Day Trading Cryptocurrency Tips And Strategies For Beginners in 2023
Cryptocurrencies have been around for a while now. The more people got to know them, the more ways of making money out of crypto arises. If you discover a couple of practices or techniques of trading crypto, you can put them all together and form a strategy. Once you have foundations in place, you can expand it as much as you like. Considering that if you’re reading this article, you’re an amateur in this field, we need to give you a couple of guidelines.
The two crypto analyzing processes you need to follow if you’re planning on trading cryptocurrencies and building a working strategy are technical analysis and fundamental analysis. You need to learn the difference between these two if you want to succeed in this market. Once you get around the research, you’ll want to get right into trading. We hope you choose the cryptocurrency day trading, as in this article, we’re going to focus on day trading cryptocurrency tips and strategies for beginners. Let’s get going.
What is Day Trading?
If you haven’t heard about day trading, you are a beginner, and you are in the right place. This is the most known trading strategy when it comes to cryptocurrencies. We should mention that this one is considered an active trading strategy. Not all active traders are day traders, and this is what you need to have in mind. To qualify as a day trader, you need to enter the position and exit it for one day. Those who opt for this type of trading need to follow the market and the prices on a daily basis. The term we use, day trading, originates from the early days of the financial market. Back in the past, markets were opened only a couple of specified hours a day. What this meant is that those who entered the trading market leave it before it closes. They never stuck to their positions overnight.
Fast forward to today, and we have numerous cryptocurrency markets. Unlike those of the past, these are opened all day long, every day, every week, throughout the year. Because of this, day trading is seen as something different when it comes to the crypto markets. Those who day trade with crypto enter and exit their positions within 24 hours. It is because of this norm that they mostly rely on technical analysis. This trading way can reap financial benefits, but it all comes at the price of much stress and taken risks. If you are a beginner in crypto trading, you’ll benefit from reading the rest of our article as we’ll give you some tips that can aid you in the future. It’s also essential to use reliable partners when choosing the trading app, so decide on someone as GoodCrypto if you want to have a head start.
Day Trading Tips
The beginning of the crypto trading venture doesn’t need to result in losses. With the tips we have in store for you, you can avoid failures and enter and stay in the winning lane. Let see what they are.
1. Take Advantage of The News
Cryptocurrencies are not immune to the press. Of course, they are influenced by relevant news., not by yellow pages. When there is a vast story revolving about government involvement with crypto regarding regulations, or when there’s a big hacking event, crypto will fluctuate. Price can skyrocket or dip down depending if we’re talking about the good news or the bad news. This is what a vigilante trader can take advantage of. The best information for day traders if they’re awake at the moment when a massive company, a world’s recognized brand names, announces that they’re incorporating particular crypto if their business. This usually makes the prices go up, and the profit is yours for the taking. Follow the news so that you can react appropriately when a big story comes out. If you notice something before the competition, even better, you can take most of the spoils.
2. Use Technical Analysis
As we already said, you need to dig deep into technical analysis. The history of all crypto trading is crucial once you enter the day trading program. The recorded patterns can repeat in the future, and you need to be aware of them. As you already know, history does repeat itself, and you need to count on this. If you see how the market was in the past, you can predict how it will behave in the future and use this to your advantage. Having this type of razor edge can put you miles ahead of competitors. Imagine knowing how to use small details from the past trades in daily operations – it’s mind-blowing how much profit you could have.
3. Study Metrics
While we put it on the third spot of our tips, this might be the one that matters the most. We’re not Metallica, so we’re not saying that nothing else matters, as it does, but keep this tip close to your heart. The current value of a currency can be determined by using this one metric – we’re talking about the e-wallets. If you have an insight into how many active wallets are there right now and how many are there overall, and add the trading volume into the mix, you can determine the value of a specific cryptocurrency. If you know this, you can easily make money by trading that exact crypto. Be sure to make a precise assessment as this is going to maximize your profits.
4. Trade On Margin
This is another excellent tip that could help you make the most out of your trading days. All you need to do is to watch out for a targeted price shift and then bet on the margin, which in return allows you to borrow money for further trading. If everything pans out the right way, this method brings you to profit without a fault. All that needs to be met are your predictions. If you hit on the spot, money is guaranteed; if you miss, there’s a chance of losing some. Before you try this method, you need to check your exchange on their margin requirements and varying rates. Don’t try this before knowing. Those exchanges that attract their customers with the best margin platforms are Bitfinex and Huobi, so start with them.