A lot of people cringe at the idea of day trading crypto because it can be too technical to decode for a total newbie. While crypto trading may appear complex on the surface, anyone can learn and enjoy this with the right strategies in place.
In fact, crypto day trading isn’t rocket science because once you nail the basics, you can become a professional day trader in no time. All it takes is consistency and persistence to learning the ropes of day trading crypto. All it needs is constant practice. This is how you meet the mark when it comes to day trading.
What is Day Trading Crypto?
When people talk about day trading crypto, the common reaction would be it’s too complicated to learn even with repetition or practice. This is a myth.
Trading crypto is similar to trading any other currency. Whether you’re trading BTC, ETH, BNB, or USDT, the goal here is to make profit or earn from your investments. Now, traders have different goals or even timelines. Whether you’re here for the long game or just in for a quick buck such as in short-term day trading, you must always set realistic expectations.
Day Trading Strategies
With this strategy, you would need to keep an eye on the current market price of a particular coin like Bitcoin which helps you predict its next price movement. The market chart will help you with this because it will show you the direction of BTC. With chart analysis, you will know the right time to buy and sell bitcoin.
When you speculate about outcomes, you would usually based this on your experience and knowledge on the price movement of a crypto. You would also include recent news and developments regarding a specific cryptocurrency of your choice.
Top 3 Tips on Day Trading
Know and Understand the Ins and Outs of the Market
Just like any investment portfolio, it’s very important that you know and understand the market so you can track and even predict where it’s going. In addition, you should also know how to conduct technical analysis (TA) and fundamental analysis (FA) on your digital coin of choice. Once you understand the price movement and behavior of your chosen crypto, setting goals become a walk in the park.
Go for the Slow Burn Method
Consider the fact that the crypto market is highly volatile. Cryptocurrencies are more volatile compared to other markets. This means, you have the chance to gain or win but you can also lose all your funds in a frenzied moment. With that being said, you should learn how to pace yourself. Do not rush into trades just because everybody else is doing. You have to study and test the market and not go with the crowd.
Test and Practice with a Demo Account
Failures and losses are predictors of success. You will not always get it right with daily cryptocurrency trading. Losses are bound to happen – so you have to be ready for anything. You can start with a demo account to get an idea of what you’re about to begin into. When you’re better and satisfied with the demo account, you can then fund your account so you can start trading.
Sometimes, losses are inevitable but every trader has the power to control their percentage of losses. With Stop loss, whenever you’re on a trade and your loss reaches your set limit, your trade will automatically close. The same goes for take profit, whenever your profit rises to a specified percentage, then your trade will be closed automatically.
You don’t have to wait till your price starts falling before you end your trade. Otherwise, you might end up losing all your profits.
Play the Devil’s Advocate
You have to play the devil’s advocate when you trade and invest. Less is definitely more when it comes to information. You have to be open to the idea that you can lose and shrug it off as a part of winning. A beginner’s mind is a great default for any trader because you cannot allow yourself to be overconfident when you set your trades which would often result to skewed losses.
With the beginner mindset, you set yourself to success knowing that failure will always be a possibility but it can be your ally too. The only way to win in day trading crypto is to keep that beginner mindset where you can apply your knowledge and past experience to new scenarios and see how it goes. This deflates your ego, allows you to learn new trading strategies, and keeps you in balance. This way, you may fail at some points but you always bounce back and try to win again.