Cryptocurrency is now a word that has been buzzing around for quite a while now. Every day, there’s something new you can find on the internet.
For example, today’s buzzing news is that Bitcoin touched its highest price point $60,000.
Where it is the store of value for some, it’s also a good trading option for others.
Truth be told, cryptocurrency has become a serious vehicle for building wealth. And, the explosion of options for cryptocurrency exchange in India has contributed to it even more.
Today, anyone can try their hand as a day trader in the crypto arena.
A Brief Summary to Day Trading Cryptocurrency
Well, Day Trading is a process of buying and selling assets, such as precious metals, security, stocks, etc. And in the cryptocurrency world, it’s about buying and selling your crypto holdings.
Here’s the catch –
The day trading cryptocurrency is a game to buy low, sell high and exit as quickly.
The goal of day trading is to get into the market to take a certain position, keep a close eye, and exit at a profit.
Here we’re talking about the time span, which is as short as a few minutes.
Essential Characteristics of a Crypto Day Trader
Here, I’d like to mention a very important thing.
“Day Trading Cryptocurrency is not a get-rich-quick scheme.”
In fact, it’s very likely to lose some money for quite some time until you’ve developed some characteristics as a day trader. The characteristics you should possess to become a successful day trader include –
1. Knowledge of Crypto Marketing
In order for you to become a successful day trader, you should be both familiar with the crypto market and attain a vast knowledge of changing cryptocurrency behaviours.
You need to have the components that influence the cryptocurrency prices.
2. Risk Capital
As mentioned previously, day trading cannot make you rich quickly. The chances to lose your money are as vivid as making it.
Considering that, whether you are an investor or a trader, you need to have a Risk Capital – the money that you can afford to lose.
Furthermore, having risk capital forestalls and shields the traders from falling into financial ruin.
3. Trading Strategy
As a day trader, you need to have an investment theory. Your personal trading strategy will give you an edge in the market.
There are a few diverse trading strategies that crypto day traders use, such as trading news, arbitrage, and swing trading.
Dos and Don’ts in Crypto Day Trading
The strategies for day trading in cryptocurrency is somewhat different from other markets. The cryptocurrency market is more volatile than any other asset class.
Thus, it would be best if you were more rigorous about following the best practice. Below are a few tips that can help you increase profitability in the long term –
· Don’t put your money at stake if you don’t have tested strategies to stick to.
· Go and learn a few basic risk management techniques that can help you minimize the losses.
· Develop your entry and exit rules to prevent significant mistakes.
· The crypto industry is continuously evolving. Keep yourself updated with the latest trends.
· Make sure your decisions are based on facts instead of feelings.
Get Started with Day Trading Cryptocurrency
Day trading can prove to be a highly profitable strategy. Still, there are several things to consider before starting.
Since day trading or intraday trading requires fast decision-making plus quick execution, it can sometimes be highly stressful yet very demanding.
It’s a risky market strategy that requires a solid understanding of the market. Ensure that you have the set rules for your entry and exit as soon as you see the cryptocurrency value swinging as per your benefits.