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The 3 Best Tips to Start Day Trading Crypto
Day trading is one of the many investment strategies used by investors to make a profit. It is, however, completely different from traditional buy-and-hold investments.
Here, investors look at the long-term performance of a company, but this is not the case with day trading. Instead, day traders are constantly looking for immediate profit opportunities.
They rely on different resources and tools in order to be successful, which includes trading simulator software and stock screening. By doing this, day traders can take advantage of a couple of things to earn money. Do you want to start day trading crypto? Use these tips in order to make it successful!
Choose your investments
Once you are sure that you want to start day trading crypto, you need to select where you want to invest in. As a crypto day trader, you need to be aware of market volatility. The exact same market condition that scares the buy and holds investors, is the chaos that offers possibilities for day traders to earn money.
Volatility and liquidity are two important elements for crypto day traders. You need these to actively partake in the crypto market. Do you know what a blockchain does, including its governance, protocols, and network size? This way you can assess the potential of your investments. For starters, you can consider trading with a small account first. Here’s a good resource from VectorVest you can read for more information.
Choose a platform
Another important step a day trader needs to take is deciding what platform will be used. It is good to know that there are a few different websites you could use for crypto day trading. Comparing them, called vergelijken in Dutch, is very important so you are able to decide which platform you will use.
Some people think the first choice is the best choice, but this is not always the case. Starting crypto day traders should know the options and the differences between the many crypto exchanges, although this can be difficult. By the way, you should not only look at the transaction costs but also focus on the supported cryptos and deposit methods.
Choose a trading strategy
Crypto day traders use a lot of different techniques to make a profit with for example altcoins on short-term fluctuations in the markets. A crypto day trader should create a successful strategy. It needs to be backed by research, while well-led plans for when the day trader should enter and exit are important as well. Below you will find a few of the best strategies you can use when day trading crypto.
A trading bot is an automated software tool used by crypto day traders to buy and sell financial instruments. This is done at a preconfigured time, although it can also be done when predefined conditions are met in order to make gains. These trading bots are created to increase day trading profits, while they minimalize losses and risk as well.
Range trading pinpoints both stable low and stable high prices, which is done so it can capitalize on sideways markets. These prices are shown on charts as support levels and resistance. Day traders can apply range trading to identify a good period to buy cryptos when it is oversold or sell the coins when it is overbought. By doing this, they can earn money.
The long straddle is often referred to as the option straddle, buy a straddle, or just straddle, and it involves two purchases: of a put and call order. These are on the same crypto, expiration date, and striking price.