Starting off with the first-ever cryptocurrency of the world, the domain of bitcoin got registered in the year 2008, and the transaction was made in 2009. To trade cryptos, one has to be quite vigilant and familiar with the different strategies that could help them generate profit. This article explains a few of these strategies to give you a deeper insight into the crypto world.
Strategies to help you trade crypto and earn profit
A very popular investing strategy, day trading, depends on the trading of one and more than one security over the day. Investors who follow the conventional rule of buying and holding securities are more involved with the performance of their company in the long run. However, investors concerned with day trading make the most out of the on-spot profitable opportunities.
Where day traders become successful through several useful tools and resources, they rely on software like bitcoinxapp.com, trading simulator software, etc., to take advantage of momentary price movements, be it of bonds, stocks, or other currencies and commodities. Quite recently, we can see crypto markets gaining visible traction by day traders.
These markets are always open as day trading cryptos don’t ask for a margin account or exclusive brokerage subscription. This, in turn, enables them to engage in trades that last for a short time but are more easily accessible than other stock markets. Now, let’s have a look at the strategies you could put to use.
1. Select a trading platform wisely
The most important step you should follow as a day trader is to decide the platform you’ll trade cryptos on. Traders who are based in the US don’t have many options, so you need to research and use the right platform.
2. What investments have your best interest?
Once you have chosen the set platform, the next step is to choose where you want to invest in. In the crypto markets, volatility plays a major role. Where investors are interested in buying and holding securities, the market condition almost wreaks havoc for them. On the other hand, it creates better opportunities for day traders so they can make a profit easily. Always remember that whenever you want to choose your investment, consider the following three factors:
- Asset Liquidity
- Trading Volume
3. Select the best trading strategy
Fluctuations that occur for a short period of time result in profits that day traders make the most of. Of course, there are some techniques that you have to keep in mind. A successful day trader creates a win-win plan where he puts all his efforts into research and creates a strategy that identifies all his enter/exit positions. The move you make is basically your gain – choose your destination smartly.
Look for the following factors in Crypto Exchanges
Here are the following factors that should be considered:
Where you are based plays a major role in the trading of cryptos. Some parts of the world have strict regulations that you must follow or else you will be banned from the country. One example is China, as the country does not allow its people to access crypto exchanges of any kind. In America, you can never assure certainty on the grounds of cryptocurrency, whereas in the other states, different regulations have been instituted.
For instance, there is a BitLicense that New York asks the exchanges to get in order to deal within the state in their own world of cryptos. New York also only permits licensed companies to provide particular approved coins. Other states may not have such strict regulations, but most of the states regulate their own way, and some are moving towards the implementation.
If you think that your cryptos will be as safe as your money is in the bank, you may be wrong. Cryptocurrencies are not protected by your country’s central institution. Exchanges like Gemini and Coinbase hold balances in Dollars so you can keep them in insured bank accounts like FDIC.
Even though this insurance does not pertain to crypto balances, however, you can keep your cryptocurrency safe through some insurance policies that ensure the safeguard rights of your exchanges, that is, protecting them from any kind of fraud or hacking.
Another most important point to consider is the fees of crypto exchanges. You have to pay high fees if you want exchanges to be made easier for you. Once you start trading cryptos in larger amounts, the high fees will also be worth it because of the insurance and protection you will get.