How to day trade bitcoin cash
Trading cryptocurrencies like BitcoinLitecoinand Ethereum is a profitable but tough venture. The day trading strategies contained here will help you to trade other digital coins as much as it would help you trade Bitcoin and the other coins discussed here.
To equip yourself for day trading cryptocurrencies, you may consider doing the under listed:. Simply put, technical analysis is the study of price movements. Technical analysts use the information about price action seen on the charts to make predictions on where price is likely to go.
To do this, they use various tools: This chart above displays some of the tools that are used to predict price movements: Such information is invaluable to day trading. Want to learn how to day trade? Learn some technical analysis. The cryptocurrency market is growing at an exponential rate. For most people, Bitcoin represents the best investment vehicle, and rightly so.
Bitcoin has topped the Coinbase charts for a while now. There are other cryptocurrencies too. The key is to select the popular ones because those are the ones with the highest movement in price. The volume of trade in the popular cryptocurrencies is what drives the volatility in prices, which produces day trading opportunities. Successful day trading is not just about how to trade Bitcoin or what the best day trading strategies are. Risk management is a huge part of the equation.
To minimize any damages that may arise in the course of the trade, it is crucial to know the risks involved with day trading of Bitcoin and how it will impact your account capital. Just knowing how to trade Bitcoin is not enough to how to day trade bitcoin cash you from the associated risks.
Public perception influences the value of cryptocurrencies. This makes them highly volatile. For instance, a rise in the value of digital currencies could be linked to some factors such as increased interest in cryptocurrencies, increased enterprise adoption, etc.
Such huge movements can easily decimate an account if the trader has assumed the wrong trade direction without how to day trade bitcoin cash protection of a stop loss. As mentioned above, crypto prices are driven by public sentiment as well as market forces of demand and how to day trade bitcoin cash.
It will help if you follow happenings in the market so that you can plan your next move accordingly. To engage in Bitcoin trading, you need a platform where you can buy the currency.
Your success in day trading depends on the exchange platform you choose. Hence, this is one of the most important day trading strategies you would want to dwell on. You should research any exchange platform before you settle for it. You want to know what a platform offers to determine whether it is what you want. Some trading platforms offer limited cryptocurrencies. If you want to trade a broad range of coins, you should research what any platform allows you to trade before you go for it.
Coinbase is a platform you may want to consider. It is the most popular exchange and allows you to buy and sell cryptocurrencies like Bitcoin, Litecoin, and Ethereum. Coinbase also serves as a digital wallet for cryptocurrencies. If you want to track prices on the go, you can use their mobile platform for Android and iOS devices. Coinbase offers two platforms that cater to distinct trading needs. Coinbase allows you to buy and sell cryptocurrency or transfer them to anyone, while How to day trade bitcoin cash Digital Asset Exchange GDAX is designed to cater to more advanced trading.
Other exchanges you may want to consider are PoloniexKrakenShapeShift, etc. After creating your brokerage account, the next step is to fund it to enable you to carry out bitcoin trading.
After that, you can proceed to fund how to day trade bitcoin cash account. Whichever exchange you decide to go with, you will have to pay a processing fee.
The amount varies depending on the exchange platform. Now that you have established and funded your account, the next thing you will have to do is trade the markets via your chosen exchange platform. You can choose to buy and sell on an exchange, or trade the CFDs on cryptocurrencies on forex platforms. Digital coins can be bought in fractions, meaning you do how to day trade bitcoin cash need to buy currencies in full units. However, you will be charged for transferring money, regardless of whether you are transferring the money to the exchange or outside of the exchange.
Note also, that transfers involving bank accounts take between four to five days to complete, depending on the platform you are using.
If you are a beginner, use a beginner-friendly exchange like Coinbase, and later move to GDAX as you grow in experience.
GDAX offers more sophistication and advanced features that you will find useful as you outgrow Coinbase. As with every other business, you want your investment to grow over time. With cryptocurrencies, there is no better how to day trade bitcoin cash to do this than to collect as many tokens as you can. To do this, you will need to be in the right places at the right times. The secret to taking advantage of opportunities is maintaining a well-diversified portfolio.
