Crypto day trading has been rising for years now, and joining this trend isn’t too late yet. However, you can quickly get disappointed if you don’t know how to do this because the crypto market’s volatility is higher than traditional ones like stocks. You can use the following tips so you can avoid burning your money when trading crypto:
1. Use Crypto Trading Bots
The best thing about trading crypto is that they’re round-round-the-clock. This means you can trade them 24/7, increasing your chances of earning more. However, you need to sleep, rest, or work most of the time.
You can still trade even while sleeping if you use crypto trading bots. You can use the pre-defined set of rules in the bots so they can trade on your behalf. Like EXMO bots and others, these bots have automated trading systems, allowing you to buy and sell crypto without monitoring the market throughout the day.
The bots use a password to execute orders and access your account, known as the Application Program Interface (API) Keys. You can employ them to trade without putting your emotions into play or when you’re too busy to create your positions.
2. Choose A Good Crypto Trading Platform
You must also use a trading platform that’s flexible, versatile, and reputable. There are many crypto trading platforms in the market like gate.io, but it’s best to choose the one with an app to use on your mobile phone with KYC and other gadgets when trading. This allows you to trade while on the go.
It’s also best to choose safe platforms by checking reviews about them. You can review many third-party review sites to learn more about the platform’s reputation and existence. Additionally, a platform’s ability to integrate crypto trading bots is also a vital factor to consider. Ensure that a crypto trading bot like Coinrule is safe to use in the trading platform you’ll choose.
3. Trade High Liquidity Coins
The cryptocurrency market is known for its volatility. This makes liquidity a vital factor for all tradable assets. Liquidity refers to the ability of a coin to be easily converted into cash or swapped with other tokens. Because of how volatile cryptocurrency is, traders have to exit their positions, or price swings would affect their trading strategies. Anti-money laundering risks can be formed if you are doing trade in finance. Thus, most experienced and wise traders avoid trading in less liquid coins or crypto assets.
In contrast, one of the greatest mistakes of newbie crypto traders is choosing ‘popular’ coins without knowing if they have high liquidity. That may be because social media influencers or famous personalities have enticed them. That’s why seeking professionals before investing in a coin could help prevent such a loss.
You’ll know that a coin is highly liquid by checking its trading volume. More buys and sells on a coin means it has a higher volume. Add to it the frequency of people buying and selling such a coin. Usability also affects the liquidity of a coin. When people use it as a payment medium, they become more liquid.
4. Master Technical Analysis
While there are many strategies to trade crypto, technical analysis should be the basic one you need to master. This means you need to know how to use chart patterns and mathematical indicators to anticipate how the prices will move next. Most trading platforms allow you to generate technical indicators automatically, but if you don’t know how to read them, you may get lost. However, when done right, you can develop a trading plan to increase your chances of becoming profitable.
5. Find A Crypto Day Trading Style
You also need to know what type of day trader suits your goals, tolerance, and taste. You need to keep at it, refine it, get good at it, and stick with it. Doing this will help you master a style that will make you successful in the long run As a novice, committing mistakes is alright, but it doesn’t mean you should immediately switch to a style without investing effort in learning it. Here are some trading styles you may want to consider:
- Intraday Trading: Since the market never closes in crypto trading, you can take positions that can last over a day. Here, you can use trading bots to automate your positions.
- Range Trading: This style uses consolidation to determine whether you’re trading at the bottom or a coin’s all-time high. This means you don’t have to go after a downtrend or an uptrend because your goal is to trade the range. And this could last for a day or two.
- Scalping: Your goal is to earn regular profits, even if they’re not as much. This style is also done quickly, meaning you cut losses as soon as you take profits. You can make the trade every hour or few minutes of the day.
Conclusion
Day trading in crypto can be more profitable since the market is volatile. While it’s okay to buy low and sell high, you may want to add a day trading style to become a more successful trader. Consider the tips above for a start.
Author’s Bio:
Gerald Kim has been a day trader for eight years. He writes blogs about trading as well as records podcasts to help traders refine their strategies. He goes fishing during his free time.
