The prevalent high volatility of the crypto market is now giving a boost to day trading. Here is a list of tips for crypto day trading, certain market rules and taxes. New traders can gain information on strategy, software and trading bots.
Cryptocurrency Trading For Beginners
There are a few basic things that every new trader must get their head around. Understanding and accepting these three things will give you the best chance of succeeding when you step into the crypto trading arena.
- Understanding the market – DO your homework on the available cryptocurrencies. Bitcoin, Ethereum and Litecoin top the list for tradability and ease of use. However, there are also Zcash, Das, Ripple, Monero and several more to keep an eye on.
- Embrace volatility – Cryptocurrencies are famously volatile. The price of Bitcoin, for example, went from $3,000 down to $2,000 and then leapt up to nearly $5,000, all within three months in 2017. Whilst this means risk is high, it also means the potential for profit is great too. It’s always sensible to check the volatility of the exchange you decide to go with.
- Understand blockchain technology – A basic understanding of blockchain technology will take you a long way. The information can help you respond to news, announcements and to predict future price movements.
Choosing the Right Exchange
Selecting the right cryptocurrency platform is one of the most important decisions you’ll make. The exchange will act as a digital wallet for your cryptocurrencies, so don’t dive in without considering the factors mentioned below first.
Some exchanges specialize in crypto trades, others less so. Some exchanges offer only specific products. IQ Option, for example, delivers traditional crypto trading via Forex or CFDs – but also offers cryptocurrency multipliers. These multipliers offer increased leverage and therefore risk and reward. Innovative products like these might be the difference when opening an account cryptocurrency day trading.
The decision of choosing an exchange should not be taken lightly. Read reviews and trial the exchange and software first. Coinbase is widely regarded as one of the most trusted exchanges, but trading cryptocurrency on Bittrex is also a sensible choice. CEX.IO, Coinmama, Kraken, and Bitstamp are some other popular options.
PCEX is a secure crypto-exchange with high liquidity that operates at extremely low transaction fees. In addition, PCEX employs a broker channel for all-round support to crypto-traders. Cryptocurrency investments through PCEX will bring high ROI and is the perfect platform to conduct reliable crypto-trade.
Apps & Software
Reacting a few seconds late to big news events could make the difference between profit and loss. That’s why many brokers now offer user-friendly cryptocurrency mobile apps, ensuring you can stay up to date whether you’re on the train or making your sixth coffee of the day.
Exchanges like Coinbase offer in-depth platforms, such as their Global Digital Asset Exchange (GDAX). It’s always worth setting up a demo account first to make sure the exchange has the technical tools and resources you need.
Always check reviews to make sure the cryptocurrency exchange is secure. If your account is hacked and your digital currency transferred out, they’ll be gone forever. So whilst secure and complex credentials are half the battle, the other half will be fought by the trading software.
Each exchange offers different commission rates and fee structures. As a day trader making a high volume of trades, just a marginal difference in rates can seriously cut into profits. There are three main fees to compare:
- Exchange fees – This is how much you’ll be charged to use their cryptocurrency software. What currency and coins you’re trading can influence the rate.
- Trade fees – This is how much you’ll be charged to trade between currencies on their exchange. A marker fee is the cost of making an offer to sell. A taker fee is the cost of taking an offer from somebody.
- Deposit & Withdrawal fees – This is how much you’ll be charged when you want to deposit and withdraw money from the exchange. You’ll often find it’s cheaper to deposit your funds. Also, keep in mind some exchanges don’t allow credit cards. Using debit/credit will usually come with a 3.99% charge, a bank account will usually incur a 1.5% charge.
A demo account is one of the most useful cryptocurrency trading tutorial you can go on. The demo trading will get you the opportunity to trial your potential brokerage and platform before you buy.
Demo accounts are the perfect place to correct mistakes and develop your craft. You’ll usually be trading with simulated money, so mistakes won’t cost you your hard earned capital. Once you’ve tried your strategy and ironed out any creases, then start executing trades with real money.
A free trading account is an excellent way to gain experience with zero risks. PCEX offers you a safe and fast trading platform. Register at PCEX to open your own Demo Account.
You can also find a range of cryptocurrency intraday trading courses online, plus an array of books and ebooks. The more information you absorb the better prepared you’ll be, and the greater chance you’ll have of maintaining an edge over the market.