Day trading Crypto Currency
This article is going be a small introduction into crypto currency and how to make money trading them on a daily basis. Since the major interest the world have been taking in crypto currencies many have started to trade for the first time, trying to turn a profit on the rollercoaster ride that is crypto trading.
So, Why Crypto?
The crypto market is different from many others markets and if you want to start trading on it you should get acquainted with the things that define it. First of all, as mentioned, the marked is a rollercoaster. The small sizes and high interest of trades made on the market means it takes huge price swings and as a day trader one should stray away from the tried and tested strategies used on more stable markets. The large swings make for good profits if handled right and this has been what has lured trades from all backgrounds to this market.
There are no bulletproof strategies to go with, but a very used method amongst crypto traders involved what is called “stop-loss orders”, which is a way of controlling potential losses. Put it at about 2-3 percent, depending on if you are in it for a short or long term. Set it higher if you are in it for longer. You should also consider limiting your trading to weekdays, rather than common holidays and weekends. The most part of all trades are made in weekdays and taking part in the action when most of it happens, will maximize the profit per transaction.
For a long time the crypto markets have been called the Wild West, because of its unregulated nature. This is not completely the case anymore, but the wise trader should still keep updated on which platforms and crypto dealers are trustworthy and which are scams.
Another trap you can fall in is public sentiment. Given that crypto currencies are gaining huge amounts of attention, there is bound to be a lot of sensationalistic journalists striking while the iron is hot. If you want to take advice from the public’s sphere, it is important to first check your source and see if other advice the source has given holds up.
Where and how?
There are plenty of crypto currency exchanges available and as a daytrader it is important you research the different structures before signing up to any of them. An important point to look at is the fees on transactions, which can eat away a big part of profits for beginning traders that do not make large trades. Other thing to consider when choosing exchange is the relative price of currencies and how much slippage might be applied to your trades; you do not want a high slippage since it can change the terms of a trade. If you doubt what to go with, check for recommendations on public forums, the community around crypto trading is usually very helpful.