Ever kick yourself for not learning more about the stock market? Feeling maudlin about not investing in Apple when it was a penny stock? Turn that frown upside down — there’s still plenty of opportunities out there to make your retirement fund starting today. The best part is that the stock market isn’t even involved.
How, you ask? Cryptocurrency, that’s how! This new speculative market has exploded over the course of 2017 and shows no signs of slowing down over the course of 2018. Day trading on cryptocurrency exchanges offers an amazing array of advantages over stock trading thanks to its easier accessibility, simpler-to-read charts, markets that run around the clock, 7 days a week, and its minuscule commissions and fees.
Because of the great opportunities that crypto exchanges represent, and because of historical performance over 2017 alone, you could begin trading today with just $10 if you wanted to. If you’re patient and you’re disciplined, that $10 worth of crypto assets could soon grow to however much you want.
Want to get in on this? You should. First, let’s settle a few questions…
Is Crypto Day Trading A Good Idea For You?
Let’s be brutally honest here: day trading is one of the fastest ways to make outrageous profits in the crypto markets. The volatility of crypto markets is legendary, and that means the opportunity for massive gains from a single day’s trading are absolutely within the realm of possibility.
By the same token, this same volatility can easily wipe out your entire investment in a matter of seconds. Day trading in any market is always going to be a high risk, high reward scenario, but with crypto exchanges fluctuating so wildly those peaks and troughs are even more steep and pronounced.
You Need To Know The Dangers
And let’s face it, there are some pretty big pitfalls out there. Nearly every day trader ends up losing big when starting out – in fact many of them might end up giving up within their first 12 months. A lack of risk management strategies, poor education and insight, and a dearth of experience can all be to blame when it comes to such failures.
As if that wasn’t enough to be worried about, day trading is highly psychologically addictive, much in the same vein as high-stakes gambling. The excitement of earning a massive payout just for clicking a mouse button at the right time is intoxicating, but addiction absolutely destroys lives and families when it spirals out of control. And that’s in addition to the high-stress life of constantly checking the valuation on your investments in order to make micro-managed decisions on whether you’re going to buy, hold, or sell.
As if this wasn’t already bad enough, the crypto market’s incredibly speculative nature means that everyone and their cat has an opinion on how it’s going to move. The internet being the way that it is, anyone can start spouting off false or misleading information that can have disastrous effects if you rely on that information when it comes to your investment strategies.
Tips To Manage These Myriad Risks
Still undeterred? Well if you’re going to march onward, you better have some risk management strategies in place. The first is universal – don’t ever invest more than you’re willing to lose. Don’t dip into savings accounts or other crucial sources to provide capital for your crypto investments, as you’re sure going to need that money later on if your investments don’t pan out.
You’ve also got to earn the skills and experience needed to day trade effectively. Read everything you can about how trades work, consider signing up for reputable training courses, and even think about enrolling in a mentoring program. Then, practice – either with a demo brokerage account that lets you invest with simulated cryptocurrency to learn the ropes, or a set amount of live capital as a test case. This minimizes or even eliminates the risk of loss while you get important hands-on experience.
Finally, you’ll need to adopt a realistic set of expectations when it comes to your future success. Nobody’s right 100% of the time — nobody. In fact, most traders are wildly successful if they get their trades right 6 times out of 10. You’ll also have to learn to use tactics like stop loss orders to minimize your losses and maximize your gains.
Stepping Up To The Plate
Think you’re ready to start day trading just yet? You might be, but there are still a few things to keep in mind before you get down to the nitty-gritty. You’ve got to keep a bit more in mind to invest safely and successfully, and the first thing to learn is a general idea of how blockchain and cryptocurrency work in the first place.
Nobody is expecting you to learn the complex math behind it all. You don’t need to know how the sausage is made, so to speak, but a little knowledge helps you to evaluate new currencies as they hit the market, which will aid you in spotting duds or focusing on new opportunities. With more than a thousand different currencies trading on exchanges, getting to know the big players — and any interesting up-and-comers — is going to put you at a big advantage.
Take Care Of The Technicalities
Of course, all the research in the world isn’t going to turn you into a good crypto trader if you don’t actually have any crypto to trade. While it’s easy to set yourself up with a brokerage account if you want to day trade stocks, there are some extra technical steps before you can function as a crypto day trader; first and foremost, you’ll need to get yourself established at a currency exchange.
There are, of course, a number of exchanges out there that will let you convert your USD to crypto. Best bet is for you to do so by buying either Ethereum or Bitcoin, as every cryptocurrency out there is paired with either ETH, BTC, or both. You’ll also want a backup digital wallet; while you’re going to have your trading volume on the exchange so you can access it, you could (and should) transfer portions of your profits to your digital wallet to safeguard them for the longer term.
Go Wild – Though You Probably Shouldn’t
At this point, you’re ready to begin day trading. You’ve signed up for an exchange, secured some capital, done your homework when it comes to learning about cryptocurrencies, established some risk management strategies, and you’ve taken a good, hard look at your chances of becoming successful. It’s time to rock and roll!
Well, probably not. You’re going to be in for a wild ride at first, no matter how much training or simulated practice trades you have under your belt before getting started. You’ll need to rely heavily on everything we’ve touched on in order to be an effective and successful day trader. It will take perseverance and dedication — and you still might lose it all. Start small, scale up, but remember: never invest more than you’re willing to lose. Don’t mortgage your house to day trade Bitcoin.