A Guide to Day Trading Bitcoin and Other Cryptocurrencies

Day trading refers to the process of buying and selling assets like securities, stocks, and cryptocurrencies. Since it is “day” trading, its nature is short-term. It is therefore completely opposite of HODL where you buy a crypto asset and then hold onto it for potential long-term profits. Day trading is done with the goal of entering the market, taking a position, and then watching it closely, and finally exiting at profits. Today, trading bots such as bitcoin era are performing automated trading that can assure you of faster turnovers.

How to day trade the Bitcoin and other cryptocurrencies:

  • Any day trader must first understand why he is day trading. This is because day trading will not suit everyone. He has to be comfortable with market volatility, regardless of whether he is looking for short-term or long-term investments.
  • Traders have to learn about the market to be confident with it. So, a day trader must learn from his mistakes and correct these. Ideally, a newcomer must open a Demo Account first before investing any money in the market. 
  • It is important to record both your wins and losses before you consider day trading. Your personal experiences will help you understand why some trades worked out and some did not. There are no short-cuts in trade analysis.
  • To start day trading crypto coins you must have a positive bent of mind. If you feel exhausted or have a bad mood, it is best not to trade that day. You can always get back to it the following day because the market is volatile enough to offer you great opportunities every day. 
  • When you are all set to start day trading you must have a proper strategy. This demands some research and technical analysis; you need to establish some ground rules before trading. The first thing to remember is never to trade more than you can afford to lose.
  • It is best to follow a conservative strategy so that the bets are not too risky. Day trading is best if you collect small rewards that are safer. You should also implement stop-loss orders to make sure you can exit before things go south.
  • Where you are trading crypto coins is important for the trader to decide. There are many exchanges that have stopped trading when prices are very volatile or when they have been hacked. Some crypto exchanges have even shut down and clients have ended up losing fortunes. This explains why you must select a marketplace cautiously and ensure that there is liquidity and reliability.
  • To succeed in day trading you have to be adept at technical analysis. You must be capable of reading and analyzing charts using different techniques. That way you can identify trends and forecast prices.
  • To exit trades you must factor in fees. If your entire profit goes away into paying trading fees, you will be left with nothing. While day trading focuses on making small trades, you need to know how small such trades should be. They must be at least worth the effort you put into day trading.
  • Since taxation issues are bound to crop up sooner than later, it is best to consult tax professionals prior to starting day trades.

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Ajay Deep

Ajay Deep is a young enthusiast who Loves Chandigarh and is always eager to make this beautiful city even more beautiful. A Mechanical Engineer By Chance and Working in an IT MNC by Choice. A Writer, Photographer and a Budding Entrepreneur. A Designer, Developer and Digital Marketing Expert. In brief : A Jack of All Trades and Master of Few :) You may reach Ajay Deep at ajay@chandigarhmetro.com