the price has increased by 100–200%, secure at least your initial investment, and then you can aim to generate profits.
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Protect your positions. This is especially important if they represent a significant portion of your deposit or if you engage in margin trading, which comes with a high risk of losing money rapidly due to leverage. Always set stop-loss orders and move them to a break-even point when possible.
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Do not put a large part of your deposit at risk; remember that you can’t earn all the money in the world.
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If you don’t want to place stop-loss orders and want to buy crypto in anticipation of growth, buy it in parts and don’t invest all your money during the first signs of a correction. You will often think that the price has already hit the bottom, but it may still plunge deeper.
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Don’t be discouraged if you missed an opportunity to enter the market after Musk’s post, and the price skyrocketed. Just let it go; DOGE will offer a lot of lucrative opportunities. The market always gives the patient a chance to earn.
Trading vs. Investing in Dogecoin
In this section, let’s look at the pros and cons of trading and investing in Dogecoin. Notably, the question is not as simple as it might have seemed at first glance. The answer depends on your personal trading strategy and personality type. Meanwhile, both approaches can generate profits. Let’s look at their advantages and disadvantages.
Advantages and Disadvantages of Dogecoin Trading
I have already shown backtests of different strategies covering several years. As for the advantages and disadvantages of Dogecoin (DOGE), the key factor is probably volatility. The coin can surge rapidly and sharply. In classic trading, extreme volatility is obviously a disadvantage as it becomes difficult to predict the behavior of an asset. On the other hand, it is a way to earn not 30% per year, but 300% per day, if you are lucky enough. You just need to take this feature into account, and you can turn this disadvantage into an opportunity.
The second drawback is related to the first one. Dogecoin’s price is subject to manipulation. It’s not normal for one person to be able to push the price of an asset up by 100% with a post on social media. However, as in the first case, you can turn this drawback to your advantage by simply following Elon Musk’s posts on X.
In all other aspects, Dogecoin is a typical high-risk and highly volatile asset, similar to any other altcoin.
Should I Invest in Dogecoin?
The DCA strategy shows that investing in DOGE is actually worth it. At the same time, I’d not count on a 1,000% gain. Dogecoin (DOGE) has already shot up a few thousand percent over the past 10 years and has a pretty impressive market cap. That said, it’s still a good idea to have some Dogecoins in your portfolio.
If we average the growth over the last 5 years, we get more than 500% per year. That doesn’t mean DOGE will keep growing at this pace, but no other asset can offer you that kind of growth, even on paper. Notably, many countries have already adopted cryptocurrencies, some even accept Dogecoin as payment, and if you are planning to build a crypto investment portfolio, you should definitely buy Dogecoin and forget about its meme nature, ridiculous logo, and all the rest. It has long ceased to be a joke asset.
Conclusion
I hope I have managed to explain the potential of Dogecoin and that you now have a better understanding of how to trade or invest in cryptocurrency. As you finish reading this article, subscribe to Elon Musk’s account on X, so he can thank me for promoting him 
You might think this is a joke, but it’s not! Seriously, this is the easiest way to trade Dogecoin.
Dogecoin Trading FAQs
All you need to do is register, open a trading account with LiteFinance, and top it up. You can use your cryptocurrency wallet. That’s it, you can start trading using this platform. You can choose any asset, including cryptocurrencies, such as Dogecoin.
Yes. You can choose among swing trading, intraday trading, trading based on Elon Musk’s posts, and even DCA strategies, representing profitable strategies for trading DOGE.
Exchange is possible, but not directly. In some cases, you can make purchases directly with Dogecoin, for example, in some online movie theaters, but you usually need to convert DOGE to USDT or another stablecoin, and then exchange it for cash. You can do this on a cryptocurrency exchange.
Backtesting has shown that all trading strategies are applicable, from intraday trading to DCA investing in cryptocurrencies. For beginners, I would recommend trying swing trading on the H4 time frame.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.
According to copyright law, this article is considered intellectual property, which includes a prohibition on copying and distributing it without consent.
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