Crypto day trading is a rather interesting choice, as it can be quite difficult to find ways to make consistent profits in this market. If you’re an experienced trader and know how to manage risk, you might still find a few opportunities here and there — but other traders are more likely to find themselves scrolling through charts all day to no avail. For those who are new and want to try their hand at crypto day trading, don’t worry: we’ve got your back! Here’s some key advice on how to get started with the process.
Of course, I don’t mean to suggest that day trading is impossible. If you’ve got a good knowledge of the market, you’ll be able to find plenty of opportunities no matter your skill level — but whether or not a strategy is right for you depends on more than just your own goals and expectations. An important factor is knowing what the crypto markets offer, so we’ll start with an explanation of how day trading works.
The Basics Related To Crypto Trading
In general, crypto traders are not expected to be in the markets very often — if at all. As a result, you’re not going to see any huge swings in prices every day as you would with traditional currencies or stocks; trading activity is much more modest and random.
This means that you need to set aside a certain amount of time each day to be able to trade. While your target might be something like $10,000 a day in profits, if you do the math, it won’t take long for the market to take away much of that profit, especially whenever volatility is high. That’s why you need to choose your time wisely.People can also learn about eToro by searching it on the internet.
Value your coins, preferably using one market considered liquid enough to be reasonably accurate, and hold them in an exchange that allows you to withdraw at will. Monitor the market carefully for opportunities; it’s usually best to use specific strategies, like opening a Buy order for some desired coin when it drops below a point where you know the sell orders will cause it to bounce back up again;
Why To Do Crypto Day Trade?
That’s how a day trader can theoretically make a steady profit. However, there are several issues that you will come up against right away, and all of them should be addressed to make the day trading process more beginner-friendly. Here they are:
Most exchanges only work during certain hours or even certain days of the week, and they don’t necessarily share the same schedule; you need to find one that works with your schedule. The best way to find an exchange like this is to check out reviews but keep in mind that most people won’t share this information unless you ask specifically.
Many exchanges have withdrawal limits, usually from $100 to $10,000 (or more). This means that you won’t be able to withdraw all of your money at once, so you’ll need to know what you’re doing and which coins you’re trading before putting too much money in the exchange.
You generally can’t buy a large amount and then sell it in small amounts for a profit. Most exchanges have several orders between large buy and sell amounts to keep the price balanced (and usually, there’s also a spread involved that makes it hard for an individual trader to make any real profit);
Crypto Day Trading Strategies?
Then, of course, we have the technicalities. It’s important to use a strategy that will actually make you money and that you know inside and out. The best way to do this is by choosing reliable coins and understanding the markets and how your trading works.
At its core, crypto day trading isn’t much different from any other day trading, but it’s not nearly as simple as most people think. You need to have a very clear idea of what you’re doing and be able to weigh up your options at a moment’s notice. You also need to know what you’re looking for, or finding the right opportunity will be much more difficult than it has to be.
Picking The Right Coin
There are a lot of good coins out there, but not all of them are created equal. Some, like Bitcoin, are hundreds of dollars each; others, like Ethereum or Litecoin, can be purchased with much smaller and, therefore, more frequent investments.
Precautions Take While Doing Crypto Day Trading?
The market is volatile. Since the market is so small, every little movement of one currency can affect the markets, and it’s very easy to make money by taking advantage of these fluctuations. However, since there are so many high-volatility coins around, you need to be extra careful and try to find coins that will rise in value but have at least some sort of stability, such as a liquidity issue or direct partnerships with a large company.