This is why it is crucial that you determine whether to use a fixed profit or allow profits to run. To successfully execute either strategy, you will need to have an exit strategy. Exits determine risk and profit. So you should be cautious when entering and exit trades. Studying moving averages will enable you to know whether the asset price is overvalued or undervalued. Moving averages assist in smoothing out volatility as well as indicating the direction an asset may be headed.
How to day trade bitcoin cash also need to follow spikes in trade volume more closely, as it may indicate how to day trade bitcoin cash presence of excitement or strong fear sentiments. Use the appropriate order types for any trade you want to perform. Not all situations demand the use of market orders. Sometimes to get good pricing, you may need to use a limit order. A limit order enables you to set a maximum or minimum at which you are willing to trade a digital asset.
These orders help to do away with issues of fluctuating prices when you attempt to enter a trade. Also, patience is essential when it comes to working with limit orders.
Skip to content Tokens Tags technical analysis trading tutorial. To equip yourself for day trading cryptocurrencies, you may consider doing the under listed: Learn Some Technical Analysis Simply put, technical analysis is the study of price movements.
Understand the Risks Involved Successful day trading is not just about how to trade Bitcoin or what the best day trading strategies are. Stay Up-to-date As mentioned above, crypto prices are driven by public sentiment as well as market forces of demand and supply.
Set Up a Brokerage Account To engage in Bitcoin trading, you need a platform where you can buy the currency. Fund Your Brokerage Account After creating your brokerage account, the next step is to fund it to enable you to carry out bitcoin trading. Buy and Sell Cryptocurrency Now that you have established and funded your account, the next thing you will have to do is trade the markets via your chosen exchange platform. Set the Correct Order Types Use the appropriate order types for any trade you want to perform.
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The day I first heard about Bitcoin on Reddit, a friend had also called me to tell me about it. Being 22 years old in New York City is a financial struggle. I sold it all and ditched my plans for a mining rig. My financial situation needed to be stabilized before I could invest in assets based on my philosophical beliefs. Bitcoin stayed in the news over the years. The price went up and down, silk road happened, the legality of it was called into question, exchanges were hacked, and people gained and lost millions of dollars.
Ethereum hit the scene with the promise of using the blockchain for more than just currencies. You could build decentralized apps on top of Ethereum and even new currencies.
I wondered if I could how to day trade bitcoin cash advantage of those swings by buying when the price was low, selling when it was high, and buying back in when the price dipped again.
In the same period I shut down my company, Bitfountainafter running it for 5 years. Bootstrapping my own company gave me an unprecedented amount of freedom. I lived in 4 countries, traveled to many more, and only worked a few hours per day. However, since the company had run its course, I needed a new source of income. I applied for only one job as a software engineer. It was the kind of job people love - high salary, all the Silicon Valley benefits, friendly team, well funded company, challenging engineering problems.
How to day trade bitcoin cash three rounds of interview they decided not to move forward with me. I did want it. But I also feared losing my freedom. Gone would be the days where I could spontaneously book a flight to India with no return date. Going through the interview process made the possibility of losing my freedom real. I went into panic mode searching for a way I could make money on my own.
At this point I still owned Ethereum and the price was still swinging back and forth. I signed up for two exchanges: I needed Poloniex as well because there were many cryptocurrencies being traded there Altcoins - how to day trade bitcoin cash that are not BTC.
Those are the first two exchanges that I used. Now I use others since each exchange has pros and cons. A live crypto exchange is intimidating at first glance. There are charts and numbers changing at the speed of sight. I felt overwhelmed but sat through the confusion to try and make sense of what I was looking at. Soon I could see where to place orders to buy and sell, and the charts started to make sense too. As the month went on I spent hours trading.
I made enough to pay my rent, so the possibility of making a living from this was validated. I wanted to formalize my how to day trade bitcoin cash knowledge so I could do more than buy low and sell high.
