Previously only people working in big financial institutes, trading houses, or brokerages could only actively trade.
But with the advent of the internet, the popularity of online platforms increased and now everyone can trade on their own.
Cryptocurrency trading is very lucrative if executed properly. It could be a challenge for the new traders, especially the ones who come without any preparations or strategies.
It is to be remembered that losses and rough patches can happen even to the most seasoned traders. So the question here is whether day trading in crypto is really worth it? Let’s find out.
Advantages of day trading in cryptocurrencies
There are many benefits of day trading in crypto. But remember that you should not come to the market as a naive person who does not know anything that goes behind the trading scenarios.
You should be able to analyze data from different sources and in various forms like inverted hammer candlestick. This will help you understand the gains that the market has the potential of offering to you.
- One of the most unique aspects of crypto trading is that here the market is open round the clock throughout the year. You can take the opportunity of entering a market that never shuts down.
- The crypto market is very volatile and if you want to be a day trader, you can take some advantage of that. Because of this lucrative instrument, you can take this as an opportunity to earn multiple profits.
- Unlike stock market trading, crypto trading is very loosely regulated. This means, here trading does not come with restrictive rules like the stock market. You do need a big account, lots of experience, or be of a certain age to start day trading. Thus, entering into this market to trade becomes very easy.
- In the cryptocurrency market, you will not have to pay any fees to use the information available in the exchange. The data relating to day-trading is easily available and you can see it without any conditions. For example, if you wish to check the order book, 99% of the time you will not even have to sign in to the given application.
- The exchange interface comes with a wide range of built-in technical analysis tools. Using them, you can get a little insight into the performance of cryptocurrencies.
- As mentioned earlier, it is really easy to get into the crypto market. There are abundant new people and less-experienced traders who have come to trade here. So if you have a little bit more knowledge, you will be able to get an edge over them. You will be able to get in and out of positions to react quickly to different situations. This will help you avoid losses.
Like many things in life, day trading, too, comes with some disadvantages. Let’s go through them in detail.
- The market remains open round the clock and can be a disadvantageous factor too. An always-open market will not always have desirable trades. Only a few times throughout the day will you be able to execute some predictable trades. This means you will have to wait for those opportunities, fixing your eyes on the screen throughout the day.
- The crypto market is unregulated and that is what makes it easy for everyone to enter it. However, there are some downsides to this too. In case a problem occurs with a given cryptocurrency like hacking or scamming, there is no higher authority available to help you. Thus, you will have to take this risk when you are into day trading.
- Crypto is highly fluctuating. Its value can go up and down multiple times throughout the day. Thus, if you want your investment to have predictable returns, you should totally avoid investing in cryptos.
- Thousands of cryptocurrencies are available but only a few are made available for trading. Thus, the common public is missing the basket of profit opportunities that are there within this industry.
So, it can be concluded that day trading is profitable but only to those who are ready to invest a lot of time and put huge efforts behind it.
To get profits from here, you should have patience along with the ability to analyze the market in different ways.