Do’s and Don’ts of Crypto Day Trading

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crypto trading

Day trading crypto is considered one of the most lucrative ways to make money from the crypto market. Nowadays, many traders are learning to make day moves and take advantage of the volatility in coin prices to profit massively in the crypto market.

In this guide, I will discuss 10 do and dont’s you should strictly adhere to ensure a successful crypto day trading.

Key Takeaways

1. Trading crypto mainly deals with speculating on its price rather than owning any actual coins.

2. As a crypto day trader, you must stay updated, as reacting just a few seconds late to big news events could be the difference between making massive gains or losses.

3. High volatility and cryptocurrency trading volume are very suitable for short-term trading.

 

What is Crypto Day Trading?

Crypto day trading refers to a strategy that involves entering and exiting a position in the market within a day. It is also known as “intraday trading,” where trades are opened and closed within a single day.

The entire purpose of crypto day trading is to make massive profits from small moves in the market. This method of trading is very profitable since cryptocurrencies can be volatile. And for you to take advantage of such a market, there are certain do’s and 10 Do’s and Don’ts of Crypto Day Trading to guide your trading decisions.

So, below are the 10 do and dont’s you should adhere to in crypto day trading.

 

10 Do’s and Dont’s Of Crypto Day Trading

1. Trade With A Plan

As a crypto day trader, you don’t wake up one morning and start trading your Bitcoin or Ether aggressively with no trading plan at all because when you are trading, plans and results are essential data that help you figure out where you performed well where you did poorly. These data will assist you in honing your crypto trading decisions and minimize trading loss over time.

Different traders have different trading plans that suit their style. So as a crypto day trader, you should know which trading pattern suits you. A well-laid, detailed plan outlining what you will do will reduce trading mistakes.

2. Don’t Let Other Traders Think For You

As a crypto day trader, you have to think for yourself. Don’t let someone on social media with little or no experience talk you out of your idea so easily. Don’t day trade based on every news story; develop your thought process, make your analysis, create the plan, and properly execute it. That’s how you build yourself and get better as a day trader.

3. Own Your Results

As a crypto trader, own your results. Own your profits and losses. If the losses are due to scammers, then the wins can’t result from brilliance. All results you get are pieces of information, and this information is only valuable if you are willing to own them. Good crypto trader accepts responsibility for their actions, whether good or bad.

4. Don’t Trade Your Cryptos To Pay For Something

If your trade follows a defined process or pattern, you can objectively make rational decisions as a day trader. But when you wake up one day and suddenly start trading to pay for something unplanned, it is no longer a process but trading to make a statement. And this is very bad. One of the fastest ways to lose is to start day trading your cryptos to pay for unplanned things. As much as possible, please avoid it.

5. Make Sure To Adjust Your Trading During Adverse Personal Events.

Humans are emotional beings, and sometimes things happen outside the market that might disrupt our thinking patterns, such as the death of a loved one, a breakup with your spouse, or a car accident. Any time you experience a highly emotional situation, you should scale back your trading. You either reduce your trading size or temporarily avoid trading. Instead, watch your thinking in your trading journal to see if you remain on track. If the situation clears off gradually, adjust to your normal trading levels.

6. Never Turn A Day Trade Into An Investment

As a crypto day trader, never try. Your day trade is not an investment because you didn’t follow your plan. After all, when a trade becomes an investment, it will, over time, create internal conflict. Since you know you made a mistake, accept it’s a loss and move on; don’t, as a result, now become emotionally invested in that position. How do you know your trade is becoming an investment? You feel the need to justify holding it and desperately try to find reasons to convince yourself that you were right about the failed trade.

7. Don’t Pick Tops Or Bottoms

Picking tops and bottoms and declaring these publicly creates a need. This need is to be consistent; in this context, your results will suffer because you will have placed yourself in a position whereby you abdicate your decisions to be consistent or risk getting ridiculed by your friends on social media. Don’t be tempted into feeling that you need to be right about the tops and bottoms in the crypto market because it is a very expensive pastime; rather, follow your plans and quietly eat the benefit in the middle of the move.

8. Avoid  Crypto day trading stories

Many traders tend to brag about their wins, which is good, but it can be very dangerous to emulate because you often end up comparing yourself with those partially baked truths. Sometimes you don’t even get to know the full truth behind these stories and claims. Keeping up with other crypto traders can be very tasking. If anything, ignore the stories and stick to your game.

9. Sell When You Can Not When You Have To

As a day trader, you should sell when you can and not when you have to. Just imagine how much you can magnify the liquidity problem in adverse conditions when you trade cryptos like Bitcoin with leverage. So it is important to note that the size of your position in changing market conditions is an important consideration. Always.

10. Keep These Trading Rules To Heart

Borrow these trading rules and make them your own, whether you are an Ether swing trader or Bitcoin day trader. The longer you trade with these rules, the better you will become. They will become a guide for situations that you will repeatedly experience over time.

Conclusion

Crypto day trading offers traders short-term opportunities to make profits. So rather than just buying, holding it taking long positions in the crypto market, you can just day trade and make profits from the market within a short timeframe.

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