Beginners guide to successfully day trading Bitcoin Receive discount for life on all your Binance trading fee's Rating: out of 5 (45 ratings) 1, students Created by Richard Todd. Last updated 5/ English Add to cart. Day Money-Back Guarantee. What you'll learn/5(42). Oct 10, · A day trader executes several trades per day. He or she is the opposite of a HODLer. For example, if you buy bitcoin in the morning, your aim is to sell it for a profit in less than a day – usually within a few hours or even minutes. Nov 21, · Bitcoin Trading Guide – Our Top Strategies Trading Bitcoin is often touted as a get-rich-quick scheme, but, in reality, it’s much more complicated than that. Becoming a Bitcoin trader can be a rewarding way to turn a profit, but you can’t run in bitcoinlife24.de: Mikhail Goryunov.
Guide to bitcoin day tradingDay Trading Cryptocurrency: Crypto Trading Strategies
A Bitcoin day chart focuses on its price action for a specific day. You can also view changes within a specific timeframe, which helps traders make more informed decisions. Whilst there is no shortage of line and bar charts, one of the most valuable types is the candlestick chart. It offers plenty of valuable information in a concise form. Here is what the chart can tell you:. There is a lot more information to extract, which will hold significance in your trading.
Trends show the momentum of Bitcoin price changes in a particular direction. You can identify these patterns on a chart and make decisions based on that data. Peaks in an uptrend and throughs in a downtrend form a trend channel, which is a commonly used concept in the technical price analysis. The channels show where Bitcoin is trading at a particular time and compares it to the overall direction. Price changes are not linear.
That is why technical chart analysis utilizes levels of support and resistance — they showcase short-term trends within the overall trend. Resistance shows where an upward trend is expected to pause or rebound. That means that there are many buyers concentrated at that time.
Resistance can be used as an exit point for a transaction. A level of support can be used to predict where a downward trend can pause or rebound. This can be used as an entry point. Market orders are the fastest way to enter or exit a trade at the best price available at the time. However, instant execution means that the price becomes secondary.
When you place a limit order, it will only be triggered once Bitcoin reaches the price you set. Thus, you may get a better price if you are patient enough. Bear in mind that the price should be profitable for you but still realistic. The limit order will not be executed until there is a seller or sellers willing to accept the price that matches yours. If the market price is lower, it simply will not execute your order.
Here are the benefits of limit orders:. However, some aggressive trading techniques do not suit limit orders. In situations when fast execution is more important than the price difference, you should opt for market orders. When you are day trading, the activity on the exchange occurs very sporadically.
In the above section, I briefly discussed what day trading cryptocurrency actually is and some of the crypto trading strategies people use. This section is going to talk about the mental side of trading, which is probably the most important thing to consider. Firstly, there are one major difference between day trading cryptocurrency and day trading real-world assets.
The reason for this is volatility. Volatility is when the price of an asset moves up or down really quickly, meaning it can either be a great success for the trader or alternatively a great failure. For example, if you were day trading stocks on the NYSE New York Stock Exchange , it is very unlikely that the prices would change that much in a 24 hour period.
This is because they are safe companies that have been operating for a long time. Of course, prices still go up or down, but compared to cryptocurrencies, it would generally only be by a small amount. On the other hand, the prices of cryptocurrencies are very volatile. In some circumstances, even more. Anyone that bought the coin towards the start of the day would have made a lot of money, however, the people that bought it at its highest price would have lost the majority of their investment.
The E-Coin example is why it is important to understand that day trading Bitcoin and other cryptocurrencies will not always go to plan. You have to be able to accept losses when they happen, as this is a part of trading. Even the most successful traders in the world make losses, as it is impossible to always make the correct prediction. Chasing losses is the act in which a trader experiences a bad loss and they attempt to make it back by taking really high risks.
This is one of the main reasons why the majority of traders fail. You have to accept that you will always make losses at some point! Before you even think about depositing funds into your new trading account, it is really important that you practice first.
Although none of the major cryptocurrency exchanges offer a demo account, a good place to start would be Coins2Learn.
Coins2Learn offers a trading simulator that allows you to trade using fake money. The platform is really good for beginners and they even offer tips and how to become successful. You can access their website by clicking this link! Once you have a better understanding of how the markets work, the next step is to do the real thing.
