Type Here to Get Search Results !

5 Things You Must Know Before Day Trading Crypto

Day trading cryptocurrency involves entering and exiting multiple positions during trading hours on the same day. Typically, a day trader would never leave an open position overnight as they intend to profit through intraday price movements.

Although day trading is a common strategy for a traditional financial instrument, it works perfectly well for cryptocurrency.

Still, you must fully understand the fundamentals before diving into the market.

Here are some tips!

1.  Always trade with a reliable crypto exchange

Crypto exchanges allow users to buy, sell, and trade cryptocurrencies like Bitcoin using different fiat currencies or altcoins. While most crypto exchanges offer similar services, but not all are created equally. The last thing you want is a crypto exchange to disappear with your funds.

You should always look up reviews of the crypto exchanges on forums, blogs, or any active communities to provide genuine feedback. Besides, make sure the exchange has good liquidity and has good customer support. For example, Bybit offers 24/7 customer support to all of its users.

2.  Get the technical and fundamental analysis right

Understanding how the market works and reacts gives you the upper hand to make rational trading decisions even if the market goes sideways.

Firstly, fundamental analysis relies on how external factors or specific industry trends, or crypto technology developments influence the market. This analysis is often used to determine the quality of long-term investments. You need to be aware of the difference between an asset’s value and the price at which it is trading.

Technical analysis is used to review actively trading assets for a short-term investment decision. Understanding price action in technical analysis gives traders an overview of the asset’s supply and demand dynamics to determine an ideal asset’s price.

3.  Don’t underestimate the trading fees

Before day trading cryptocurrency, make sure to take a deep dive into the exchange’s trading fees structure.

A crypto exchange may waive the deposit fees, but there are maker, taker fees, and withdrawal fees. These transaction fees are charges implied when you buy an asset. For example, at Bybit, takers pay 0.075% while makers earn a 0.025% rebate.

Ultimately, you should select an exchange with less trading fees that allow you to maximize your net profits.

4.  Never invest more than you could afford to lose

The golden rule is to spend less than you earn. When the same concept applies to day trading, you can mitigate the risks of losing your funds.

Of course, you can make quick cash when trading during the crypto boom, but trading crypto can also come with extreme volatility. You must expect a crypto asset’s price to fluctuate in hours or even minutes. If you intend to take on loans to day trade in crypto, you should think twice.

5.  Never let your emotions sway your decision

A crypto veteran would agree that your fear and greed empower bad decisions. And these are the repercussions of the market noises.

Instead, work towards strong trading psychology to make rational decisions. Focus on a day trading course, join a community with reliable trading news, stay firm on your evaluations, and most importantly, learn from your mistakes.

Closing Thoughts

It is essential to understand how the market works and how you can secure your funds. Work on improving your knowledge and learning from both failures and success to become a profitable crypto day trader today.

 



from NewsBTC https://ift.tt/3rHHgGv

Post a Comment

0 Comments
* Please Don't Spam Here. All the Comments are Reviewed by Admin.