Crypto has turned ordinary people into millionaires. The crypto market cap reached $3 trillion during its all-time high. Cryptocurrency investing is alive and well, and now’s a great time to start.
Day trading crypto lets you capitalize on price fluctuations without the long-term risks. Crypto is a volatile asset, allowing traders to make quick profits.
Want to learn how to day trade cryptocurrency? This article will turn you into a crypto day trading pro. So read on!
Diversify Your Crypto Holdings
Most crypto enthusiasts know about Bitcoin and Ethereum. You can trade these crypto assets, but you should diversify your portfolio.
You can buy STORJ and other crypto assets to diversify your risk. Other crypto assets can pick up the slack if one of your picks falters.
Crypto traders don’t hold onto each crypto asset simultaneously. They won’t touch some cryptos for months while engaging in others daily.
The primary goal of each trade is to close with a profit. No trader achieves a profit with each trade, but you can get out early.
Set a max gain for all of your trades. Some traders exit positions after achieving a 1% return. You can set up this trade so that it happens once a crypto asset trades at your sell price.
You don’t want to get greedy with trading. You can turn a 1% gain into a 5% loss by holding for too long.
Crypto is a volatile asset in a volatile market. As a result, it’s subject to dramatic price swings.
Limit Your Losses
You’ll end up with some losing trades. Some traders will feel anxious about pulling the trigger.
Traders fear the asset will rise the moment they sell. However, holding onto declining crypto can lead to further losses.
Limiting your losses helps you move on from a trade sooner. You also cap your downside.
Setting other parameters can prevent you from revenge trading. Some traders make riskier trades to make up for their losses. While some traders get lucky, everyone’s luck runs out eventually.
This cycle can compound losses over time. Combine this mentality with options trading, and the losses can get devastating.
You win some, and you lose some. While this sounds simple and cliche, it’s an important reminder for everyday traders. Simply move on and don’t rapidly change course because of a loss.
Be Cautious with Leverage
Leverage amplifies your returns. Many traders use leverage to capitalize on price fluctuations and buy more crypto. However, leverage also amplifies your losses and puts you in debt.
Leverage can work for the right person, but it’s not the best approach for everyone. If you use leverage, make small trades, so you risk less money.
How to Day Trade Cryptocurrency and Get Results
Now you know how to day trade cryptocurrency assets. Of course, trading strategies don’t guarantee results, but they move you in the right direction.
You’ll go into crypto assets with a game plan in place. You’ll feel more confident about your decisions and learn from each trade.
Want to learn more about crypto? Continue reading this blog for great resources and insights.