Tips for how you should day trade cryptocurrencies in 2019.

Day Trading Bitcoin in 2019: Three Things to Consider

Last year, April 12th, the price of Bitcoin (BTC) went up by more than 10% in one minute. In 30 minutes, the coin’s price had increased by $1000. Anyone positioned well at the time, relying on a good strategy, could have traded once and increased the value of their position by 10% in a moment. At the same time, someone shooting in the dark might have taken a significant hit in a minute. Day trading crypto can earn you outsized profits but could also cost you as many losses if you do not know what you are doing.

A decade ago, Nakamoto’s original vision saw the creation of Bitcoin millionaires, from daring investors. Years later, the coin is no longer a toy for a fringe anarchist but a vehicle for building and storing wealth. Now, with some know-how, some research, and a lot of courage, anyone can try their hand at day trading. Note that the arena is rapid-changing, so the following information on things to consider is as general as need be to be relevant over time:

The type of trading

Day trading is about selling and buying cryptocurrency or other assets such as stocks, precious metals, or securities. The trick is to ‘buy low and sell high.’ The ‘day’ aspect is about the short-term nature of such trading. Day traders fall into two categories – technical analysts and speculators. Speculators find influences from outside markets that point to a gain or loss in value. They depend on tech developments, significant adoptions, news, and hacks.

Technical analysts consider the internal workings of the crypto market. They rely on financial charts to try and predict the future from the past. Decide which of the two options will work for you and how much risk you are willing to absorb. Do you have the discipline to cut losses and move from a bad position, for example?

People make two major mistakes. When you overemphasize technical analysis, you might set your expectations too high, and it becomes your downfall. To balance, read the news to stay apprised of the conditions in the market and keep a critical perspective. Secondly, people tend to read the spread wrong. The top of the order book may show the lowest prices or the highest, but it does not necessarily mean to use such rates.

Your trading strategy

Once online and ready to trade, you need research to decide what strategy to use. Look at relevant technical analysis, different coins, and news. As a pro-tip, do not risk over one percent of your full bankroll on one trade. Bitcoin trading is about numbers but being conservative will lower your risks. It is better to collect small and be safe.

A common mistake is using improper hedging strategies. Be sure to sell and buy on many exchanges and then investing in exchanges with low prices and selling on those with the highest rates. That way, you mitigate risk.

The risks involved

While every strategy and situation will have a separate set of risks, everyday things to watch out for are like regulation and volatility. The value of cryptocurrency is growing, but there is an uncertainty in their future surrounding laws that could cripple the market. Besides, they are volatile even in the gold and stock markets. Volatility is an opportunity to trade for profit, but it also comes with unpredictability and doubt. There will also be exchange risks, so it is wise to do business with reputable exchanges.

Day trading cryptocurrency is an exciting venture for investors. Despite the uncertainty and the numerous risks, fortune may still favor the brave. There is serious potential to make a profit.

Myra M.

Myra M.

Experienced business writer with a solid track record of work in tech-related companies and online marketing.

Add Comment

Click here to post a comment