What Is Intraday Trading
Intraday trading, also called day trading, is one of the trading strategies used in both the stock and crypto market. It means buying and selling stocks/cryptocurrency on the same day. The purpose behind intraday trading is to reap benefits by price movements during the same trading day, i.e. before the market closes. However, the investor does not get ownership of the stocks in intraday trading. A person can do intraday trading through online trading platforms.
Are There Preferred Coins For Same Day Trades
Crypto volatility plays a huge role in day trading success despite its roller-coaster character. Price swings open up decent profit-making opportunities for same-day buy and sell traders. For this reason, part of your day trading strategy should be the in-depth study of crypto volatility.
At Bingbon, we have excellent bitcoin and altcoin volatility and liquidity charts to guide your day trading strategy. Choose the most liquid digital currencies for day trading and trade when volatility and market demand are in your favour.
Bitcoin is the most liquid and one of the most volatile cryptocurrencies, so it is a favourite same-day buy and sell token amongst traders. You can trade using smaller market cap cryptocurrencies, but you stand a higher risk of facing massive instant price crashes.
Pick Up Coins With High Volatility And High Liquidity
As previously discussed, the number one choice you need to make is to pick coins that have high volatility and high liquidity. If youre not day trading Bitcoin, which is the most liquid coin out there, and you like the altcoins, try to pick those coins that have good liquidity and volatility.
There are more than 1600 coins on the market and growing. By following only the top cryptocurrencies, youll reduce your area of selection.
Day trading smaller cryptocurrencies can also be a very lucrative business, but there are higher risks. Remember, crypto prices can crash just as fast as they have risen.
Moving forward, youre going to learn how you can make money crypto day trading.
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Factors To Consider When Buying Bitcoin
Despite its imperfect customer service track record, it’s no surprise that most bitcoin buyers go to Coinbase. It has the largest volume of trading, venture backing and makes a complicated process fairly simple and user-friendly.
Still, every cryptocurrency and exchange has its own protocols and rules, some of which are more stringent than others. Some require that you verify your identity before buying and selling. Some enforce strict buying limits, while others will take any amount of money you’re inclined to part with.
Sometimes there are limits to the amount of bitcoin you can acquire.
With the price of bitcoin fluctuating dramatically from hour to hour, the transaction time — how quickly currency is transferred from your bank account or credit card to your bitcoin wallet — can vary widely depending on which exchange you use and your payment type. And then there is the matter of fees, which can quickly erode your balance. We’ll take a look at each of these factors below.
What Are The Challenges For An Arbitrageur
During times of high network congestion, transferring a crypto asset from one exchange to another would be difficult. To generate high profits from a single arbitrage opportunity, the arbitrageurs have to execute large trades.
The crypto traders are very much exposed to risk because they need to hold crypto assets in wallets provided by crypto exchanges.
Low-volume exchanges taking several minutes for trade cannot support an arbitrageur in a highly volatile market.
Read Also: How To Get Free Bitcoin On Cash App
Mistake #: Overemphasizing Technical Analysis
We started this article off by saying that you should consider developing a technical strategy for day trading, rather than trading based on your emotions. While thats true, it can also be risky to focus too much on technical indicators and ignore whats actually happening in the market.
For instance, you might have a day trading strategy that exploits differentials in tightly correlated cryptocurrencies: BTC and ETH, for example. If you think that BTC and ETH are tightly correlated and you see that ETH is disproportionately low, you might buy ETH with the expectation that ETH will rise up again to restore its typical relationship with BTC. However, this might be a case of contagion: the whole market is going down. In this case, your technical analysis could be your downfall: youve just bought into a position thats still going down.
You could try this instead: Be sure to keep reading crypto news and price analyses not just staring at charts. Even though you shouldnt give in to the FOMO and FUD generated by many crypto articles, you still need the news in order to stay apprised of market conditions. Also consider setting stop-loss orders to ensure that your losses will be mitigated in the event of something like contagion.
Where To Buy Cryptocurrency
To learn how to buy cryptocurrency, youll first need to know where to buy cryptocurrency. Just a few years ago, there were only a few places to buy and sell cryptocurrencies. Now, though, there are a lot more! Lets look at the different places and ways you can get your crypto.
How to Buy Cryptocurrency at Cryptocurrency Exchanges?
Cryptocurrency exchanges are online websites that let you exchange your local currency for cryptocurrency. Exchanges are the most popular way of buying cryptocurrency. I recommend newbies to use these exchange websites as they are easy-to-use and quick to set up.
Payment Method: Most of the exchanges accept payment by bank transfer or credit card, some of them also accept PayPal.
