Bitcoin Trading Tips – As a practice, day trading is adored by millions of traders worldwide thanks to the quick trade results you can get, as well as the potential flow of substantial profit. Not just that the thrill of day trading lies in the volatility of the highs and lows of a trade during the 24-hour timespan.
Some volatile stocks, namely currency pairs, cryptos, and specific stocks, can move an astonishing 500+ pips in a single day with ease. It’s perfectly reasonable to understand why day trading, specifically with cryptocurrency, is growing in popularity everywhere.
Drastically Increased Risk: Bitcoin Trading Tips
However, let’s not forget that high volatility, a daily cryptocurrency trading tip, also means drastically increased risk. These types of assets, like BTC and ETH, for example, can easily blow up your trading account if you fail to manage risk appropriately. It’s vital to grab a good hold over the basics and keep general know-how of advanced technicalities involved in day trading. Continue reading to learn more.
What Is Day Trading?
Simply put, day trading is a type of trading where traders buy or sell an asset for a short period (typically 24 hours). To catch some profit, how to trade cryptocurrency and make a profit, on quick market movement. And take a fair share of the market. Unlike swing trading, day trading does not involve long-term predictions, and the trader either makes a profit or a loss by the end of the day.
Must Read: How to Make Money With Bitcoin
Steps to Begin Day Trading With Bitcoin
Since Bitcoin is widely popular among day traders, bitcoin tips for beginners, most brokers offer crypto pairs to trade. Making it quite simple to start crypto day trading. That being said, due to the volatility in question, it is highly recommended to go with a broker that makes your trading more manageable, not confusing you with hidden commissions and an excessive spread.
Spread: Bitcoin Trading Tips
The spread is the difference between, how to trade cryptocurrency on finance, the sell rate, and the buy rate for a specific trading pair (market rates). Basically, the broker deducts the spread from your account as a commission for providing you with the opportunity to trade on their platform. At most platforms, the spread increases with volatility, and therefore, it’s recommended to select a broker that offers a minimal spread, especially since cryptos are highly volatile.
Commissions: Bitcoin Trading Tips
Just like spreads, commissions are a direct deduction from your profit, and they might be fixed or variable depending on the broker in question. For example, for every trade that you execute, you could be deducted a fixed let’s say $5 or dynamic amount that reflects your lot size, leverage, and profit, among other factors.
Convenient Banking and Flexibility in Withdrawals and Deposits
Trading requires a lot of energy and dedication, especially day trading, where you have to regularly analyze charts for your favorite assets. If you don’t trade at a flexible platform, it will negatively affect your performance. Imagine spending hours and hours on getting a profit, only to have your dreams crushed by the withdrawal time needed. So, with the main points put aside, let’s take a peek at what you should look for in a broker to start cryptocurrency day trading.
Best Brokers for Cryptocurrency Day Trading
Currently, there exist plenty of brokers offering great cryptocurrency day trading opportunities and prospects for just about everyone. For instance, Plus500 and eToro are known for being reputable cryptocurrency brokers and providing a flexible trading environment with low spreads, which is great considering that most of the brokers out there usually charge large sums.
Withdrawal System: Bitcoin Trading Tips
It’s also worth mentioning that the best Bitcoin brokers do not charge hidden commissions and have a robust deposit and withdrawal system in place. In this context, AvaTrade is a great trading platform suitable for beginner and intermediate traders alike. Next, it is vital to understand how risk management works in cryptocurrency day trading. Here are our two cents on how to manage risk effectively:
Start Small: Bitcoin Trading Tips
Being a newbie, you don’t need to start with a lot to trade cryptos. Start with the minimum required, and once you are confident in yourself, you can take a step further and deposit larger amounts of money into your account.
Listen to the Market
Another piece of advice is to follow the overall market sentiment. Although it’s not always right, nor does it guarantee a profit, it’s often regarded as one of the least risky indicators to follow.
Use Multiple Tools
Consider using a wide range of apps and software tools to help you learn. This means using both simple and complex market analysis tools, some of which might be available at cryptocurrency exchanges.
Here are some helpful tips you can use before locking in your first trade. As a first note, we’d like to make sure you learn the rules of technical analysis and decide your strategy. There are a lot of strategies that you can apply to ace cryptocurrency day trading. Some are:
Demand and Supply Zones
Where traders expect intense price action on specific market zones. Learn to identify patterns on the chart like ascending or descending triangles and channels.
When the price hits a monthly or weekly resistance level, traders expect strong rejection and usually sell the asset. The same goes for support levels where you buy & hold a long position.
Signals and forecasts
Following and listening to forecasts of Bitcoin and other cryptocurrencies by experts can remove a lot of the stress and uncertainty. Namely, there are a lot of day trading strategies that you can apply to cryptocurrency the main thing is that you keep learning new ones with time and experience.
The Pros and Cons of Bitcoin Day Trading
Here are some pros and cons of cryptocurrency and Bitcoin day trading
High volatility, meaning higher profits short trades, so you will have your profit report at the end of the days to trade with, as there are no daily economic reports by a central authority able to trade forex markets with Bitcoin
High volatility also means drastically higher risk. Trade every day exposes you to bad market days. You never know how much movement to expect
How to Give Yourself the Best Chance at Success
We can conclude that it is easy to start crypto or Bitcoin day trading, even with meager amounts at reliable brokers. However, before you jump into trading with real money, we recommend first creating a demo account for practice.
So, make sure to do your research, learn new tactics, and keep applying your strategies in a demo account. Then, once you are confident with what you’ve got going, start with a minimum deposit and try out your skills. If you are a beginner, don’t try to get rich overnight and trade with rough lot sizes. Most likely, you will run empty sooner than you think. Instead, set modest and attainable targets, so you’ll trade with discipline while sticking to a plan.