Thoughts On Day Trading
Dont dismiss this system because its simple. I have made a career out of this type of thing.
Many traders choose to fill up their charts with all sorts of things. Trendlines, support resistance levels, fib levels, MACD, RSI, etc
When you’re day trading you need to be able to think quickly, and if you’re processing too much data or metrics it is going to confuse.
Day trading is hard enough because you can spend long hours at the pc, waiting for a setup to come along. This can lead to lapses in concentration.
After sitting for hours, worrying when a setup will come along, and questioning whether you are going to make money that day it’s easy to start placing trades you shouldnt.
Also, trading is the most emotional type of trading there is. Money can be made, and lost in record time, which can lead to overconfidence or fear of the market.
You need a clear head when day trading cryptos.
If you win money quickly, you can become greedy. If you lose money too quickly it can start you on a path of revenge trading.
Yep, day trading is hard but is also why we are compensated so highly for it.
Trading By Fomo And Fud
You can admit it, itâs fine, weâve all been there. Weâve all read the news that Bitcoin is going to crash and freaked out and made a sell order but this is something you need to control when day trading.
Trading on emotions as opposed to analysis will more often than not result in big fat losses. If youâre not wary then you can get caught up in all the noise which surrounds this crazy industry. News cycles, blogs, different forums and random Twitter celebrities can not predict the future so donât give them too much attention.
A more sensible route to take is to come up with your own trading strategy using various indicators and conditions that you commit yourself to. Thereâs nothing wrong with reading the crypto news but take everything with a grain of salt and never ever make trading decisions because of unfounded rumours. These are usually debunked and essentially you just shouldnât buy because you have fear of missing out or FOMO.
Are Penny Stocks The Same As Day Trading
No, they aren’t. “Penny stocks” and “day trading” are two entirely separate terms, but they are often found together in various contexts. Penny stocks are simply stocks that trade for less than $5. Day trading is the act of buying and selling a stock in the same trading day or within a similarly short time period. Many day traders choose to focus on buying and selling penny stocks, but day trading is possible for all stocks, even blue chip stocks.
Some day traders buy and sell primarily penny stocks because of the possibility of a high percentage gain in a relatively short period of time. A stock priced at $1 would only need to gain $1 of value for an investor to realize a 100% return on their initial investment. By comparison, a stock trading at $100 would have to gain another $100 in value before that same 100% gain would be achieved. Day traders sometimes try to exploit quick upward movements in penny stocks to capture large percentage gains — despite stocks’ movements during any single day being incredibly unpredictable and the gains far from guaranteed.
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How Much Money Do I Need To Trade Cryptocurrencies Why It Matters
You can start trading Cryptocurrencies with a few hundred dollars. But how you manage such a small amount will either make or break your account. You can start with a lot more, say a few thousand dollars, but the same trading rules always apply.
Assuming you have deposited your money with a regulated broker or exchange, that’s the first step. Whatever money you have put aside for trading cryptocurrencies, your priority is to protect your capital at all times.
As Crypto moves so fast, losses can quickly eat into your capital. If you are serious about making money from trading cryptocurrency, you must set up a risk management plan to protect your account. A guideline for this is to trade no more than 1% risk on each trade. So if you have, say, $200, you can only risk $2 per trade.
For this, you need a broker that offers micro-lots.
If you have come to cryptocurrency trading for big, fast gains, think again. Play the slow game, and you stand a chance of getting ahead.
Even if you start with, say, $5000, your risk management stays the same, only risking 1% of your account. $5k may seem like a lot of money. In a way, having more capital can be tricky. You may be inclined to risk more because the extra money feels like a safety cushion.
Trust us when we say that an attitude of carelessness will rapidly reduce your cryptocurrency account down to nothing.
Accept that trading cryptocurrencies will not make you rich right out of the gate.
Decide How To Store Bitcoin
Bitcoin can be stored in two kinds of digital wallets: a hot wallet or a cold wallet. With a hot wallet, transactions generally are faster, while a cold wallet often incorporates extra security steps that help to keep your assets safe but also make transactions take longer.
With a hot wallet, bitcoin is stored by a trusted exchange or provider in the cloud and accessed through an app or computer browser on the internet. Any trading exchange you join will offer a free bitcoin hot wallet where your purchases will automatically be stored. But many users prefer to transfer and store their bitcoin with a third-party hot wallet provider, also typically free to download and use.
