Making money with bitcoin can get better by trading rather than buy and hold it. However, the plain truth is that day trading bitcoin comes along with a lot of risks. To become successful as a day trader, here are a few points to note:
Get to Know About Bitcoin Day Trading
Day trading involves executing trading strategies generated within a day, making a profit from short term market price fluctuations. These price fluctuations are caused by the inefficiencies of the market. A day trader uses technical analysis in combination with fundamentals. He also trades the news as well. Bitcoin provides extra volatility and volume which makes it preferable to the digital asset day trader. Self-discipline and objectivity characterize a successful bitcoin trader as well as the ability to think intuitively which strategy yields maximum profit.
How to Trade Bitcoin
Direct trading through buying and selling via digital asset exchanges
Trading through derivatives such as CFDs which is being offered by most forex brokers. CFD’s shortcomings are exhibited through the shortfall in profit caused by fees to be paid on the trading platform, as well as liquidity concerns.
It is imperative to know the laws governing virtual currencies in your area as well as the tax regulations. Know that you can also use trading bots to maximize time and profits. Trading bots have their restrictions so they have to be managed well by the day trader to realize his profits.
Bitcoin Trading Strategies
With the volume of information peddling about, it is important to stick with that which makes sense. You have volatility and volume as an advantage. Basic knowledge of blockchain technology is needed to be able to trade the news and other information.
Day Trading Strategies
These tips are helpful, easy and sensible:
Trading trends and corrections: keeping an eye on market price evolution is most likely the simplest approach. Choosing to start trading at or after a correction is simply personal. The most important thing is to know where a correction starts and ends. Traders use candlestick patterns and sushi roll reversal patterns for this.
The difference between roll pattern and engulfing pattern is the number of bars, the sushi roll consists of ten bars while the engulfing patterns have two bars.
MFI based technical trading: this involves the application of different technical indicators to analyze charts. The MFI (an acronym for money flow index) makes it easy to spot price fluctuations in the bitcoin market. It, however, needs proper attention like you need to be there at all times. You also need to pick a crypto pair with high volatility and volume. Adjust the time frame settings to 5 minutes and use the indicator. Change the Period to 3 also. Follow MFI examples on appropriate websites.
Bitcoin day trading takes a lot of perseverance, patience, discipline, and self-will. If you possess all this in surplus, you may dive out to day trading and make cool smart money.