Crypto trading has been one of the hottest trends nowadays, and many investors look forward to being more successful in trading cryptocurrencies. If you have the time and put more effort into knowing or understanding the crypto market, day trading cryptocurrencies may interest you more. It is actually the same with real-world asset trading, and the only difference is you can either gain more or lose more. Does day trading apply to cryptocurrency? Let’s find out.
How Would You Start Trading?
Generally, day trading is buying and selling assets within a few minutes to a couple of hours and hope to profit from short-term price movement. So, does day trading apply to cryptocurrency?
In the past few years, cryptocurrency has been a growing market that entices many day traders cause of high liquidity and ample opportunity to gain profit. As of now, there are a lot of cryptocurrencies that give more opportunities for traders. Indeed, day trading does apply to cryptocurrency. So how would you start trading?
- First, decide if you want to buy the currency or have a feeling that it will favor you or not. If yes, you need to look for a reliable exchange. If you want to speculate on prices, you will need a broker.
- Second. Put funds into your account.
- Third, purchase the cryptocurrency or open a trade.
Now, you are ready to be a successful trader! To gain more experience without any risk, you may practice using a demo account though you cannot do it on an exchange. Generally, crypto trading is all about speculations on the prices than owning coins.
Factors When Choosing A Broker
A credible and experienced broker is an essential part of being a trader since they will be your partner in your crypto trading journey. Consider these factors when choosing a broker.
- Software. The ones you will use should be convenient for you to be more updated even if you are doing other things like buying groceries or traveling to other places.
- Security. Verify if the exchange you have chosen is secured. Once scammers hack your account, you have to kiss your money goodbye as it is stolen, even up to the last penny. That is why choosing an exchange you can trust should be your topmost priority.
Making Money From Crypto Trading?
To be successful, you will need to have an in-depth understanding of what you will do. It would be best if you had a concrete strategy, as many successful traders do. They use chart patterns, volumes, how the prices go, and technical indicators to know if it will be a fair trade. With any strategy, managing risk is vital to be successful.
Some traders base their analysis on the news they hear. This is taking advantage of purchasing assets that gave good trading activity. In day trading, volume and liquidity are crucial as day traders air to gain from the market’s volatility. They usually choose to trade highly liquid market pairs because one wrong exiting position can devastate your account.
Profit Strategies You Can Use
Now let us talk about different strategies you can use to profit from this market.
- Scalping. It is taking advantage of small price movements in a short period. Scalpers can usually trade on margin or trade futures contracts to amplify their results with leverage. Since the share value targets tend to be smaller, larger position sizes build a lot of sense. This is often usually true for many strategies in day trading. Scalpers can usually trade on margin or trade futures contracts to amplify their results with leverage. Since the share value targets tend to be smaller, larger position sizes build a lot of sense. In fact, this is often usually true for many strategies in day trading.
- Range trading. This strategy is highly reliable on chart analysis of candlesticks, and you should watch out for support and resistance. It is looking for price ranges with the same pattern and creating strategies based on those ranges’ patterns. For example, the prices range between a resistance and support level, and you can purchase the support level and sell the resistance.
The idea is assuming the support will push the price upwards, with the upper area will push the price downwards. Though the are risks in this kind of strategy cause at a time when the price reaches resistance or support, the possibility of breaking is high. As a range trader, prepare for a chance of breaking out of the range. Set a stop-loss if a breakout is confirmed. This strategy can be suitable for anyone who wants to try their luck in crypto day trading. It would be best to research more about support and resistance and candlestick charts to execute this strategy effectively.
Conclusion
Cryptocurrency day trading is a very promising strategy for everyone who wants high profits. It requires decision-making to be quick, and the executions, which can be highly stressful and may take so much of your time. Day trading is also hazardous, and concrete strategies and in-depth research is a must. It may be a lot of work as well as you look for opportunities to profit. Are you sure you can handle all of this?
Be ready with potentially losing money as well in the process of day trading. Carefully choose which day trading strategy suits your goals and personality. There are many strategies to choose from, and getting familiar with all of them can help you decide on finding your trading style.
So, does day trading apply to cryptocurrency? The answer is yes. One must do thorough research to do all the said strategies effectively. Choose which one works for you. Ride on the market’s volatility, and don’t lose yourself in doing all your plans. It is not an easy decision to make. You should not take it lightly. Browse reviews, practice on demo accounts, and try the software first.
Making a living day trading cryptocurrency may be a great deal and even more manageable thanks to the crypto market’s high volatility nature. High volatility suits day trading, alright; therefore, you have got the proper setting to succeed. Does day trading apply to cryptocurrency? Find out more here!