Is Day Trading the Best for Crypto Trading?

When it comes to investing, regardless of what we want to invest in, it is all about the perfect timing, keeping up with the latest news and market changes, and acting accordingly. Of course, sometimes it can be a little too much for one person to keep up that tempo, which is why having a good and proven investment strategy is of vast importance, and it is up to us to choose the best one from many of them.

Namely, what every successful investor will surely mention as the most important attribute is finding a strategy that really works and can increase the profit. Now, finding one on your own takes time, as only by experimenting, testing, and applying several of them can you see which one suits your trading preferences the most and choose the best possible option..

Crypto trading

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Everything mentioned above is even more emphasized in crypto trading, and there are two main reasons for that, so we will mention and explain them further. The first one is about everything about cryptocurrencies still being relatively new, and that is leaving many people still unaware of all the possibilities and what it actually means to be actively participating in the crypto world.

The second one is more about having way too many strategies to choose from, meaning that for some new to all this, it can get a little bit overwhelming, and it can be pretty challenging to make the best decision. Choosing whether to go with Scalping, Range, High-Frequency, or Day trading is not easy, as they all have some benefits and disadvantages, but the last one is perhaps the best one, and in order to better explain why, let’s first take a closer look at what this term actually means.

What it is?

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In the Crypto-markets, day trading is a way of investing in Bitcoin and altcoins that involves buying and selling Bitcoin and altcoin assets within a short period, usually within one day. It is a popular strategy for investors with limited time who don’t want to spend their days watching graphs or trying to predict which direction the market will move next, and they want something much faster instead of that.

However, this strategy should not be taken lightly; it’s a serious business that requires both time and effort. If you want to get involved in day trading Bitcoin or other Cryptocurrencies, here are some essential tips for building a successful strategy.

It Isn’t A Guarantee of Profit

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The first thing to know about this strategy is that you will not necessarily make money, and there is an option of losing it. Of course, this is obvious, but many people assume they can just jump into the markets and quickly start raking in profits without too much effort and simply relying on luck.

That’s an extremely dangerous assumption because it can lead to careless mistakes that become pretty costly in the end and lead to losing more money than planned. Before making any decision, make sure to calculate the risk, plan in advance buy and sell orders, and always set stop losses to protect every investment.

Plan Your Investment Strategy

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One of the biggest mistakes that new day traders make is that they don’t plan their investment strategy before buying or selling cryptocurrencies. Without a plan, we will be executing trades based purely on emotions, which can lead to impulsive decisions that could cost us a lot of money.

Because of that, it is necessary to take time to research different strategies before investing and make a plan that you can follow in the long term. Remember, cryptocurrencies are extremely volatile assets with big price swings from one day to another, and their price can change even in a few hours. The best solution is only to invest money you can afford to lose when the market is experiencing turbulence because it is the only way to avoid many serious problems.

Swing Trading vs Trend Trading

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Day trading Bitcoin can be a very profitable venture, but it’s not for everyone, especially for those who are new to investing in the markets.  They might want to start with a safe strategy that limits their exposure and their risk, and there is no such thing as an absolutely safe strategy.

In this case, you should consider choosing between two main strategies, swing vs trend trading. In both strategies, traders on BitQL open positions for a short period of time, but while trend trading involves buying low and selling high, those who prefer swing do just the opposite.

When you choose to trade with trends, for example, you open a position when you think the prices are already starting to rise. In this case, swing trading can be a good strategy for intra-day crypto trading because it allows you to open and close positions quickly while limiting losses, which is probably the most important thing.

With this strategy, your holding period can last from a couple of hours up to several days, depending on how well the trend is, which is still a short amount of time. You can close your position at any time during this period if the trend reverses, but be very careful because you could end up losing all of your money if you misjudge the situation. It requires a lot of calculating and thinking, and guessing the right moment to close the position can be pretty challenging.

On the other hand, day trading involves executing trades within a single 24 hour period, which means that swing trading is not an option here, and these two cannot be combined. However, it might not be necessary to have access to swings in the crypto markets because trading is a very profitable venture, even when sticking to shorter holding periods. It is one of the best options for most people who are not willing to wait and calculate long, and because of that, many of them are choosing this strategy among all others.

Closing Remarks

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As you can see, day trading Bitcoin and other cryptocurrencies are not as simple as it sounds, and we need to be informed and organized before starting it. It’s a serious business that requires great discipline if you want to achieve success in the markets, and entering into the market unprepared can easily result in losing all the money.

However, it might not be as difficult as some people think, so there is no need to be afraid of it. Even though building a successful strategy is far from an easy thing, with time and effort, you can make it work.

If you want to get started with day trading and be successful, planning your investment strategy is the first step towards success. From there, it’s just a matter of making smart choices and avoiding rookie mistakes, and once someone sees how it all works, nothing can stop them from being successful.