There had to be a real strategy to this stuff. I read as many books as I could on trading stocks and foreign exchange markets. I made a lot of mistakes. How to day trade bitcoin cash eventually I found my rhythm and strategies. For myself, and most crypto traders, the goal is to increase the amount of Bitcoin we own.
For example, right now the price of 1 ETH Ethereum is 0. Another thing I need to make clear is the type of trading I do - day trading. All of my profits are converted back into BTC at the end of each trading day.
Again, even though I buy and sell several Altcoins, at the end of the day my net worth is in Bitcoin. There are three reasons for this:. How to day trade bitcoin cash earn more USD when the price of Bitcoin goes up against the dollar. Why was it important to clear this up? Several things were on my mind the first time I had to do this.
What if I sell my BTC now and how to day trade bitcoin cash price shoots up tomorrow? Yes, but your bills will how to day trade bitcoin cash paid. Sell now so you can pay your rent.
You can always hold out for more, but at the same time you are risking a loss. After a few months I got better at trading. I was earning more Bitcoin than I needed to cover my monthly expenses.
At the end of the month I sold only what I needed, and kept the rest of my net worth in Bitcoin. Around this time in my trading career it was getting to the point where I could have bought a Tesla or put a down payment on a house by selling my Bitcoin.
Do you sell your Bitcoin to realize your profit in USD? I can live a nice middle class lifestyle in Los Angeles. Or I can drive a flashy car while I rent a crappy apartment in Los Angeles.
It all comes down to your values. In fact, if i see a chart like this I almost always ignore it:. The wild bull runs are hard to find, hard to time properly, and easy to go in the opposite direction where you lose a lot. Those gains are only exciting if you understand how far they can get you. Of course the numbers above assume you trade days per year.
Not many people are willing to forego vacation and weekends to work as a full time crypto trader, even with numbers like that. Not only that but I also let my emotions control my trades. For example, I once purchased Stratis after the price dropped massively. My assumption was that on such a sharp decrease in price, it had to rebound eventually. The price kept diving. I was constantly tuned into that chart waiting for an opportunity to sell back to Bitcoin.
Now I have my strategy that I stick to without letting my emotions interfere. I have a set of coins that I like trading so I only look at those charts. I have patterns and indicators that I look for on those charts so I can quickly flip through them. Within minutes I can set my orders, set alerts on my desired entry and exit prices, and walk away from the computer. As the market cap of crypto increases, be sure that the IRS is going to find out how to get their slice.
And they will look into the past. I how to day trade bitcoin cash not a tax advisor. This is a simple overview of what I how to day trade bitcoin cash in mind as I trade. My accountant handles my taxes, and I advise you to get an accountant to do the same. Keep in mind that this is US-centric. You need to double check if this is the case in your country. The taxable event is when you sell your cryptocurrency for fiat.
How much tax you pay depends on how long you were holding the cryptocurrency. Buy crypto with fiat - no tax. Sell crypto for fiat - pay ordinary income tax. Buy crypto with crypto - unclear, but does not seem to be a taxable event.
This is where things get foggy. Consult your advisor, but as far as I know this is a like-kind exchange which is not how to day trade bitcoin cash but how to day trade bitcoin cash be reported to the IRS. The exchange you use will output all of these transactions so you can hand them to your accountant. The IRS has clarified that a crypto to crypto exchange is not a like-kind exchange. The profit made from each transaction is taxed. If you are holding a currency for more than a year it is classified as long term capital gains.
This is another reason why I like keeping my net worth in Bitcoin. At least not right now. Passive income is great. After you make an initial investment, you mostly sit back and watch the money roll in. Most cryptocurrencies are mined. You invest in a very strong computer and the electricity to run it, and you are rewarded with crypto for contributing to the network as a node that confirms blockchain transactions.
This is an alternative to mining that does not require vast amounts of electricity. The idea is that you stake the cryptocurrency that you own over a wifi connection. That crypto that you stake is used to validate transactions on the blockchain, and you are rewarded more cryptocurrency for putting the currency you own in the pool.