Bitcoin day trading is a common money-making strategy among cryptocurrency investors. However, trying out popular techniques on how to day trade Bitcoins without prior training or knowledge increases the risk of loss. This article will look at how to day trade Bitcoin, including its technical and physiological implications. 

Here we go.

The Basics of Day Trading

What Is Day Trading?

Day trading is described as the buying and selling of assets such as cryptocurrencies on a daily basis. A day trader speculates on assets, makes purchases, and concludes sales within a 24-hour timeframe. No trade spills over into the next day. These investors conduct trades on a short-term basis; thus, they may partake in hundreds of transactions per day.

Pros of Day Trading

  • Day trading saves you the expenses that cryptocurrency trading platforms charge overnight.
  • The short-term nature of day trades helps traders sniff out a plethora of opportunities in the volatile crypto space daily.
  • Trading is quick to start and conclude. This spares you the anxiety associated with waiting for future results.
  • Day trading affords you legitimate trading that doesn’t violate a pattern day trader (PDT) regulation. This restriction requires traders to keep at least $25,000 in their accounts, and if their balance is below this level, they will be denied access to trading. 

Cons of Day Trading

  • Day trading can be super costly due to the recurrent transaction fees. This con worsens when you’re trading on a platform with exorbitant charges.
  • Day traders have to take a lot of time perusing the market before profit realization.
  • Profits are typically small in day trading.

What Should You Do to Day Trade Bitcoin More Profitably?

Certain actions have to precede your venture into day trading to earn gains:

  • Blockchain Understanding: The blockchain represents the playing field for all transactions. You’ll be able to enter profitable trades if you gain a good understanding of the blockchain. 
  • Be Attentive: Day trading has both positive and negative sides. It’s essential to notice and attend to both aspects before your move.
  • Work Out Your Investment: The presence of risks means that you either profit or lose with day trading. As such, you should invest amounts that don’t cripple your portfolio if the move backfires.
  • Stay Updated: The cryptocurrency world is interrelated. It’s, therefore, necessary to keep track of other coins. The price of BTC may affect every other coin.
  • Know Politics: Cryptocurrencies relate to the outside world. Therefore, government regulations have a significant influence on what happens in the crypto industry.
  • Find Good Software: The last but most relevant preparational step to day trading is acquiring capable software and mastering its use. Good trading software may day trade profitably even in your absence.

Common Bitcoin Day Trading Techniques

People who day trade Bitcoin adopt different techniques according to their risk tolerance level, the amount they’re willing to invest, and portfolio shape. Here are the most common of these methods!

Scalping

Scalpers are investors who attempt to profit from the little adjustments in an asset’s price movements. Such investors conduct short-term transactions to scalp a meager gain from largely profitable trades, thanks to market inefficiencies such as spreads and liquidity. 

A trader must be consistent and fast to realize profits from scalping. A scalper without a strict exit technique may lose all the profits they’ve accumulated. 

Range Trading

Range trading is a strategy that aims at making profits between two consistent price levels of an asset over a specified period. A range trader studies the market structure to identify stable trends and buys or sells according to their observations.

For instance, these two price levels may be the support and the resistance. Range trading helps earmark both levels as entry and exit points. 

Trading the News

News-based trading takes its cue from Forex and traditional stock trading. This approach aims to make trade decisions in a reactive response to significant events or news that may affect the crypto industry. 

Trading the news is possible in traditional trading because news is typically scheduled; therefore, traders may anticipate price adjustments correctly. However, events or news relating to cryptocurrencies are often more sporadic; thus, anticipation can be more challenging in this regard. It may be highly profitable if correctly timed, however. 

Automated Trading Resources

Automated trading tools simplify day trading. They automatically identify market trends and act according to your set preferences. 

It’s advisable to verify a platform’s reliability before trying it. Obolon9 is a secure automated crypto trading system that has different crypto trading scenarios with alerts. So, you’ll be notified about changes in your set parameters of a trading scenario.

Trading on the Ideal Exchanges

Trading on the appropriate platforms helps improve your profits. Transactions are 100% secure, remarkably quick, and less costly. Such platforms include:

  • Binance: Binance is arguably the world’s largest cryptocurrency exchange. Trading fees are affordable, and security is outstanding. Plus, Binance boasts an impressive liquidity ratio.
  • Kraken: Kraken is a reputable cryptocurrency exchange to maximize day trading profits. Transactions on the platform are relatively affordable and secure.
  • CEX.io: CEX is a reputable platform to trade cryptocurrencies with fiat currencies. The resource charges considerably lower fees and assures maximum security. 

Tips to Avoid the Negative Physiological Part of Day Trading

  • Avoid Greediness: Day trading is basically for small profits. It’d be best if you stuck to the typical gains instead of unrealistic targets.
  • Take Responsibility: You’re responsible for your day trading decisions. Realizing this early helps improve your consistency and speed at decision-making.
  • Accept Risks: Day trading comes with significant risks. Accepting that you may lose your investment helps you move on quickly after losses.
  • Improve Your Discipline: Some distractions may occur while you day trade. It’s best to ignore them and focus on your target. 
  • Adopt a Winning Mindset: Ingrain into your mind that you’re a winner and that losses are simply unavoidable. This will help you continue, even in the face of painful losses.

Conclusion

Beginners to day trading need to master a lot before their debuts. Otherwise, they’d likely lose their starting capital. You must master both the technical and physiological aspects of this strategy to know how to day trade Bitcoins profitably. In addition, you may consider Obolon9, an automated crypto trading system that offers 24/7 market surveillance and notifies users of market changes instantly. Remember that speed and precision are the fundamentals of successful day trading.