You’d have to be living under a rock to avoid hearing about cryptocurrencies such as Bitcoin and Ethereum and their value explosion.
Naturally, this makes crypto very interesting for trading – which, incidentally keeps it growing. Digital currencies can also be an appealing choice for beginners. That said, before you dive in head-first, it’s a good idea to make sure you know a few important points about cryptocurrency trading.
Here are five points to get you started in cryptocurrency day trading, even when you’ve never dabbled in it before.
1. Look Beyond Bitcoin
Bitcoin is easily the most recognized cryptocurrency and is also by far the most highly valued at the moment. However, it’s far from the only digital coin available for trading. There are already dozens of cryptos selling for over USD $1 and even more that go for pennies (though the latter are likely not worth your attention quite yet).
While Bitcoin currently comprises around half the entire cryptocurrency marketplace, exclusively focusing on that option is simply holding yourself back. Another major crypto worth your attention includes Etherium (its “Ether” is currently worth around 40 percent of Bitcoin) as well as Litecoin and Ripple, which are notably smaller and more volatile digital currencies.
2. View Crypto Trading as Diversifying
Day trading, whether in cryptocurrencies or anything else for that matter, doesn’t guarantee that you will become an instant millionaire. While such successes aren’t beyond the realm of possibility, there are many factors and challenges that must be taken into account when defining a day traders real salary.
Day traders are far more likely to make anywhere from a healthy supplemental income to a comfortable earning than they are to “hit the big one.” When you’re trading in cryptocurrencies, it’s far more realistic to think of it as a form of diversification than a get rich quick scheme. By maintaining the right mindset, you’ll be able to make far more practical and potentially successful decisions.
3. Learn How to Read Bitcoin News
Understanding how to sort through all the headlines about Bitcoin and other cryptocurrencies can give you a considerable advantage in your trading decisions. This is particularly true when it comes to issues regarding regulation. As cryptocurrencies remain relatively new and they are based on blockchain, many national regulators have yet to decide what they will and will not permit. Moreover, among those that have opted to treat cryptocurrency in one way or another, the rules are continually evolving.
Visit and subscribe to high quality news sources that will allow you to keep up to date with the latest and most relevant cryptocurrency and Bitcoin news. This will help you to efficiently find the info you need before you make your trades.
4. Apply Analysis and Chart Reading the Same Way as for Other Currencies
When you’re monitoring cryptocurrencies, it’s important to apply the exact same analysis and chart reading techniques you would normally use for other traditional forms of currency. These can help you to predict the market so you will be better able to make educated trading decisions.
Just remember that while some patterns can guide you in the right directions, others can “lie” to you. Therefore, while charts and analyses can inform you, you will need to use other cryptocurrency tricks and techniques to guide you as well. Keep in mind that you’re making an educated guess. Even the best charts can’t tell you the guaranteed future.
5. Track Companies Moving to Blockchain or Creating Their Own Cryptocurrency
Since cryptocurrency is such a hot opportunity at the moment and blockchain opens many doors particularly for large corporations (including the insurance industry), many companies are making moves toward blockchain or even creating their own cryptocurrencies.
Keeping an eye on those blockchain ventures and newly launched digital currencies has therefore become a common practice among many successful traders.
If you want to get started day trading cryptocurrency, we recommend checking out this guide from TotalCrypto: Day Trading Cryptocurrency 101 – Ultimate Beginner’s Guide