There are a lot of exchanges for you to choose from. Each one of them has different levels of security and they each accept different types of payment methods. Most exchanges will ask you to follow the steps below before you can start buying cryptocurrency.
If you are not able to get into an exchange for any reason or would like to buy or sell your cryptocurrency private sale, We Buy Sell Cryptocurrency USA Worldwide can assist!
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Buying Your First Stocks: Do It The Smart Way
Once youve chosen one of our top-rated brokers, you need to make sure youre buying the right stocks. We think theres no better place to start than with Stock Advisor, the flagship stock-picking service of our company, The Motley Fool. Youll get two new stock picks every month, plus 10 starter stocks and best buys now. Over the past 17 years, Stock Advisors average stock pick has seen a 686% return more than 4.5x that of the S& P 500! . Learn more and get started today with a special new member discount.
Why You Can Trust Bankrate
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. Weve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our investing reporters and editors focus on the points consumers care about most how to get started, the best brokers, types of investment accounts, how to choose investments and more so you can feel confident when investing your money.
The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice. Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives. Investing involves risk including the potential loss of principal.
Also Check: How Much Does Robinhood Charge To Buy Crypto
Final Word On Day Trading Rules
In Canada, it is important you adhere to all day trading equity, non-margin and settlement rules. In particular, the superficial loss rule is the most important to keep in mind, as it often trips up traders. However, all of the above are worth careful consideration. With this information, you should now be able to trade confidently in the knowledge you are trading within legal parameters.
Is It Business Income Or Capital Gain
The income you get from disposing of cryptocurrency may be considered business income or a capital gain. In order to report it correctly, you must first establish what kind of income it is.
The following are common signs that you may be carrying on a business:
- you carry on activity for commercial reasons and in a commercially viable way
- you undertake activities in a businesslike manner, which might include preparing a business plan and acquiring capital assets or inventory
- you promote a product or service
- you show that you intend to make a profit, even if you are unlikely to do so in the short term
Business activities normally involve some regularity or a repetitive process over time. Each situation has to be looked at separately.
In some cases, a single transaction can be considered a business, for example when it is an adventure or concern in the nature of trade. Whether you are carrying on a business or not must be determined on a case by case basis. For more information, please review our archived content on an adventure or concern in the nature of trade.
Some examples of cryptocurrency businesses are:
- cryptocurrency mining
- cryptocurrency trading
- cryptocurrency exchanges, including ATMs
Also Check: What Is Smart Contract In Blockchain
Buying And Selling Bitcoin Explained
A quick and dirty introduction to trading the worlds most exciting cryptocurrency.
Before you jump into this overview of how to buy and sell bitcoin, check out our first article in this series, Bitcoin, explained.
The original bitcoin logo.
Mining bitcoin isn’t the only way to get your hands on the stuff, you know.
In fact, mining bitcoin is a complete pain in the buns. At a minimum, you need specialized software, a sophisticated hardware rig to run it and a considerable amount of electricity to power the whole thing.
Really, the simplest way to amass bitcoin is to just buy it. Of course, that’s something of a process in and of itself.
Before you’re ready to ride the bitcoin rollercoaster, you’ll need to establish an account with one of the major exchanges , connect a bank account or credit card and transfer money over. That process, which we break down below, should take roughly 10 minutes or so. Unless, of course, an exchange is suffering some sort of outage — an increasingly common occurrence.
Figure Out How Much Bitcoin To Buy
The first step is to actually figure out how much you want to bet on Bitcoin. The quick answer is probably: buy as much as youre willing to lose. When you trade Bitcoin theres a chance you could makeor losea lot of money. Many people have lost a fortune to Bitcoin, and some have become overnight millionaires.
Bitcoin used to cost just fractions of pennies, in 2017, the price skyrocketed to around $20,000 and at the start of 2021, it was worth over $50,000.
Before you invest a penny in Bitcoin its wise to make sure you enough money to keep the cat fed, have a solid emergency fund and retirement plan. Then figure out how much money you want to invest in Bitcoin.
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How Do I Keep My Bitcoin Safe
Hardware wallets are the most secure way to store your bitcoin.
If you’re trading lower amounts, it’s probably OK to use the wallet provided by your exchange or another software wallet . If you’re going big, you almost certainly want a hardware wallet, of which there are a number of complicated, encryption-related options.
We’ll take a look at the pros and cons of each of these options in a future article. In the meantime, bitcoin.org provides some good introductory information.
Webull Commissions And Fees
Webull charges no commission on stock trades, but youll still need to pay some minimal fees such as Securities and Exchange Commission transaction fees and fees from the FINRA that apply to stock, exchange-traded funds and options trades.