Why choose a wallet from a provider other than an exchange? While advocates say the blockchain technology behind bitcoin is even more secure than traditional electronic money transfers, bitcoin hot wallets are an attractive target for hackers. As Bitcoin.org warns: Many exchanges and online wallets suffered from security breaches in the past and such services generally still do not provide enough insurance and security to be used to store money like a bank.
There are many hot wallet providers, offering a range of wallet types. Here are a few:
Although some hot wallet providers offer insurance for large-scale hack attacks, that insurance may not cover one-off cases of unauthorized access to your account.
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Deciding Totally On News Announcements
Trading based on emotions will lead to massive losses. Beginners become trapped in the chaos that surrounds this weird market. You shouldnt bother listening to news stories, websites, blogs, and random Twitter personalities. As they are unable to forecast the future.
Theres nothing bad with watching the headlines. For that, you should usually take it all with a pinch of salt and never bet due to false reports. A rather more sensible goal is to define your unique trading. That totally depends on multiple signals and criteria that you stick to.
Do I Need To Spend Time Paper Trading Cryptocurrencies
It’s always advisable to spend a few months paper trading. You can open a demo account or document notes of crypto prices. Set an entry and exit price and assess your results.
Time spent practising day trading cryptocurrencies will not be time wasted. Because of high volatility, trading crypto can bring significant losses for the uneducated trader.
Become skilled at analysis, know your entry and exit points, and where to set your stop loss. Practice these things until it becomes second nature.
When you are making consistent profits, then tentatively venture into live day trading crypto with micro-lots until you can prove you can return regular profits under the pressure of day trading with real money.
It’s essential to remain realistic about what is possible, especially if your trading capital is under $500.
It takes time to learn how to trade cryptocurrencies.
Invest time in educating yourself on cryptocurrencies because it will reap the rewards and help you to avoid unnecessary losses. Spend time watching the cryptocurrency charts, noting how the price moves and what patterns, if any, form on the charts.
Invest in a Cryptocurrency training course if your budget allows.
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Rely On Wrong Tools In Day Trading
Cryptocurrency wallets are made to keep your money safe for a long time. Shifting money from a wallet to an exchange can take some time. Storing almost all of your cryptocurrencies on a digital wallet and transacting on an interchange is a smart tactic to avoid risk.
How Much Money Can I Make As A Day Trader Final Words
All scenarios, and income potential, are assuming you are one of the few day traders who reaches this level and can make a living from the markets. At the beginning of article it was stated that a large group of day traders failonly about 4% of people who attempt day trading will even be profitable. The very profitable traders are a smaller percentage.
Each market uses different capital amounts, so dont think one market is better than another based solely on the dollar returns. The major distinction is simply that to get involved in stocks you need the most capital, and you need the least to get started with forex. Futures trading falls in the middle. All are great and profitable markets if you find a strategy that allows you to replicate the stats discussed above. The exact figures dont matterfor example a $0.12 stop loss and a $0.18 target. With a 50% win rate, an average 1.5: reward to risk ratio and 5 trades per day the above results can be replicated. Have a higher win rate and/or higher reward:risk and the results could be better. Have worse stats, and the results will be worse.
Note that you cant perpetually compound your account at these returns. Most day traders trade with a set amount of capital and withdraw all profits over and above that amount each month. To understand why, please read Why Day Traders Make Great Returns But Arent Millionaires. It contains important information about managing expectations and building wealth.
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How To Start Day Trading Bitcoin And Other Cryptos
A trader must know all the ins and outs of the market and bitcoin or any other cryptocurrency to become a successful day trader. Usually, the idea is to purchase a cryptocurrency whose price is likely to rise over the next few hours and then sell it to earn profit. Although this might seem easy to beginners, cryptocurrency trading is demanding and risky. It takes massive discipline, knowledge, and dependable cryptocurrency day trading strategies to succeed.
To get started, you need to open an account in a suitable bitcoin trading exchange that meets your day trading needs. Notably, the crypto market is incredibly fragmented, and exchanges operate under multiple jurisdictions scattered worldwide. Having that in mind, you need to select a crypto exchange platform that is supported in your country.
After choosing a reliable crypto exchange, the next step is to deposit an initial investment capital and kick off your day trading journey. However, it would be best if you had a reliable day trading strategy to succeed. So, what are the best bitcoin day trading strategies?
Wait For The Money Flow Index To Reach The 100 Level
An MFI reading of 100 shows the presence of the big sharks stepping into the markets. When buying, smart money cant hide their footsteps. They inevitably leave tracks of their activity in the market and we can read that activity through the MFI indicator.
