Want to give day trading a shot but don’t have a clue how?
It could be more complex if you intend to trade Bitcoin and other cryptocurrencies. Here are 5 tips so you can hit the ground running.
Prepare Ahead of Time
It’s true that crypto exchanges are open 24/7 and are unlike stock trading, but the same advice rings true- you should prepare for the day ahead and have all your tools and systems ready before you start trading.
The best things to do is to check the news for anything related to Bitcoin or the cryptocurrency you invested in and see if there’s any upward or downward movement. This serves as your markers, e.g., to sell Bitcoin or to buy more depending on the forecast.
Discipline is Important
It’s okay to get excited on something so new, but remember that emotions can get the better of you, especially when it comes to financial investments.
Day traders will usually have a plan they execute throughout the day, and there’s very little chance that they go off-course. This should be the same when you’re working the exchange. Have a clear goal at the end of the day and do your best to meet it at the end.
Resolve Risks Quickly
Risk is a constant factor in day trading, and in the world of cryptocurrency it’s constantly hovering over your shoulder.
Due to high volatility the risks involved in owning Bitcoin is great. However, you’ll have a level of control over it, specifically by setting a stop loss and selling the crypto token before it completely falls in value.
Day traders will need to know the value of Bitcoin at all times. When it falls, decisions must be made quickly in order to recoup the investment. Otherwise, you’ll fail time and again and set yourself up for nothing.
Bitcoin day traders can get a huge advantage when they sign up for an automated trading app. If you want to complete actions even when you’re away from your desk, click here.
Over-Trading is Not Always the Solution
Yes, it’s tempting to trade and trade and trade until all your digital assets are turned into profit but then you’ll run into trouble sooner or later.
It’s better to complete a single action rather than many small ones because you’ll have to deal with things such as transfer fees, transaction fees and the like. Also, sometimes it’s better to hold on to your digital asset as it could rise more than you initially hoped for.
Losses Are Part of Day Trading
Seasoned day traders will say that there’s still a chance of making money as long as you’re not bankrupt. This is the extreme view but there’s still some truth behind it.
It’s okay to experience losses every now and then, but the key is to complete actions so that you won’t blow all your money in one move. You’ll inevitably learn something new as long as you’re in the game, and the more you learn the better you become at day trading.