Can You Trade Bitcoin Daily?
PROMOTED
Bitcoin is not only a medium of exchange and a store of value; one can also trade this digital currency to make a profit. Sign up with a genuine exchange like Bitcode Method to maximize your day trading profits. Ever since this digital money experienced its highest market value in 2017, more people have invested in the asset because of its potential to grow in the future.
However, the question that a lot of people have is if they can buy and sell this digital money on the same day. Many traders purchase this digital currency to sell in the future for a much higher price. On the other hand, it is possible to buy and sell this electronic currency on the same day.
Day trading entails purchasing and selling this electronic money within a single day. With this strategy, all trades must happen within the said 24 hours. Therefore, it pressures traders to complete crypto trades at a profit because the clock is ticking.
What is Day Trading?
Day trading employs technical analysis to be able to buy and sell this virtual asset on the same day. This trading strategy is a form of active trading where traders must keep track of the changes in the market within a single day.
To earn a profit, day traders depend on the volatility of the Bitcoin market. This volatility causes the market prices to constantly move up and down, creating upward and downward trends that may change every hour. Once the traders have identified trends, they use the proven strategy to buy low and sell this digital money high.
Day trading is much riskier than buying and holding for the long term because huge price drops will lead to a loss. Therefore, the market volatility will help day traders earn a profit, but on the other hand, it can also cause a massive loss if traders are not careful.
Practicing day trading requires traders to have the essential knowledge and skills to perfect the trade. Practice and paper trading is necessary before moving on to actual Bitcoin trades. Although challenging, day trading can be advantageous. Here are critical factors to consider when practicing day trading.
Trends
Trends from a single day are usually measurable within just a few hours. Generally, traders will look to buy when a coin is on an upward trend and sell when it has reached a higher value than the price initially bought. The key to looking at trends is to be disciplined enough to know when to deal.
Some traders make the mistake of waiting too long before selling. Upward trends in this digital money market are very tempting. But, if you stay too long before selling, the direction might suddenly experience a slippage, causing the price to drop and your profits to disappear instantly.
Price and Action
Price actions are specific prices at which traders value this digital money during the different hours of the day. Day traders must be aware of this price action, especially the range in which the price moves.
Bitcoin is volatile and the best option to invest in during the day. However, highly volatile Altcoins are not the best option to practice day trading. Day traders usually use technical indicators like Bollinger bands to better monitor price action.
Final Thoughts
Day trading is among the most prominent trading strategies in the Bitcoin market. Thus, it is possible to trade this virtual asset in one day. Day trading is more complicated than buying and holding. However, it can be more rewarding.