People are always on the lookout for ways to make extra money or even quit their jobs to something that they enjoy more. And cryptocurrency has enabled a lot of people to do just that.
Many like to buy and sell bitcoin at a profit and that works great for them. Others instead, like to do something a bit more exciting with higher rewards along with higher risks.
These people turn to day trading cryptocurrency and love to live on the edge. There are times when cryptocurrencies can be quite volatile and there is always a chance that a lot of money can be lost. Those that do it well do it full time and make a lot of money, however.
If you are interested in learning how to do this yourself, then read on for some tips to get you started.
1 – Get your bitcoin and accounts set up
It seems obvious but you’re going to need to have a digital wallet set up with your bitcoin ready to go. Then, sign up for some exchanges to be able to trade. It’s as easy as using your bank account to transfer money to an exchange account and then buying some bitcoin.
However, if you don’t have a bank account or live in a place where exchanges are not legal or allowed, then you’ll have to try other means. For example, in countries like Bangladesh where exchanges are not allowed then you’ll need to use a Peer Peer system in which you buy coins from others rather than an exchange.
Looking at the bitcoin price in Bangladesh it is apparent that plenty of people are finding ways around the ban.
2 – Have a plan
All too often people invest, trade and even gamble using their emotions and falling into several traps as a result. When you are a day trader you have to have an entry and exit plan at all times and only deviate from it when you have a good reason. Hopes, prayers and gut feelings are not good reasons.
Most crypto day traders use a two hour chart, meaning that they are looking to buy and then dump within two hours. You can certainly go longer than that, but if you do, you are not day trading anymore and the strategies change.
Within that time frame you should be looking at coins with high liquidity. In other words, coins that are easily bought as they can be used easier than others. The highest liquidity coin is of course bitcoin. But, there are other alt coins out there that deserve attention, too.
3 – Have an exit strategy
You have to be able to trade your coins quickly even if you feel that you are making money. Take your profit at below the low of the day and protect it that way. Anything lower than that means that there is a change in the market and you may see some losses if you wait.
*This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.