Technical indicators arent always right, so in order to fine-tune our day trading strategy, weve added a few more conditions. Namely, during the current day, we need to skip the first two MFI readings of 100 and study the crypto price reaction.
The price needs to hold up during the first and second 100 MFI reading.
If the price drops after the first two MFI 100 readings, then this suggests that most likely were going to have a down day.
Lets now determine the appropriate place to go buy Bitcoin and what are the technical conditions that need to be satisfied.
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Chart Snapshots Included With Each Trade Signal
Previously, I was simply sending out emails with written instructions whenever there were trading activities to perform. But I felt that just getting the entries, stop loss and take profit NUMBERS might be challenging to follow.
Im a visual learner and like to SEE things with my own eyes. So, I thought that providing the signals in a more visual way would make following the signals even easier and transparent.
Therefore, I am now putting all the trading instructions directly on my charts and taking a snapshot of the chart. This way, subscribers can SEE what is happening on my charts so there is no confusion.
I believe this is going to make following the signals even easier to follow and eliminate any confusion as to what is happening on my accounts compared to what is happening to the accounts of the subscriber.
Here is an example snapshot:
Once a day, I send out an email stating which currency pairs have some kind of activity. There is a link to a snapshot like the one above. The subscriber can see what happened on my account, follow the instructions and perform the action on their account.
Very simple trade instructions once a day means no missed trades or mismanaged trades.
Ups And Downs Of Stock Market Trading
Interestingly, the percentage of adults participating in the stock market was at an all-time high in 2007, at 65%. In 2020, it was 55%.
Predictably, the Financial Crisis of 20072008 and subsequent bank bailouts greatly eroded the public confidence in the centralized financial system.
Fortunately, as shown in the movie The Big Short featuring Christian Bale as Dr. Michael Burry, it was a rather unique event that is not likely to repeat.
What truly broke the ceiling for young people to enter the stock market was the launch of Robinhoods zero-fee trading app. Since then, almost all trading platforms have eliminated trading commissions, with eToro taking the lead with over 20 million users.
After the GameSpot scandal in which Robinhood intercepted retail trading of the stock, apparently on behalf of the Citadel hedge fund, its reputation has been shattered. Nonetheless, Fidelity, eToro, TD Ameritrade, and a wide variety of crypto trading apps are more than happy to pick up the slack.
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Can You Make Money From Day Trading And How Much Do You Need To Start
The simple answer is yes, but it is not an easy process
If you plan to become a day trader, one of the first questions is how much money you need to day trade. There is a general belief that youll need an enormous sum to start. In the past, this may have been the case, but today you can day trade with just a few hundred euros or pounds, depending on your countrys regulations and broker requirements. Before we talk about the exact numbers, lets take a look at how you make money as a day trader.
How Much Money Can You Make Day Trading Cryptocurrency
The goal of any financial investment is to gain profit. If youve been in the traditional stock market, you know that its more than just letting your money sit and wait for it to grow. It needs your commitment and expertise to make things exciting and last longer in the trade. Today, the emergence of cryptocurrency lets you reap more rewards since it is a decentralized system in most locations. The next valuable question is: how much money can you make day trading cryptocurrency?
Truthfully speaking, the answer lies in your strategies. You can consistently make a fortune on a daily basis or consider it a side earning venture and get little through time. Other vital skills as risk management and decision-making on a real-time basis are also crucial in order to see returns from your crypto investments. Day trading cryptocurrency is a tricky process because of the volatile tendencies of the market. This article will teach you how to make a significant living out of your assets beyond the numbers.
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Day Trading For A Living
So you want to work full time from home and have an independent trading lifestyle? If so, you should know that turning part time trading into a profitable job with a liveable salary requires specialist tools and equipment to give you the necessary edge. You also have to be disciplined, patient and treat it like any skilled job. Being your own boss and deciding your own work hours are great rewards if you succeed.
Have A Strategy For Crypto Trading
It isnt easy to separate genuine cryptocurrency recommendations from the scams there are lots of sharks out there waiting to take your money.
In 2020, according to the UK fraud-alert service Action Fraud, reports of crypto investment scams surged by 57% year on year to 5,581, with investors losing a total of £113m.
So when youre confronted with a lot of information about a cryptocurrency, take a step back from the hype.
Try to look critically at the project. How many users does it have? What problem does it solve? Does it have any links with industry? Avoid coins that promise the Earth but havent delivered anything tangible.
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