If you want to succeed as a crypto trader, you’re going to need steely nerves, a trading strategy to live by, and an intuitive trading platform. With never-ending research, you will stumble upon a trading strategy and a trading platform that will meet your needs.
Investing in cryptocurrency in the short-term offers the best and easiest way to profit from cryptocurrency if you want to succeed in the competitive cryptocurrency world.
Trading crypto doesn’t require a deep understanding of the blockchain or how the cryptocurrencies work.
So, we’ll share some information and strategies with you that will help you get started in day trading.
What is cryptocurrency day trading?
Day trading involves purchasing and selling of assets on the same day. It’s an extremely risky endeavor due to extreme crypto market volatility and liquidity. However, in today’s markets, day traders are able to take advantage of small market fluctuations and make money based off of the margins.
For this, you should develop a proper cryptocurrency day trading scheme (or, at the very least, a basic cryptocurrency strategy). You will also need to understand and analyze buying and selling opportunities and trade based on volumes, chart patterns, and price actions.
The investor should also stay on top of the latest news and updates about the developments in the world, political and economic, since they may have an impact on markets. You will find the bitcoin price calculator extremely invaluable in your search for investing in the currency.
What Is the Best Way to Get Started?
Is it possible for a beginner to start day trading in crypto right away? Of course, you can if you possess self-discipline and objectivity. Coupled with those skills, if you implement the following tips, you can start day trading right away:
Learn about the market’s quirks
You need to know how the markets works in order to succeed in trading. Start by buying Bitcoin or any other cryptocurrency, the price of which is poised to increase soon, then sell it for a profit.
Although day-trading crypto seems simple, be aware that it is challenging and risky, requiring deep understanding, perseverance, and sound strategic mindset to succeed.
Join a trading exchange
You will need a trading account in an exchange that suits your day-trading needs. Almost every country has its regulations governing currency trading, so it is important to select a crypto exchange that in line with the local rules.
The following factors also influence a smooth trading experience:
· UI/UX
· Fees and commissions
· Security and authentication
· Supported cryptocurrencies
· Finance methods supported
Make an investment
It takes only minutes to invest in cryptocurrencies. You’ll want to do your homework when deciding on a cryptocurrency that is the right one for you.
Your journey will begin once you’ve selected a reputable crypto exchange and deposit your starting capital. The minimum trade amount on cryptocurrency exchanges usually charges a small fee, which means you will only need a couple of dollars to invest.
However, you will still need a good day trading plan to succeed.
Five Strategies for Day Trading Cryptocurrencies
Strategic planning plays a greater role than any other in your trading success. Day traders develop trading strategies that are designed to work in the chaotic crypto markets. You can choose from a variety of crypto day trading strategies based on your competencies and market conditions.
Trading in ranges
With range trading, you can capitalize on market non-trends by spotting stable tops and bottoms, which appear as support and resistance segments on candlestick charts.
‘Support’ refers to prices below market prices, whereas ‘resistance’ is a price above it. Traders can buy below support and sell above resistance if the price fluctuates between these levels. Day traders who use this strategy to trade cryptocurrency buy crypto assets when they’re cheap and sell them when the price is high.
HFT (High Frequency Trading)
Quant traders use HFT as a strategy based on algorithms. Trading bots and algorithms are developed to enable quick entry and exit from crypto assets. However, such bots require strong mathematical and computer science skills and knowledge of complex market principles. This strategy is better suited for advanced traders.
The Scalping Strategy
By increasing trading volumes, this trading strategy aims to book profits. Despite the inherent risks, intelligent traders know the margin requirement and other important rules to avoid awful trading experiences.
A scalper analyzes the crypto asset, looks at the past trends and volumes, and decides when to enter and exit the market.
Analysis of the technical aspects
Based on market data, technical analysis can be used to forecast a security currency’s price movements in future. A technical analyst can apply statistical trading strategies on any market based on historical data, estimating future revenue by looking back at past performances.
By using technical analysis, day traders can find money-making possibilities, as it allows them to identify trends and patterns relevant to day trading.
Technical analysis can be used as a tool for maximizing profits. Currently, one of the best day trading indicators is MACD (Moving-Average-Convergence-Divergence).
Averaging Dollar Costs
It is best to assume that finding the perfect entry and exit points in a crypto market is near impossible. The dollar-cost averaging method (DCA) appears to be relatively sound when it comes to investing in cryptos.
DCA refers to investing a fixed amount periodically. By following this strategy, investors can avoid the arduous task of timing the markets and building wealth in the long run.
However, DCA-style exit strategies can also be tricky. These strategies require an understanding of the market cycle and market trends. Analyzing technical charts can also help you determine when to exit a trade. Before taking a position, crypto investors should watch oversold and overbought regions.
Final thoughts
It can be lucrative to trade cryptocurrencies on a day-to-day basis. Still, it is a risky endeavor that requires constant buying and selling. The key to day trading is understanding the crypto market, developing detailed trading strategies, identifying your entry and exit points, and sticking to your guns once you have committed to a strategy. You need to understand how to day trade cryptocurrency if you want to see long-term profits, since it’s one of the riskiest types of trading out there, albeit with huge potential for profits.
