Cryptocurrencies are one of the most speculative assets in the world. The Cryptocurrencies like Bitcoins and Ethereum have gained a lot of value in the past few years. Unlike Fiat currency, cryptocurrencies are digital, and all the cryptocurrencies take place only through electronic wallets. Cryptocurrencies have proved to be a convenient way to send and receive money throughout the world. An international cryptocurrency transaction doesn’t differ much from the domestic one. As there is no regulating body regulating the flow of many popular cryptocurrencies, it becomes easier to make international payments.
All you need to do is to create a Bitcoin wallet and add some money to it and send it to any cryptocurrency address you like. Even after a lot of concerns from the governments, cryptocurrencies continue to grow at a tremendous rate. There are many reasons behind such increasing popularity of cryptocurrencies. One of such reasons is the low transaction cost. If we make payments in cryptocurrency to other cryptocurrencies, then we are likely to incur much lower transaction costs than fiat currencies.
Additionally, cryptocurrency wallets have evolved to be much more secure than they were a few years ago. Now cryptocurrency wallets come with advanced encryption methods that are extremely difficult to hack. Moreover, anyone can easily open a bitcoin wallet and start making transactions with Bitcoins. Apart from that, you will also need to register for a cryptocurrency exchange.
A cryptocurrency exchange is a place where all the cryptocurrencies are purchased and sold. Signing up for a cryptocurrency wallet doesn’t require you any documents. However, signing up for a cryptocurrency exchange might require you to have some basic personal details. Apart from that, some bitcoin wallets like Exodus don’t even require you to register on your platform.
Bitcoin payments can be made from multiple devices like mobile phones, laptops, or desktops. All you need to have is a web browser like chrome to get started with cryptocurrency transactions. Making transactions with cryptocurrencies ensure that your identity is safe since it does not require any of your personal information to sign up or register. Apart from being a very convenient mode of payment in a very regulated world, cryptocurrencies are also a great option for Day trading.
Why should you Day Trade Cryptocurrency?
There are many reasons why investing in cryptocurrency through day trading can be best for you. Day trading cryptocurrency refers to a trading style in which a trader buys and sells cryptocurrencies on the same day or even multiple times a day. This trading style is very helpful to take advantage of different price movements within the same day. Apart from that, it also helps to minimize losses that can occur due to negative changes in the cryptocurrency market. That means a trader can easily sell their cryptocurrency if the value of cryptocurrency is falling.
There are many advantages of day trading cryptocurrency over other forms of trading styles in the Blockchain market. The first and foremost is that day trading is a proven strategy, and traders are already using this trading style for many years in other financial markets. In other financial markets like the forex and stock market, day trading is immensely popular. Another great advantage of day trading cryptocurrency is that it helps to avoid overnight losses.
Both positive and negative news can immensely affect the value of Bitcoins and other cryptocurrencies in the blockchain market. The value of the cryptocurrency is determined by global demand and supply. Hence, there are some chances of losing your money in Bitcoins and other cryptocurrencies if there is negative news on the other side of the world. Day trading can be very helpful to reduce losses that can occur due to overnight changes in the price of cryptocurrencies.
However, Day Trading might not be a good trading style for everyone. Day trading requires a trader to have good fundamental knowledge about the cryptocurrency and the blockchain market itself. If you are buying and selling the cryptocurrency multiple times a day, you must know what its impact will be on the value of the cryptocurrency. Day trading cryptocurrency has a lot of return potential if it is combined with the right strategy. Day trading cryptocurrency can have an even higher return than other forms of investment in the blockchain market.
One of the main reasons for going for the day trading cryptocurrency over other forms of trading style is the volatility of the cryptocurrency markets like Bitcoins and Ethereum. The market of cryptocurrencies like Bitcoins is considered to be highly immature by analysts. That means a lot of newcomer traders in the blockchain market are new investors who know little about cryptocurrency and the blockchain market itself. That makes the blockchain market difficult to predict since new investors can take decisions hastily that can lead to change in the value of cryptocurrencies. On the other hand, day trading enables a trader to buy and sell cryptocurrency on the same day, reducing the chances of such losses.
How to pick cryptocurrencies for day trading?
There are many ways you can pick cryptocurrencies for day trading. Due to the dynamic nature of the cryptocurrency market, a cryptocurrency suitable for day trading today might not be suitable for day trading a few days after.
Here are some of the ways you can choose cryptocurrency for day trading:
Following the news: As discussed earlier, new can have a massive impact on the value of cryptocurrency. The impact of news on cryptocurrency can be both negative and positive. For example, the value of bitcoins has increased tremendously after the news of tesla company invest $1.5 Billion into Bitcoins. People who have stayed updated with news gained better returns than those who don’t.
Following indicators: Indicators can be anything that can be useful to predict the value of cryptocurrency. Market indicators are very helpful for a day trader to make the right decision at the right time. Day traders need to be good at analyzing price movements related to the cryptocurrency markets.
Liquidity: Good liquidity means the ability of a currency to be converted into cash in a short amount of time. High liquidity ensures that you can buy and sell the cryptocurrency whenever you want without impacting the market value of the currency. A high liquid asset like bitcoins also shows the confidence of investors in that cryptocurrency.
Cryptocurrencies are highly speculative assets in the present world. Day trading cryptocurrencies can be one of the best trading styles to generate higher returns. Starting cryptocurrency day trading is very easy. All you need to do is to create an account with a bitcoin exchange and a bitcoin wallet. Some bitcoin exchanges also have a bitcoin wallet built-in. However, good knowledge about cryptocurrency and the blockchain market is important. Starting day trading without having adequate knowledge can result in lower returns or even losses.