Crypto Trading In 2020: Actionable Tips For Day Trading Cryptocurrencies
Amidst a crumbling traditional financial industry, cryptos, and their underlying technology, the blockchain become more and more popular these days. the coronavirus pandemic has been shaking healthcare systems all over the world to the core and it’s been also affecting the worldwide economy.
Some countries are expecting to be hit by recession sooner than later, and the feelings of fear and uncertainty slowly become the rulers of everyday life.
In such a context, more people are turning to Bitcoin and cryptos, which have been recently seen as a safe haven, a flight to safety.
Coinbase CEO Brian Armstrong said not too long ago that this crisis will show the true abilities and potential of Bitcoin and cryptos- these are the times for which Bitcoin was created.
There are a few methods to trade cryptos out there, and one of them is day trading – this is the subject we’ll be addressing today.
Why choose day trading?
Day trading involves purchasing and selling crypto within a short period of time – 24 hours.
What’s different compared to regular crypto trading is that the trading activity going on in less than a day doesn’t require waiting for important changes to hit the market.
Some might say that day trading is the perfect choice to enjoy gains, especially considering the high level of volatility that we see in the crypto market. Here are some actionable tips for day trading cryptos.
Using a crypto trading simulator
It’s recommended that novice traders who consider starting day trading to open a crypto trading demo account, which involves trading play money.
Until you learn how the market really works, you won’t be losing your own money, and you’ll get a chance to gain more experience with day trading crypto.
Bitcoin is the most valuable crypto in the market, so you might want to consider trading it first.
Bitcoin’s price affects the prices of most cryptos, and it’s safe to say that the trading activity in the crypto space is revolving around BTC.
Diversify your portfolio
Even if you consider Bitcoin as the first option, it’s advisable not to forget about the altcoins.
When you gain enough market experience, you’ll also know what are the best altcoins for day trading.
Investing with precaution and calculating your actions
Day traders usually prefer to remain on the safer side of the market, and this means that you should avoid investing too much at once.
It’s important to understand that you will not be holding on to your coins for too long, and it’s recommended to invest bit by bit following each sell.
This will also turn out helpful in discovering buyers who seek lower amounts and you can also easily calculate your profits.
It’s also important to calculate your actions. When a crypto’s price brutally increases, you might think that it;’s the best time to hoard, but this is not the best choice for you.
There’s definitely something that’s making the price go up like that, and the same reason will probably crash the price in a few hours, so think twice before hoarding in such moments.
Considering the risks as invest as much as you can lose
Crypto trading is a risky business and out best advice is to invest the amount that you’re prepared to lose and live without.
It’s never a good choice to invest all of your life savings into crypto especially considering the enormous level of volatility mainly during these bleak times that we live in.
Staying updated with real-time news
Day traders have to remain updated on everything that moves in the crypto space because the crypto market doesn’t sleep.
Check out what are the best crypto sites out there, choose some of them, and stay tuned for real-time news.
All in all, day trading crypto can turn out to be a really profitable business once you get the hang of it. Good luck!
Brian Armstrong is the co-founder and CEO of Coinbase, one of the largest crypto exchanges in the world (its reported Coinbase holds 966,230 Bitcoin ($7B) in Cold Wallet). Prior to his involvement with the blockchain and Coinbase, Armstrong worked at Deloitte and Touche as an Enterprise Risk Management Consultant.
Coinbase is a digital currency exchange headquartered in San Francisco, California.
Eduard Watson Author
An experienced finance writer for more than 10 years, active industry watcher, and gadget enthusiast.