When it comes to shorting stock, youll need to pay for the stock loan charges on the stock youll need to borrow to make the short sale. This amount depends on the availability of the shorted stock, the prevailing broker loan rate and the margin account interest rate.
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Where Can I Buy Bitcoin
There are many other points of entry into the bitcoin universe, however. You can play day trader and use a regulated exchange like GDAX . On the opposite end of the spectrum, you can find someone local willing to trade cash for bitcoins, if you’re into meeting up with strangers in parking lots. And if you operate a business, you can accept bitcoin as payment for goods or services.
GDAX: where young urban professionals go to trade digital assets.
Or you can go the high finance route. On Monday CME Group, the largest derivatives exchange in the world, made it possible to trade in bitcoin futures, opening up another avenue and marking another milestone in the cryptocurrency’s evolution. And Bloomberg reports that Goldman Sachs is planning to launch a bitcoin trading desk in 2018.
What Is Day Trading
Here is a more in depth look at what day trading really is.
Day trading makes use of technical analysis to be able to buy and sell cryptocurrencies on the same day. It is a form of active trading, where traders are required to keep track of the changes in the market within a single day.
To earn a profit, day traders rely on the volatility of the cryptocurrency market. This volatility causes the market prices to constantly move up and down, creating upward and downward trends that may change every hour. Once the traders have identified trends, they then use the proven and tested strategy to Buy low and sell high.
Day trading is much riskier than long-term investments because price slippages or large drops will lead to a loss. Therefore, the volatility of the market will help day traders earn a profit, but it can also cause a large loss if traders are not careful.
When practicing day trading, traders must be armed with the essential knowledge and skills to perfect the trade. A lot of practice and paper trading is needed before moving on to actual trades. Although difficult, day trading can be extremely rewarding.
Recommended Reading: What Are The Top 10 Cryptocurrencies
Earning Cryptocurrencies Through Mining
Cryptocurrencies are commonly acquired in two ways:
- bought through a cryptocurrency exchange
- earned through mining
Mining involves using specialized computers to solve complicated mathematical problems which confirm cryptocurrency transactions. Miners will include cryptocurrency transactions into blocks, and try to guess a number that will create a valid block. A valid block is accepted by the corresponding cryptocurrencys network and becomes part of a public ledger, known as a blockchain. When a miner successfully creates a valid block, they will receive two payments in a single payment amount. One payment represents the creation of new cryptocurrency on the network and the other payment represents the fees from transactions included in the newly validated block. Those who perform the mining processes are paid in the cryptocurrency that they are validating.
The income tax treatment for cryptocurrency miners is different depending on whether their mining activities are a personal activity or a business activity. This is decided case by case. A hobby is generally undertaken for pleasure, entertainment or enjoyment, rather than for business reasons. But if a hobby is pursued in a sufficiently commercial and businesslike way, it can be considered a business activity and will be taxed as such.
Buy And Sell Bitcoin Same Day
Can I buy and sell Bitcoin same day? The answer is yes, you absolutely can! Although many people prefer to apply the buy and hold strategy to their cryptocurrencies, buying and selling on the same day is also possible, and not just for Bitcoin! All the altcoins that are available for trading in the market can also be bought and sold on the same day.
First, let us look at the buy and hold strategy. This strategy requires traders to buy a cryptocurrency and hold on to it for a few months or years. This is an easy way to earn money from cryptocurrencies because you will simply allow the coins value to grow while you are holding it.
Once the value has grown to an amount that is much higher than the price you bought it at, you can then sell the coin and make a profit. This strategy is great for people who do not have the time to monitor daily charts to buy and sell their crypto assets.
In contrast, there is the strategy of buying and selling within a single day. This strategy is called day trading, where a trader buys and sells coins within 24 hours. With this type of strategy, all trades must happen within the said 24 hours. Thus, traders are more pressured to complete trades at a profit because the clock is ticking.
Also Check: How To Invest In Crypto Mining
Where Can You Buy And Sell Cryptocurrencies
Traditional brokers have the advantage of offering a wide selection of investible securities, though typically you cant trade Bitcoin directly, only futures. Meanwhile, crypto exchanges are limited to digital currencies, though you can own the currencies directly and can often buy several, rather than simply Bitcoin or Bitcoin futures, as you would with a general broker. And PayPal has also gotten in on the act, allowing U.S. users to buy and sell cryptocurrencies.
Here are the best brokers for cryptocurrency trading, including traditional online brokers, as well as a new specialized cryptocurrency exchange. You might also want to check out which brokers offer the best bonuses for opening an account to determine where you can get a little extra.