This is why it is important to start off with really low amounts. In fact, the amounts must not be any larger than you can afford to lose. At this stage of your day trading cryptocurrency career, you will be learning about the highs and lows of the markets and most importantly, improving your skills and knowledge.
Once you have figured out how the markets work and you feel you are ready to start trading with real money, you now need to set yourself some targets. This is really important as if you are planning to do this as your part-time or full-time job, you need to have expectations as to how much you hope to make.
These traders will have a very large "bankroll", meaning that they can still make good money even if the percentage gains are small. Although this sounds like a small amount, in the long run, this will protect you from going broke. Another important aspect to day trading cryptocurrency is that you set yourself a stop loss. A stop-loss is when you enter a price that you want to automatically exit your trade. This protects from you a sudden decline in price, or if you were not at your computer to do it yourself.
If you feel that you will not have the mental desire, time or patience to become a day trader, you could always consider long-term investing instead. Long-term trading is far less stressful, as once you buy a coin you can leave it to grow over a longer period of time. This could have been achieved without you needing to sit at your computer all day to check for any price movements. You can also apply the same trading techniques too, such as setting stop-losses or market limit-orders.
However, if you are certain that you want to become a cryptocurrency day trader, then the next part of my guide is going to show you how to get started! Looking for more in-depth information on related topics?
We have gathered similar articles for you to spare your time. Take a look! Learn how to make money with Bitcoin in the latest making money with Bitcoin guide.
Trezor VS Ledger: the complete overview of the two hardware wallets. Now that you know what day trading cryptocurrency requires, as well as what you need to consider, I am now going to show you how to get started!
The first step when looking at how to day trade cryptocurrency will require you to find a good exchange. A cryptocurrency exchange will allow you to buy and sell coins 24 hours per day. It is important to think about what kind of cryptocurrencies you are looking to get involved with. If you are looking to day trade full time, then it is well worth choosing an exchange that has lots of difference pairings listed. Note: A pairing refers to the two coins that are being traded. It is also important to find an exchange that has lots of liquidity.
A related concept is the limit sell order, which automatically closes a trade when your coin reaches a certain higher price. Some may be free, and some may be part of a service. We advise caution here. Moreover, different bots suit different trading styles, and they can and do make significant mistakes.
To become a successful trader, you are going to have to know about Technical Analysis — that is the ability to read and analyze the charts using a number of methods and techniques.
Knowing these will allow you identify trends and make predictions about price action. We employ a number of Analysts who create price charts here on Blockonomi.
Take a look at their posts which will help you start to recognize the patterns yourself. So, when do you jump back out? You should always factor in fees when deciding when to exit a trade. After all, if your profit disappears entirely into trading fees, did you make a profit at all? Individual comfort is also something to consider.
How small is too small for you? Sooner or later, the question of taxes is going to come up. A loose rule, however, is that day trading is going to be governed entirely by short-term capital gains rules. These can be high — as much as 40 percent. So, in addition to your expected profit loss from exchange fees, you need to take on your expected tax burden. Basically, any coin-to-coin trade or coin-to-fiat trade is a taxable event. A tax professional can help you select software to keep track of your trades to make tax filing simpler, and the professional may even be able to help you decide what your acceptable level of profit should be before you pull the trigger and create a taxable event.
Day trading has the potential to generate both large profits and large losses. A conservative trading strategy is highly recommended for everyone, particularly the beginner. There are exchange fees to be paid, and the tax man will ultimately come knocking for his share.
If the game seems too hectic, or the work outweighs the rewards, consider a different strategy, such as long-term holding or becoming involved with a professionally traded fund that you can invest in much as you would a common mutual fund. Contact Oliver blockonomi. Hey Oliver, great informative article for beginners!
You rightly said that day trading is NOT a get-rich-quick scheme and most of the new crypto day traders will lose money initially. For those who are beginner, shorting basically means that you predict that the price of the crypto is going to fall. You make money when it actually does fall. This way, even if you are predicting a bullish run on the crypto, having some investment in shorting will minimize your loses in case the price falls and goes against your predictions.