Cardano: What It Is and How to Buy, Invest, and Trade It Simply
Interested in Cardano but don't know where to begin? This article covers everything from understanding Cardano basics to how to buy Cardano and start trading -- even with zero experience.
What is Cardano?
Cardano (ADA) is a third-generation blockchain platform founded by Ethereum co-creator Charles Hoskinson. It stands out for its scientific approach to development, focusing on security, scalability, and sustainability. Unlike many cryptocurrencies launched with minimal research, Cardano's protocols undergo rigorous academic peer review.
Cardano operates using Ouroboros, the first provably secure Proof-of-Stake protocol. This makes it approximately 20,000 times more energy-efficient than Bitcoin. Its native cryptocurrency, ADA, serves three essential functions: facilitating transactions on the network, participating in the staking process to secure the blockchain, and voting on proposed network changes.
How Currency Quoting Works (Simple Explanation)
When trading Cardano, you'll see it quoted as ADA/USD, which shows exactly how much one ADA token costs in US dollars.
Real example: If ADA/USD = 0.60, one Cardano token costs 60 cents. Here, ADA is the base currency (what you're buying), and USD is the quote currency (what you're paying with).
If ADA/USD rises from 0.60 to 0.70, it means:
- Cardano has increased in value by 16.7%
- You'd now need $70 instead of $60 to buy 100 ADA tokens
- If you already owned 100 ADA, your investment would now be worth $70 instead of $60
Simply put: rising numbers mean Cardano is getting stronger against the dollar.
Factors That Influence Cardano Price Movement
Several specific factors drive Cardano's price changes:
- Network upgrades and development: The 2021 Alonzo hard fork, which introduced smart contracts, caused ADA to surge over 116% in a month
- Staking participation rates: When staking rates reached 70% in early 2022, circulating supply decreased, supporting price stability during market turbulence
- Strategic partnerships: The 2023 collaboration with Ethiopia's Ministry of Education to store educational credentials on the blockchain boosted ADA by 15%
- Regulatory news: SEC classifications of cryptocurrencies often create immediate price volatility for ADA and the entire market
- Overall crypto market sentiment: Bitcoin's movements typically influence Cardano with an 80% correlation, though ADA sometimes shows independent movements during Cardano-specific news
How to Read Cardano Price Movements
Understanding price movements is crucial for effective trading:
- If ADA/USD moves from 0.60 to 0.70, each ADA token has gained 10 cents in value
- If it drops from 0.60 to 0.50, each token has lost 10 cents in value
Practical example: If you buy 100 ADA at $0.60 ($60 total investment), and the price rises to $0.70, your investment is now worth $70 -- a $10 profit. Conversely, if the price falls to $0.50, your investment would be worth $50 -- a $10 loss.
On Pocket Option, you can analyze these movements using multiple timeframe charts, technical indicators like RSI and MACD, and real-time trader sentiment indicators showing what percentage of traders are buying or selling.
Cardano Quick Trading Tutorial on Pocket Option
Here's a step-by-step process to start trading Cardano:
- Locate Cardano: After logging in, click the asset selector and search for "Cardano OTC" or "ADA/USD"
- Analyze the market: Use the interactive chart to identify trends: consecutive green candles indicate an uptrend, while red candles suggest a downtrend
- Apply technical analysis: Add the 14-period RSI indicator (readings above 70 suggest overbought conditions, below 30 suggest oversold)
- Set your investment amount: Start conservatively with $1-5 per trade while learning
- Select your timeframe: For beginners, 5-15 minute durations provide good balance between quick results and reduced market noise
- Make your forecast:
- Click BUY (green button) if you believe ADA will rise
- Click SELL (red button) if you expect it to fall
- Confirm your trade: Review the potential return (typically 75-92%) and click to confirm
Getting started takes just minutes -- register, deposit a minimum of $5 (amount may vary by payment method), or practice with the demo account first.
Try Trading Cardano Without Risk -- Free Demo Account
Not ready to commit real money? Pocket Option provides $50,000 in virtual funds immediately after registration.
With this demo account, you can:
- Practice trading Cardano in identical market conditions without financial risk
- Test different strategies across various timeframes (from 5 seconds to days)
- Experiment with all technical indicators and chart patterns
- Learn how Cardano responds to market news and events
- Build confidence before transitioning to real-money trading
When you're ready to switch to live trading, you'll gain access to additional features:
- Copy Trading system to follow successful Cardano traders
- Up to 15% cashback on trades
- Trading tournaments with prize pools exceeding $100,000
- Social trading features and trading signals
