Altcoin day trading guide

If you want to own the actual cryptocurrency, rather than speculate on the price, you need to store it. Your skills will only improve if you concentrate on yourself, rather than buying coins because one of your friends suggested it. The science of reading charts, or technical analysis, can be — indeed, is — fairly involved. We advise caution here. 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. Full disclaimer.

Have a Reason For Every Trade

Cryptocurrency is still in its infancy. Traving first entered the tech scene as an idealistic notion: taking control away from big banks and governments and returning it to the people. This would be accomplished by the creation of digital currency that could be secured via cryptographic altcoib and spent, peer-to-peer, without third-parties either taking a cut or tracking transactions. That was the original vision for cryptocurrency, as laid out by the earliest so-called cypherpunks and the still-mysterious Bitcoin founder Satoshi Nakamoto. Bitcoin millionaires cropped up trwding overnight as the coin surged in value, multiplying by many thousand percentage points over the course of just a few years. This, then, was the new normal for cryptocurrency. Its ties to the once vilified financial sector increased, and today, there is a large contingent of professionals and semiprofessionals who make money shuttling value from coin altcoin day trading guide coin or even by reaping large profits from the arbitrage between different exchanges.

Have a Reason For Every Trade

Cryptocurrency trading is a very lucrative business and a perfect alternative to the holding mentality that continues to cripple the cryptocurrency community. Currently, there are several types of trading, but day trading remains the most popular. Properly conducted, day trading is hugely profitable. It takes a lot of discipline and experience to master. Even professional financial advisors and managers tend to shy from it.

Conclusion – Crypto Day Trading

Cryptocurrency is still in its infancy. It first entered the tech scene as an idealistic notion: taking control away from big banks and governments and returning it to the people. This would be accomplished by the creation of digital currency that could be secured via cryptographic methods and spent, peer-to-peer, without third-parties either taking a cut or tracking transactions. That was the original vision for cryptocurrency, as laid out by the earliest so-called cypherpunks and the still-mysterious Bitcoin founder Satoshi Nakamoto.

Bitcoin millionaires cropped up almost overnight as the coin surged in value, multiplying by many thousand percentage points over the course of just a few years. This, then, was the new normal for cryptocurrency. Its ties to the once vilified financial sector increased, and today, there is a large contingent of professionals and semiprofessionals who make money shuttling value from coin to coin or even by reaping large profits from the arbitrage between different exchanges.

The explosion of available exchanges — and information — has somewhat returned crypto to its democratic roots. Now, with a little research, a little know-how, and a lot of courage, virtually anyone can try his or her hand as a day trader in the cryptocurrency arena. Day Trading is nothing more than the process of buying or selling an asset — be it a security, stock, precious metal, or cryptocurrency.

The entire name of the game can be summed up as buy low, sell high. The object of day trading is to get into the market, take a position, keep a close eye on that position, and then exit at a profit. Some bots, or automated computer programs that do your trading for you, can produce a flurry of trades in just a few seconds.

It should also be noted that some so-called day traders maintain some positions for weeks or even months, depending on certain security goals. That sounds simple. That said, day traders can have several different ways of approaching that goal.

The two broadest categories into which one can divide day traders are speculators and technical analysts. Speculators do exactly. They try to find outside market influences that seem to indicate a cryptocurrency will either suddenly gain or suddenly lose value. The best example of this is the newshound, who carefully watches the cryptocurrency wires for news about hacks, big coin tech developments, major adoptions, and other potential market movers.

The second category is more concerned with the internal workings of the market rather than outside pressures. This kind of day trader relies on financial charts to get a feel for where the price was in the recent past and where it might be heading. The science of reading charts, or technical analysis, can be — indeed, is — fairly involved. Think of the confusing squiggly lines, bars, and candles on your average financial chart as a road map. If you know how to read it, you can say with a pretty fair degree of certainty where those lines will be going.

Despite the meteoric rise of some cryptocurrencies and the relative ease of the day trading process, day trading is not a get-rich-quick scheme. Even the best day traders rely on making small amounts of money over a relatively large number of trades. In many ways, day trading resembles gambling, albeit with slightly better odds. This is more important than it sounds. Different exchanges offer different coin pairings, fee structures, minimum trade amounts, and. Pay close attention to those fee structures.

If your trading style is likely to consist of very large volumes with very little profit made on each individual trade, those profits can quickly disappear into fees. More importantly, however, it gives you options in terms of cryptocurrency availability, fees, and liquidity. Take a look at our guide to the best exchanges for trading cryptowe have also written in-depth reviews of most exchanges so look here to find the one you wish to use.

Just in case, altcoin day trading guide — most centralized exchanges require some sort of identifying information, such as an email address, and may ask you for further identification for security purposes. Decentralized exchanges are largely anonymous.

The trade-off is that centralized exchanges function more like traditional stock exchanges, and they have in-built security systems and relatively high liquidity. Decentralized exchanges may lack ready liquidity, and every trade should be approached with a caveat emptor attitude, but your trades can be conducted in near-total privacy.

This involves individual coins, any relevant news, any relevant technical analysis, and. Most importantly, however, you need to set some ground rules for. One of the hard-and-fast rules in day trading involves never risking more than 1 percent of your total bankroll, or available investment money, on a single trade. This can be a tough one to practice. Say you see a trade that seems like a sure thing. Day trading is a numbers game, ultimately.

If you play long enough, you will definitely miss some grand opportunities. A second important factor when considering strategy is your stop-loss limits. These are your exit strategies. Most exchanges allow you to set a stop loss that will automatically exit a trade at a given price level. 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. 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. 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. No Spam. All content on Blockonomi.

The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate.

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.

Your email address will not be published. Notify me of follow-up comments by email. Notify me of new posts by email. Contents 1 What is Day Trading? You should consider whether you can afford to take the high risk of losing your money.

Related Articles. Show comments Hide comments. One Comment Tarun Jain December 13, at am. Leave a reply Cancel reply Your email address will not be published. Next What is Market Cap in Cryptocurrency? Guide to Market Cap vs. Coin Price.

Search the Blog

If the exchange that you want to use does not accept real-world money deposits, then you can first go to Coinbase to buy some Bitcoin or Ethereum and then transfer it. It is now common knowledge that you can make good money from day trading cryptocurrency. Please share:. However, many beginners lack this financial muscle or are not confident enough to pump a lot of money into trading cryptos. Once you have made profits you will want to be able to withdraw them without having problems or paying large amounts of it in fees. They offer a great range of Crypto, very tight spreads, and leverage. Your email address will not be published. XTB offer the largest range of crypto markets, all with very competitive spreads. Their altcoin day trading guide is — Stop paying too much to trade. 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. The information below is purely my lessons, observations and experience in the crypto world that I want to pass on. Altcoin day trading guide should not use funds meant for other purposes such as rent, medical care, or school. Contact Us Privacy Terms. Remember, crypto prices can crash just as fast as they have risen. The explosion of available exchanges — and information — has somewhat returned crypto to its democratic roots. That statement is familiar to every soldier serving his or her country.