Intraday Trading In Cryptocurrencies

Intraday trading in cryptocurrencies is considered by many investors to be a high-risk sport. The volatility to which Bitcoin and the rest of digital currencies based on blockchain technology are subject is a double-edged sword. On the one hand, it is a very interesting and exciting market, since it has very fast and abrupt price movements. On the other hand, it is precisely this quality that makes it so dangerous.

 

 
Cryptocurrencies offer the possibility to small investors to enter the world of trading and have all the tools that are usually used in the professional field with a minimum investment of capital. The prospect of earning quick money arouses the interest of many people who start trading without first studying and considering a strategy.

Bitcoin is consolidating itself as a means of long-term savings, as well as a refuge asset against inflation. Therefore, there are many people who simply store the asset and make purchase or sale operations from time to time, either through a periodic purchase or with a sale to take profits after a strong rise. There are even so-called ' holders ', people who buy the asset and have no thought of selling it no matter what.

Intraday trading in cryptocurrencies as an investment strategy

The objective of those who consider this way of operating is to obtain profitability in the short term. To do this, they take advantage of the fluctuations that the price has in a common way on a daily basis. Typically, charts between 1 and 15 minutes are used. It is also possible to use 1-hour charts in case a longer trade is opened but always to be closed (either with profit or loss) on the same day.

Within the intraday strategy itself there are different ways of operating. The most common method is ' scalping '. Which should be used by experienced traders and requires a very good knowledge of the graphics and associated risks. In order to carry out successful intraday cryptocurrency trading, the following tips are worth keeping in mind.

How to day trade cryptocurrencies (and not lose everything trying)

The promise of high returns and little time makes many traders spend the day with their eyes on the chart. The market constantly gives opportunities. This type of trading is known to cause investor anxiety. To avoid it, the main thing is to develop a correct market psychology.

Train your mind before taking risks

Day trading successfully is not easy. It requires a good preparation in technical analysis of cryptocurrencies . Experience plays a fundamental role, since the market has memory and patterns are repeated continuously.

Trading is not a lottery, it is not about betting that the price will go up or down. It is about accompanying the price in its next most probable movement. therefore, it is the market itself that will give us the opportunity to take positions. If we are the ones who insist on looking for an entrance, we will almost certainly be wrong.

Therefore it is necessary to know and understand a strategy. This may be buying the breakouts of certain patterns. Buy or sell at support and resistance following the pivot points or take positions following the entry of certain Japanese candles.

In any case, the risk must be defined. Also, the very strategy of the operation. That is to say, before entering the market it is necessary to have decided what is going to be done in the event that the price makes any movement and above all, specific points of taking profit or assuming specific losses are established .

This does not mean that you cannot modify, for example, a 'stop-loss' once the market has moved in your favor. But keep in mind that intraday trading in cryptocurrencies is not designed to hold a position, but to enter and exit the market many times and get a small percentage of profit from each operation.

Start with a virtual or imaginary capital

In a way, doing intraday trading in cryptocurrencies can be understood as taking a test type exam. The market presents us with a scenario and possible options. Only one of those most likely options is correct. The more we know about the market, the more likely it is that we will make the right decision and the price will move in our favor.

In the same way that before taking an exam we do other tests to test ourselves, in trading before investing real money it is necessary to try to invest with money that does not exist.

For this we can make use of demo accounts that various platforms. These provide us with a virtual capital with which to operate and test our trading abilities and our knowledge of the platform or the tools themselves. When you are learning, it is also advisable to operate directly by writing down the operations with a piece of paper and a pen.

When you have a good percentage of success, it will be when it will be time to invest real money. Patience and practice are the keys to trading this type of markets, especially cryptocurrencies, where volatility is much higher than in traditional markets.

Sleep easy operating intraday trading in cryptocurrencies

As we have commented before, it is the market that defines the opportunities, not ourselves. Therefore, a feeling of fear of missing out on the opportunity is constantly generated.

To avoid it, you have to be setting limits. There will be worse or better days, but cryptocurrencies always provide investment opportunities. There is no need to trade in fear of missing out on a major move or leaving positions open overnight. It operates only a few hours daily. Enjoy the feeling of exiting the market positive after trading for a couple of hours. Don't overexpose yourself and rest from the graphics. Even when following a strategy, the success rate will be greatly influenced by the psychological factor.

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