Hello Friends, If you want to know about how to trade day trading crypto then you are in right place. In this blog, we will discuss day-trading crypto and its methods.
Day trading Crypto for Beginners.
Do you want to make some quick cash while continuing your regular job or studying and improving your standard of living?
Do you wish to generate easy money from the world’s technological advancements? If yes then you have clicked the right blog.
The world of crypto is full of amazing opportunities for you to grab.
There are countless people out there making a profit from investing in cryptocurrency.
Although investing in the cryptocurrency market might be challenging at first.
There are several ways to make money if you’re willing to learn.
Once you’ve mastered the basics though you may earn millions of dollars with it.
So now that you’ve decided to take on the challenge of making money by investing in this amazing market you should seek out a strategy.
The crypto world offers investors a wide range of earnings possibilities.
However today we’ll look at one of the most lucrative and simple methods to generate money in the crypto sector.
In this blog, we take a sneak peek inside one of the hottest industries the crypto industry specifically day trading.
So take a seat and relax as we show you how to make money with day trading.
What is Day Trading Crypto?
In a nutshell day trading is the process of buying and selling assets such as bitcoin or Ethereum within the same day.
The aim of day trading is to make a profit from the swing in prices that happens within a single day.
If you’re looking to make some quick and easy money then day trading might be the right option for you.
It’s one of the most simple and effective ways to generate income from the cryptocurrency market. There are also risks of losses and you may lose money from time to time.
However, if you win a majority of 51% or more on your day trades. There’s no doubt that you’ll make a profit in the long run.
Register on a crypto-trading exchange platform
So it’s important to register on a crypto exchange platform before you start trading and when it comes to choosing an app don’t worry we’ve got you covered.
If you’re living in the United States the coinbase application is a great option to get started in the crypto exchange market.
But if you’re living anywhere else in the world Binance is probably your best bet.
Both of these platforms offer a great user experience a wide range of coins to trade and plenty of security features to keep your account safe.
So no matter where you are in the world you should be able to find a platform that suits your needs.
Once you’ve registered on an exchange platform the next step is to deposit some funds into your account.
Again this process will vary depending on where you’re located but generally speaking it should be fairly straightforward.
Once you have some funds in your account you’ll be able to start trading.
What is Cryptocurrency Pairing?
So the first thing that we are going to do is talk about cryptocurrency pairing. A cryptocurrency pair allows each of the assets in the pair to be valued without the aid of fiat money.
For example, let us assume that an American traveler is traveling to Spain on June 13, 2022.
The traveler would probably do some research about the euro-to-dollar conversion rate in order to determine how much cash they should bring.
In the past, if two different assets were being traded against each other one of them would have to be valued in fiat currency.
However, with cryptocurrency pairs, both assets can be valued against each other. This is a very important concept because it allows for a more accurate pricing of assets.
It also allows for more complex trading strategies to be used when trading pairs.
Types of Cryptocurrency Pairing
The next thing that we are going to talk about is the different types of cryptocurrency pairs.
The three most common types of cryptocurrency pairs are BTC-USD Ethereum-BTC and LTC.
These are the most popularly traded pairs and account for the majority of the trading that occurs in the market.
1. The BTC-USD pair is the most popular and is also the most liquid. This pair trades against the US dollar and is considered to be very stable.
2. The Ethereum-BTC pair is the second most popular and is also considered to be very stable.
3. The LTC-BTC pair is the least popular and is considered to be more volatile.
How Day Trading Crypto is Traded
Now that we’ve talked about the different types of cryptocurrency pairs the next thing that we need to discuss is how they are traded.
The two most common methods of trading pairs are spot trading and margin trading.
Spot trading is where you agree to buy or sell an asset at the current market price.
Margin trading is where you agree to trade an asset with leverage.
Cryptocurrencies are the wild west of investments the basic idea is to buy low and sell high but it’s not as simple as randomly picking stocks.
You need to have a plan and understand the market if you want to make money day trading cryptocurrencies.
Things to keep in mind when day trading cryptocurrencies
- The market is volatile so you need to be prepared for highs and lows.
- You need to have a solid understanding of the market before you start investing.
- Cryptocurrencies are not regulated like other markets so you need to be aware of the risks.
- You need to have a plan for what you’re going to do with your profits and losses.
- You need to be patient and disciplined if you want to succeed at day trading cryptocurrencies.
People tend to day trade because of the volatility in the cryptocurrency market.
This offers several short-term opportunities for traders and they don’t have to buy and hold on or take long positions.
Just as the name suggests it offers trading over a day’s time period and you can make huge profits in a short amount of time.
However, day trading also comes with its own risks.
The market is highly volatile and prices can swing up or down very quickly.
This means that there is a higher chance of losses especially if you’re not careful.
If you’re thinking of day trading in cryptocurrency then you need to be aware of the risks involved.
Indicators for Trade Decisions
Now we are going to be diving into some of the indicators that day traders use for their trade decisions.
The moving average (MA) is basically a calculation of the average price of an asset over a set period of time.
For example, if we see the bitcoin chart with the 30 M A applied we shall see the average price of the coin over the last 30 candles whether it’s days minutes hours, or any other time frame.
These M A are used as a crypto trading indicator and analysis tool. It assigns a greater weighting to the most recent prices.
An important thing to note here is that day traders look at M A in terms of periods.
Hence if we’re looking at a daily moving average of 30 periods we are actually seeing the average of the last 30 days’ closing prices.
And if we look at the 30 M Aon a 5-minute set chart we will be seeing the average price of the last 35-minute candles.
Consequently, all mays reflect the last close of each candle and not the current price.
The most common moving averages include the 9-day 20-day 50-day and day moving averages.
The 200 an M A is probably the most important of them all if you are looking to invest for a longer period of time.
However shorter period moving averages are much more beneficial for day traders since they are making short short-term moves.
It is a common practice among day traders to combine two to three different indicators for the sake of technical analysis.
So the next indicator we will be looking at is Bollinger bands.
This indicator is basically named after the esteemed technical traitor john Bollinger who himself designed this indicator.
The Bollinger band basically consists of three distinct lines:
- The first line is a simple moving average usually a 20-period moving average.
- The second one consists of an upper band of two standard deviations above the 20-period MA.
- And the final line consists of a lower band two standard deviations below the 20-period MA.
Two Distinct Ways of Bollinger Bands.
1. Bands for Mean Reversion
In this particular method of using the Bollinger band indicator, the traders wait for the price to approach a point towards the lower or upper bands before taking action.
If the price is trading closer to the bands the possibility of the market being oversold in the lower band or overbought in the upper band is higher.
Despite the simplicity of using this indicator it is important to keep in mind that this kind of strategy is not suitable for explosive and trending markets namely bitcoin and other kinds of cryptocurrencies.
The concept of mean reversion is more suited to less volatile markets.
2. Trade Breakouts
The second method of using the Bollinger bands is to trade breakouts. This process is carried out by executing a trade in a direction where the price breaches the band.
Day traders use this strategy and if the price breaches a lower band they enter short. And on the other hand, if the price breaches the top band they enter a long position.
A quick tip is that this strategy is best executed in tandem when the bands are squeezing closer together. Providing the day traders with a good signal of the market getting ready for an explosive move.
These are just a couple of examples of technical indicators you can use in your trading.
You will want to pair three to five of these together as well as some charting techniques to have a higher probability of making a sound decision.
Besides this knowing when to take a profit and when to take a loss is paramount to your survival as a trader.
So these are the introduction, types, and Indicators of day trading crypto.
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