It’s no secret that more people are jumping on Bitcoin’s bandwagon. Many are venturing into Bitcoin trading due to its ease, while others see it as a lucrative asset. Since its introduction, this virtual currency has dominated the market. More people prefer it when transacting internationally. Some people have even bought and kept Bitcoins in crypto wallets as a long-term investment.
While other digital currencies keep emerging, Bitcoin dominates them all despite its challenges over the years. For instance, China banned Bitcoin and introduced the digital Yuan. Today, Chinese citizens can access this centralized cryptocurrency via the ethereum code , the only authorized distributor. Nevertheless, even such hurdles have not prevented people from trading and investing in Bitcoin.
Day trading is the easiest and most lucrative way to benefit from the cryptocurrency market. Many beginner traders want to learn to move into a market and exit the same day. That way, they can benefit from the Bitcoin market’s volatility. But what is Bitcoin day trading?
The Basics of Day Trading Bitcoin
Bitcoin day trading is a strategy that entails entering and exiting a market position on the same day. Some people call this strategy intraday trading because the market opens and closes trades on the same day.
The primary goal for day trading Bitcoin is to profit from small market moves. Day trading Bitcoin is particularly profitable due to the high volatility of this digital currency. For reference purposes, it’s rare for a conventional tradable commodity or stock to experience a 10% value increase in a single day. However, such jumps happen more often with Bitcoin.
But like other Bitcoin trading strategies, day trading requires more than guesswork to make a profit. An extensive understanding of the day trading strategy is necessary. Also, knowledge and experience in performing technical and fundamental analyses can help you maximize your earnings.
Many traders depend on technical analysis to generate accurate trade ideas. Using price action, chart patterns, volumes, and other indicators can identify the best entry and exit chances when making trading decisions. Also, they monitor essential news and updates about developers because they can affect this crypto asset’s value, even in the short term.
The Goal of Bitcoin Day Trading
Most people day trade Bitcoin hoping to maximize profits. Bitcoin’s price is highly volatile, presenting an opportunity for knowledgeable traders. With a solid day trading strategy and the ability to analyze the crypto market trends, you can make significant profits day-trading Bitcoin.
Also, day trading Bitcoin provides short-term opportunities for traders. Instead of purchasing and holding Bitcoins or taking a long position, you can profit from the crypto market by day trading this crypto asset.
Bitcoin Day Trading Strategies
As hinted, day trading Bitcoin requires the right strategy to be successful. Day traders can implement any of these trading strategies to boost their profits.
- Scalping: This day trading strategy entails capitalizing on the increasing trading volumes. A trader can exit a trade position within minutes of entering, making small gains.
- Arbitrage: Arbitrate entails purchasing Bitcoins on one crypto exchange and selling them on another to benefit from the price variation across the platforms.
Regardless of the strategy you choose when trading Bitcoin, selecting a reliable platform could boost your profits. Currently, you can find several crypto exchanges with varying features and services. Therefore, investigate several platforms to pick one that makes day trading easier for you. If you’re a beginner, research the factors influencing Bitcoin price and use practical tools to automate the Bitcoin market’s research and trading to make the tasks easier.