In this article, we will discuss day trading cryptocurrency strategy and tips for intraday trading in these digital currencies.
One of the reasons most people choose to invest in cryptocurrencies is because they can be traded for profits.
There are separate exchange platforms for the trading of crypto coins.
While it may seem like a simple process, similar to traditional stock trading, crypto trading is somewhat complex and may even result in a loss if you are not careful enough.
A cryptocurrency is a form of digital assets that does not have any physical existence.
These currencies are created through a programming code and are designed such that the generation of new tokens and verification of funds transfer is regulated by high-level encryption technology.
At this time, Most of the cryptocurrencies are based on the blockchain technology, which provides the platform for the development, management and storing of these tokens and their transaction records.
Crypto Trading simply refers to the process of buying and selling cryptocurrencies.
Day trading, or intraday trading, is a specific kind of stock trading in which stocks are bought and sold within the same day, usually with a profit.
Day trading is a very calculated activity that should be done with extreme care. Professional day traders study trends, charts and the news very carefully, with a close eye on even the slightest price movements, in order to make the buy/sell decisions for the maximum profit on the day. They take calculated risks while capitalizing on even the minimal changes in the price of a currency within in a day.
Day trading is even more popular in the crypto industry because of the high fluctuations within minutes and hours in the prices of top currencies like Bitcoin and Ether.
If you are planning to intraday trade your cryptocurrencies, here are a few tips to help you earn more.
Before you get started in the field of crypto trading, make sure that you know a good deal about the blockchain technology.
All cryptocurrencies out there are based on this technology, so it is important to know about blockchain in order to get familiar with the working mechanism of cryptocurrencies, which is crucial for determining the growth and fall trends of a particular currency. You can read about this on the internet.
Once you get yourself familiar with the blockchain, the next thing to learn about is cryptocurrency itself.
As I said before, you cannot expect to do well in crypto trading if you know nothing about the token/coin you want to trade.
Find out things like how the particular cryptocurrency works, what the market price is, what the trends are. The more demand there is for the coin, the higher the chances of its price fluctuation.
Crypto trading is a risky business, with intraday trading being even riskier. If you are starting in this field, make sure that you know all the risks involved.
First of all, know and follow the golden investment rule strictly: “Never invest what you cannot live without.” Invest only what you can afford to lose.
Also, cryptocurrencies are more prone to risks since they are free from any regulation.
The price fluctuation of cryptocurrencies depends on the demand and reaction for them in the market and various industries.
Like any other investment, you should know when to invest and when to stop investing in cryptocurrencies.
There is no golden rule. Yet the standard rule says that you should invest when the price is low and stop (sell out) when the price is high.
This is even more crucial in the case of intraday trading of cryptocurrencies since the price changes very frequently.
The market knows before you do. If the price of a particular cryptocurrency is about to go down, there might be some hints by experts and crypto news channels.
Therefore, it is wise to keep yourself updated with the news and blogs of the crypto trading industry to be able to make the right investment decision at the right time.
This is the most significant point of this entire article.
The cryptocurrency you choose for trading will decide the fate of your trading activities.
In order to participate in an intraday trade, you first have to purchase a cryptocurrency through an exchange.
It is recommended not to invest all your money in one currency, but formulate a mix of risky and safe cryptocurrencies so that you do not lose a lot at once.
Make sure to pick currencies that have an actual demand in the market and are probably already being used in some practical applications.
Against, choosing a trustworthy exchange platform for your crypto trading is as important as investing in the right coin, if not more.
The investment world can be quite intimidating very quickly, especially for newcomers.
If you are just starting in intraday trading, be sure to add a security level by setting target profit and stop-loss.
A stop-loss is the lowest price limit that you set for your funds to be automatically (or manually) withdrawn, with a profit, when the price of the currency drops to a certain limit.
Similarly, a target profit determines the maximum profit/gain limit at which you will stop trading.
Be wise in your investments. Intraday trading is definitely more fulfilling but also riskier.
If you are not careful, you might lose your investment in just a blink. By following these simple tips, you can get the desired profits out of your cryptocurrency trading investment.