Cryptocurrency trading is reaching new heights, as people continue to shy away from traditional banks. Decentralized banks seem to be the way of the future as we move further towards globalization. There is no worry about what one country is doing compared to the other.
This is why people are looking into how to day trade cryptocurrency. But here’s the kicker, there is no such thing as day trading with cryptocurrency.
Here is everything you need to know about trading crypto and the markets move 24/7.
1. Is Crypto Right for You?
Before you get into day trading crypto, you should ask the question, is trading crypto right for you? Cryptocurrency is not like the ETFs that you hold for years and put your faith in. Crypto is an ever-turning machine that is new and evolving.
Crypto is extremely volatile and can drop double-digit percents, even for those currencies like Bitcoin that have been active for a while. You should judge your risk to reward tolerance before taking the dive into crypto.
2. Crypto Doesn’t Sleep
Crypto also doesn’t have a market time frame. Unlike the stock exchanges and even Forex trading, crypto goes 24/7. This means you’ll be watching the markets every day around the clock.
This also means that you’ll have to stay on top of international news as well as national. Because crypto is decentralized, this means that anyone anywhere can influence the price and news may not reach your local station like you are used to.
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3. Are You Okay With Losing Money?
Just like with any stock investment, you have to be okay with the losses. Because of cryptos’ relatively new nature, only being around since around 2009, it is extremely volatile still.
Just at the beginning of the year around March, Bitcoin was trading in the $3,000 range, and just recently in December, was able to hit $20,000. This means that there are going to be times where you lose money.
4. Be Wary of Trading Fees
If you commit to day trading cryptocurrencies, then be wary of fees that can come from different platforms. Often, this means paying a certain percentage of all gains or losses to the broker.
These fees may be minimal, but when you’re day trading, they can start to add up. Also, keep in mind the taxes that will come at the beginning of the new year when day trading. Short selling falls into a different tax bracket than long term investments.
Day Trade Cryptocurrency: Your New Full-Time Job
Learning how to day trade cryptocurrency can change your life. You can get in on the game that everyone from the average joe trader to million-dollar investors is getting in on. Just be cautious about the moves you may and you could be looking at your next full-time job.
If you enjoyed the article and want to learn more about financing, be sure to check out the rest of our blog. If you know someone that is interested in getting into the day trading scene, be sure to share this article with them.