If you want to know how to day trade cryptocurrency, you should be aware that you can make a lot of money doing it, but the same risks that exist on traditional markets also exist on the cryptocurrency market. In other words, it can be a way to earn high-profits, but it is a risky road.
You need to be disciplined, follow the news, and study the market carefully if you want to know how to day trade cryptocurrency. You also need to set financial goals for yourself. One cryptocurrency day trader named John Omar sets a 1% profit goal for himself every day.
He’s looking to steadily grow every day, and a 1% daily growth means that the $1,000 he began investing with was worth $37,783 after one year, and $1.4M after year two. Now, if day trading is going to be your full-time job, you do need to understand that if you are cashing money out your 1% gain per day won’t reach $1.4M in just a year, because you’re not letting the money continually compound.
In How to Day Trade Cryptocurrency, you need to make multiple trades per day so that you can earn your 1%. That might mean trading for an hour or two on some days, while other days might require full work days.
So here is what to do if you want to know how to day trade cryptocurrency.
- First, learn which coins you should trade. Start by looking at the ones that are top by market cap. They are the least volatile and most likely able to retain long-term value.
- Second, if you want to know how to day trade cryptocurrency, you need to do your altcoin research. You want to ascertain that a coin is legitimate, and part of an innovative project. This will lead to more profitable and successful day trades.
- Third, you’ll need to sign up to an exchange. Transferring coins from wallet to wallet can be slow, and while you’re waiting for coins to transfer, you could be losing out. That is not how to day trade cryptocurrency. Be part of the exchange and leave your tokens there. But find a reputable one like Coinbase or CEX.
- Fourth in your how to day trade cryptocurrency list, is make lots of small trades that total significant earnings. You may make some trades that net you $8, but if you are making dozens of trades, you will be in position for bigger gains based on cryptocurrency price fluctuations.
- We touched on number five earlier, but it is good to repeat in our how to day trade cryptocurrency list. Use your trade and stop points to protect yourself from becoming overextended and losing when a coin loses value.
- Finally, learn about technical and fundamental analysis. When you are learning how to day trade cryptocurrency, this will give you the information you need to decide on which are the right coins for you.