Beginners who are looking to day trade Bitcoin and other cryptocurrencies will eventually become familiar with the ins and outs of the market, as well as several rules they should follow to make a profit.
But why experience mistakes when you can learn beforehand so you can avoid them? Here are 6 easy tips for day trading, rookie style.
Table of Contents
Set a Timeframe
Yes, crypto exchanges operate 24/7 and you can initiate a trade anytime you like even if it’s in the middle of the night, but that shouldn’t mean you shouldn’t do anything else. For this reason it’s important to set hours on when you’ll be focusing solely on checking cryptocurrency prices and making trades to earn a profit.
Bitcoin method is the perfect complement for day trading cryptocurrency. You gain access to an automated software and analytics tools that make day trading easier. Sign up today.
Impose a Hard Limit
Cryptocurrency as an asset is volatile, and therefore has a higher risk compared to others. Rookie traders wouldn’t want to blow all their capital in a few days or weeks, right? So one way to ensure this doesn’t happen is to set a hard limit.
Establishing a limit is simple math. Don’t spend or risk more than 2 percent of your starting capital. If you invested in $100, for example you shouldn’t lose more than $2 in trades in any given day.
Trade Penny Assets
One good way to level up in the trading market quickly is to learn the curve and how the market operates and moves. In these instances you should lose as little as possible, and the perfect asset for that are penny cryptocurrencies.
Penny cryptocurrencies are those that cost very little to purchase. It shouldn’t just be any penny cryptos out there since there are hundreds. Also, don’t go all in no matter how confident you are or how all signs point to ‘yes’.
Save Your Profits
Unless you began with a very small capital you shouldn’t re-circulate your profits- instead, put them in your savings and in an offline wallet.
Cryptocurrencies can only be stored through digital wallets, and there are wallets that let you store them offline. This means they won’t have a chance to be stolen or hacked into.
Familiarize Yourself with Patterns
Assets usually move up and down in what’s called patterns, or movements from time to time. These movements repeat themselves and are great indicators to when you should buy and when you should sell.
A good trader will be able to determine when a cryptocurrency will go up and when it will go down. You shouldn’t just trust in intuition, though- use analytics and research to solidify your position.
Establish a Stop Loss
Rookies can’t expect to succeed or profit all the time. You’ll lose some but hopefully you’ll have gained a lot to offset the loss. In this case, it’s best to set a stop loss, or a limit to how much value your invested crypto loses before you sell them all.