Do you want to know exactly how to day trade crypto?
Are you curious about the differences in trading crypto and regular stocks and forex?
Is your next goal to understand how to swing trade crypto, but you don’t know from where to start?
I’m here to give you a hand or two, and to help you to stop shopping and start trading!
After all, the clothes and shoes we buy can’t make us rich, right? They can make us poor women with a vast wardrobe but nothing to spend afterwards.
1. Choose whether day trading or swing trading crypto
As we have discussed before in many articles, there is a clear difference between day trading and swing trading.
Whether you choose the first or the latter, it will depend on your goals and personality as a trader.
Day trading is a wonderful option for those willing to take trading seriously as their job. It requires commitment and lots and lots of patience, discipline, and mental toughness. It can be very lucrative, but it is the riskiest option.
Swing trading is for those who can wait for a few days or weeks so that the profit comes. That’s why it also requires patience, but way less discipline to look at the charts every hour of the day. In the crypto world, swing traders use a downsized HODL strategy. We’ll talk about HODL later.
Choose your broker
Choosing a broker is like choosing a hairstyle. You can look it up online, check with people who have the one you’re interested in. When you choose, you commit at some level, but you can change the broker and the hair later if you don’t like the result.
Since this is such an important decision, I have written an entire article with the best trading platform for cryptocurrency, crypto and digital currencies. Check it out!
To choose your crypto broker, always check their commission fees and if they are reputable. Many are the crypto trading platforms and the people who have been hacked – including me!
To check my experience and some tips to keep your crypto investments safe, click here.
Learn about blockchain and currencies
Crypto trading is a million-piece puzzle for most people. If you want to become a successful crypto trader, especially if you’re going to day trade crypto, you’ll need to understand the technology that supports the growth of cryptocurrencies – blockchain.
Also, read and study about the currencies. There are over 1600 coins on the market, and you should always know what the safest coins and the ones that are on the rise are.
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Use Stop Losses
Yes, crypto can be very lucrative, but it can also destroy your brokerage account if not traded with seriousness.
That is why I always recommend the use of stop losses. These are orders you place in the broker, that indicate the automatic selling at a specific price to limit your loss.
Let’s say you have bought and traded £1,000 in bitcoins today, and you know you can only tolerate £10 of loss. Then you’ll set your stop loss order to £90. Whenever the price reaches £90, you’ll automatically sell your bitcoins for £90 with only £10 of loss.
How to day trade crypto
All the tips above can be implemented in both day and swing trading crypto.
If you want to day trade crypto, the first thing you need to know is that you really shouldn’t day trade ONLY crypto. The diversification of a trader’s wallet is what makes her a good trader.
You want to day trade crypto? OK. But also, trade stocks and forex. And never trade money you can’t lose – the crypto market is very volatile, but it is that that makes day trading crypto a potentially high-profit activity.
- Which coins to choose?
Choose coins with high volatility and high liquidity, for example, right now, these are the 10 coins that have the highest market capitalisation.
They are traded in a high volume, and this means they are very liquid, and there are always people wanting to buy them from you. You’ll have more chances of winning if you day trade one of these.
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How to swing trade crypto
Swing trading follows the same principles as day trading – you must buy low and sell high.
The only difference between them is the timeframe – while day trading happens when the trader makes 24-hour moves, swing trading is when the moves happen within 2-6 days or 2-3 weeks’ timeframe.
I said before that swing trading is within HODL, and here I’ll develop this concept a bit.
What is HODL?
HODL is considered a long-term strategy that is an excellent alternative for those too afraid to day trade crypto.
Although swing trading is within HODL, people who use this strategy, typically “hold” their trades for longer than 2-6 days or 2-3 weeks.
HODL is the most known and common type of investment within the crypto world. It is stress-free and requires nothing but patience.
Very similar to investing, HODL is based on the idea that you choose a coin that you see potential in and buy to hold it for months and even years, in the hope that the price goes very high eventually.
Conclusion on How To Day Trade And Swing Trade Crypto
Whether you choose to day trade crypto or to swing trade crypto, follow my number one tip of all – study.
The crypto trading market is tricky for those who don’t understand, and whoever who wants to become a professional should be well-educated.
Trading crypto is virtually the same as trading stocks sometimes. If you learn the basics of stock trading, you are on the right path to understanding how to day trade crypto (or swing trade, if that’s what you’d like.)
Let us know how you day trade crypto in the comment section below, and let’s share our experiences!
See you ladies 😊