A day trader is one who conducts multiple trades in a day to make a profit. This kind of trader is different from HODLers. A quick example is this, if you (as a day trader) buy a crypto coin, your goal will be to sell that holding before the day runs out for profit. These kinds of trades are usually carried out within hours or minutes.
Day trading is the direct opposite of HODLing, which is characterized by the action of buying and holding a cryptocurrency for an extended period, based on personal information and conviction. In HODLing, a substantial drop has to happen for the initial vested capital to be at risk.
In day trading, exponential profits, as well as losses can be experienced from sharp price activities.
Starting Day Trading
Getting an exchange to trade cryptocurrencies is no challenge. There is a wide array of exchanges for selection, one just has to sign up to use these exchanges. However, before you commit to any exchange, you’re advised to make sure that it meets all these criteria:
The locations their operations span.
Ensure the exchange supports traders from your location.
Find out what their transaction fees are. Some exchanges are known to charge excessive fees.
Find out what the withdrawal fees are as well.
Find an exchange that has a comfortable interface. Check what the charts and other features look like.
Tips on Day Trading Cryptocurrencies
Endeavor to follow trends. Trading with the trend helps you take advantage of the momentum.
Understand the behaviors of your selected crypto coins. Every cryptocurrency has different responses to events and news.
Make trades when volatility is on the high side.
Always set your profit targets and stop losses. This is a very important tip for beginner traders.
Tryout crypto trading bots.
Try to distant your emotions from your trading. Always maintain a cool state of mind.
Never invest money you’re not ready to lose.
Try to maintain a trading strategy and avoid moving from one strategy to another. Discover what strategy serves you best and work with it.
Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.