Best Tips for a Successful Bitcoin Day Trading
Bitcoin never fails to seize people's attention regarding cumulative gains or the high degree of risk involved in trading. It has gained a lot of value since 2009 and has proliferated that invigorates the masses to invest. The transactions are irreversible and have anonymity, which gives more benefit to the buyer and seller for trading without having to fear the government's intervention. There are numerous trustworthy platforms like Bitcoin Storm App for safe trading ventures.
Talking about the relevance of Bitcoin day trading, you buy Bitcoin with your money (or mine it), only to sell it after appreciation in its value. It is common in stock trading, where many commodities, stocks, and currencies are traded. People acquire them for a price and then sell them when the price goes higher. However, it does not happen all the time, as you might also have to bear losses if the value plummets.
Before starting with the objectives of Bitcoin day trading and how to do it, let us tell you about Bitcoin Day Trading in detail.
What is Bitcoin Day Trading?
When two parties decide to buy and sell cryptocurrency like Bitcoin to earn profits, it is known as Bitcoin day trading. You can hold the asset for a day or a couple of hours and have to sell it by the end of the day. The cryptocurrency market will determine the value of the Bitcoin you traded at that moment, and thus, you can either make a profit or incur a loss.
But by adopting various intelligent strategies and a clear roadmap to your objectives, you can assure minimum profits by the end of the day. It can even last for a couple of seconds. Thus, it is short-term trading to apply your mind to yield the best out of your investment. It is all about prediction and speculation in day trading. You have to strike a balance between accuracy and forecast so that you can earn multiple profits.
Methods of Doing Day Trading
There are many different methods of day trading. But the most popular ones are either speculation or chart analysis.
As you can figure out from the name itself, speculation includes a high amount of risk, and it is solely dependent on your perception of the trade when you believe the prices might go up and you might earn profit. In a specific case, if the market is in a good position and you see a positive pattern of trades going up, then you can purchase bitcoin at that moment.
Chart analysis is another common day trading cryptocurrency technique. Traders research a cryptocurrency's market movement and attempt to predict its direction depending on previous price movements. You will look at how a price swings every few seconds, minutes, or even hours while studying maps.
Bitcoin Day Trading Tips
Infused with risk, high volatility, and complex determining mechanisms make bitcoin and other cryptocurrencies unique in trading. But there are other factors that you need to know before you get your hands on day trading.
1. Accept high probability of losses
While trading bitcoin, about whether you will earn a profit or incurring loss despite a positive trend in the cryptocurrency market, you can say nothing. No matter how well you sketch out a plan and prepare for all the farsighted losses ever imagined, there still dwells a risk of losing. Thus, newbies in trading might feel beleaguered with challenging conditions and requirements. Even the most seasoned and experienced in this domain find themselves failing while arriving at a successful prediction.
To deal with the losses, you need to accept that failures are no shame. If you incur a loss and try to compensate it by taking a more significant risk, chances are you might fail again. Thus, never chase your losses.
2. Experience is a good thing.
Knowing how markets work and learning patterns of dealing with losses is the least you can do to avoid future losses. When you stay and invest in the market, you start keeping a watch on the market. Start with investments of low amounts, basically what you can afford to lose. Step by step, you will learn the highs and lows of the market and develop a pattern to skip significant losses.
3. Define your targets
After learning about the market, you start defining your objectives and targets. Simulation is helpful to give you an idea, but it barely gives you any experience of the actual market. If you want to pursue Bitcoin day trading as a part-time or full-time career, you at least ought to expect something - the money you will make at the end of the day.
Day traders look forward to earning fast and short-term profits of about less than 1% per trade. If they retain the bitcoin for a longer time, it will become a long-term investment, and thus, profits will be higher. But in this case, traders have a big bankroll (which is the overall amount of money available at their disposal). Thus, they will make a profit despite a low percentage.
4. Avoid losses
Accepting losses is one thing. Stopping future losses is another. It means once you have set a price for your trade, you have to stop at a point where you will exit the business and bear no additional risk. For example, if you purchased Bitcoin for $500, you might set a 15% stop loss. It assumes that if the value of Bitcoin falls to $450, your system would automatically sell the investment immediately. It safeguards you against a price drop even if you cannot complete the task yourself due to being away from your phone.
5. The right technology for the suitable requirement
Without having you sit all day in front of a computer, monitoring investments and calculating the risks, you can rely on efficient trading software to ease your task. Once you set up a decent trading system, you will be good to go.
How to Do Bitcoin Day Trading
This concept entails many factors, and now we will discuss how to start bitcoin day trading. When learning how to day trade cryptocurrencies, all you have to do is find a successful exchange. You can buy and sell coins 24 hours a day on a cryptocurrency exchange like Binance and more. Besides bitcoin, you can also list several cryptocurrencies you want to trade.
If you want to day-trade full-time, you can aim for an exchange that offers a wide range of different pairings. Once you've created an account with a deal, it's time to finance it. While most cryptocurrency exchanges do not accept deposits made with a debit/credit card or a bank account, a few do.
It would help if you also thought about how many you want to deposit. Always recall that cryptocurrency markets are very unpredictable, so there's always a risk you'll lose all of your money.
If the exchange you choose to use doesn't allow real-world money deposits, you can buy Bitcoin or Ethereum on cryptocurrency exchanges like Binance, Biomet, and Coinbase first and then pass it over.
Few Takeaways for successful Bitcoin Day Trading
Bottom Line
So, this was the article about Bitcoin Day Trading and how you can do it without hassle. No matter how high your expectations are or how much you are willing to risk, you have to pick the right combination of technology and methods (like speculating or chart analysis) and start trading. Always start with small investments. In this way, you will earn stable profits and proceed on the path to an experienced trader in the market. Just keep tabs with the patterns and never run behind compensating your past losses, as you might end up losing more. By adopting intelligent technological metrics like the OBV, you can determine a level where you can invest the most, and it will tell you where to stop so that you do not end up losing a fortune. Also, remember to keep an eye on trading hours and the cryptocurrency news. It is of utmost importance to start bitcoin trading as the future of cryptocurrency seems brighter than ever.