Unless you hve been living under a rock for the past couple of years, you are probably aware of the current cryptocurrency trading trend. The fact is that these cryptocurrencies, altcoins, and exchanges are more than just millennial buzzwords. As you read this, tens of millions of people around the world are cashing in and making money day trading crypto.
So if you’re interested in joining them and starting an exciting crypto day trading journey of your own, you’re in the right place. There’s no reason to be discouraged by technical terms of cryptocurrencies, blockchains, and ROI because we have got you covered. Here is a basic guide on how you can begin crypto trading on a daily or swing basis with no prior experience necessary.
What Is Day Trading?
Unlike long-term investing, day trading is concerned with buying and selling financial instruments (in this case, cryptocurrency) within the same day, taking advantage of small price fluctuations. Because of its short-term nature, it’s essential to keep a close eye on the market positions to make a good profit. ‘Buy low, sell high’ is the general motto of this type of daily trading.
Before you can start trading crypto, you need to get yourself some. Buying cryptocurrency is a fairly simple process. Start by setting up your account with a digital currency exchange platform like https://www.coinbase.com/ which supports the most popular cryptocurrencies currently on the market, such as Bitcoin, Ethereum, and Litecoin. Once you’ve created an account, buying cryptocurrency is easy by connecting your debit/credit card or through a bank transfer. You’ll be able to set the amount in your preferred currency and the platform will show you how much it amounts to in your chosen cryptocurrency. However, it’s better to create your own personal wallet where you can store your crypto rather than on the exchange itself, to keep them secure from potential being hacked and stolen.
The great thing about crypto is that people can use it to pay for a large variety of online purchases and services. This is even more important if you live in a country that doesn't have a common supporting currency. For example, many modern online casinos offer South African players the option to deposit, claim bonuses and play in Bitcoin, rather than the Rand. There are also comparison sites like https://www.casinos.co.za/ that inform you on how to sign up, make safe payments and give legal advice about gambling in SA. Though this is not day trading, it gives an idea of the benefits of using cryptocurrencies.
Diversify Your Cryptocurrency Portfolio
You know the expression ‘don’t put all your eggs in one basket’? This couldn’t be more true when it comes to day trading crypto. In order to keep risk levels low, it’s recommended to distribute your bankroll over different cryptocurrencies rather than just sticking to one.
When selecting a cryptocurrency, consider factors such as market valuation which determine the size of the coins. These can be mainly large-cap, midcap, or small cap and the key to creating a healthy trading portfolio is having different proportions for each. This will of course involve a lot of research and tracking, but it will definitely pay off.
Bitcoin is probably the most ‘common’ cryptocurrency, in the sense that many people are aware of its existence, which makes it their first choice when it comes to crypto day trading. However, other alternative cryptocurrencies like Litecoin, Dogecoin, and Ethereum are also coming into their own. Keep in mind that there are many factors that affect the volatility of cryptocurrencies. The fact that the market is still relatively young and unregulated makes them more attractive than traditional currencies.
Nowadays, most cryptocurrency exchanges accept payments via popular credit and debit cards as well as bank transfers. Some are even accepting less traditional ways to fund your crypto wallets, such as via e-wallets like PayPal or Skrill. If you are looking to learn more about different ways of trading cryptos, check out our in-depth crypto guides right here: https://www.myfrugalbusiness.com/p/crypto-bitcoin-cryptocurrency.html
Crypto Conclusion
Always exercise caution when trading crypto, especially considering its volatile nature. As with any investment, never invest more money into cryptos than you can afford to lose.
