This strategy involves the purchase and sale of a security before the day ends. The aim is to make a profit regardless of whether the trade takes seconds or hours. For cryptocurrencies, day trading success relies on several factors.
The first one is volatility. Unlike stocks, digital coins experience sharp swings within 24 hours with some cryptocurrencies being more unstable than others. The way you use this volatility determines your profit. But trades don’t always go as planned. Hence, avoid chasing losses when your prediction is wrong. Moreover, use a simulator to perfect your trading skills beginning with small amounts when you’re ready for the market.
Don’t forget to set targets. In most cases, traders commit below 1% of their bankroll. Therefore, your risk won’t exceed $10 per trade if your account has $1,000. Though the returns may appear minimal, investing small percentages ensures you don’t go broke. Stop-loss orders are also necessary for preventing losses.