How to trade crypto? You might have heard in your social circles a lot about cryptocurrency. The most common term thrown around is Bitcoin. Now you must have gone online and done a basic research. Research must have provided with both positive information and that which ends making you apprehensive.
It is true that the cryptocurrency market has been quite volatile in 2018. However, financial markets always pose some kind of risk. If you enough knowledge of the market and risk management, it is entirely possible to make fair money while day trading cryptocurrency. You need to start with a coin wallet and coin exchange. If you can find one company that offers both, then that is quite preferable. There are already plenty of success stories of people, who have managed to change their lives with crypto day trading. You can do the same.
If you have decided to day trade cryptocurrency, this article is a great read to learn how to day trade cryptocurrency. While the trading mechanics in the cryptocurrency world are quite similar to regular trading despite distinct entities and certain specifics, it is still a new concept to grasp. We will not discourage you by saying that majority don’t succeed. However, if you don’t learn about what you are stepping into and don’t pay heed to certain advice, then you will eventually get disappointed.
What is Day Trading in Cryptocurrency?
You might have heard of day trading in regular markets. It is the simple buying and selling of assets. You buy an asset and the goal is to sell at a price higher than the buying price. Therefore, you make a profit. The mechanics of day trading in cryptocurrency is the same. As per the rule of day trading, it is short-term trading. You don’t hold on to an asset for more than a few seconds. At the most, you will hold it for a couple of hours. This means that the profits will be small but quick.
Learning the Strategies
Now that you are aware that what cryptocurrency day trading is, it is time to learn about the strategies. Trading is a lot about being smart. It is false to say that you can avoid risk. However, if you know how to strategize your approach to trading, then you can reduce risk.
Here are few tips to start crypto day trading:
- Be Ready for Volatility
We mentioned before that the crypto exchanges have been quite volatile in 2018. The truth is that they are volatile in general as well. Volatility is the measure of assets going up and down real quick. In the regular exchanges, prices don’t change significantly over a period of 24 hours. The reason is that these exchanges are based on companies that have been working for a long time. In the crypto markets, the prices can change too fast. This means either great success or great failure for the trader.
To give you an idea of how volatile the coin market can be, you should know that a coin can rise or fall by over 10 to 50 per cent on any given day.
- Don’t Jump Into It
The biggest mistake you can make in trading is to become over-confident. Even you have experience with day trading in the real world, you will have to learn day trading crypto like you have no concept at all. The reason is that the environment is quite different as shown by the volatility example. Therefore, don’t just begin cryptocurrency day trading after learning the theoretical concept. You must practice and start small. Some exchanges are quite feasible for beginner day traders. They not only offer tips and strategies to make successful profits but may provide with fake money to practice.
- Learn About the Top Coins
Of course, you need to have knowledge about what you are actually day trading. Bitcoin is the most established coin right now but there are other coins as well. These are too counted as the top cryptocurrencies. For example, there are Ethereum and Litecoin.
If you are beginning at crypto day trading, then you should stick to Bitcoin. This will reduce the risk. However, it is essential that you learn about other top coins too. This will help you proceed with the day trading career, especially if you plan to make a living out of it.
- Stay Up to Date
As a day trader, you should never be out of the loop of the market news. Keep up to date with incoming Bitcoin news every day. You can get your news from the financial sections of newspapers, Bitcoin financial magazines, websites, and even social media.
- Accept the Losses
Even the most experienced traders in crypto exchanges are prone to losing money. As a beginner, you must be ready for experiencing loss now and in the future. It is important to remember that it is part of trading, whether it takes place in the real world or the crypto world. One mistake to avoid is that don’t try to chase the losses. It might come as an instinct to react after experiencing a loss. They will try making a profit by taking bigger risks. This is one of the biggest reasons, why many crypto traders fail.
If you have enough practice and feel ready to begin, then it is time to set certain targets. If you have an idea of how much you plan to make, then you can trade accordingly. The experts recommend that never invest all of your bankrolls. Only investing in 1 per cent is enough. This seems like a small amount and the profits will be too. Although, it protects you from becoming broke and increases the bankroll steadily.
Today trade crypto, begin at a reputed Bitcoin exchange. Read reviews from other traders to learn about the authenticity, reliability, and what platform will benefit you the most.