Tips for day trading crypto and mistakes to avoid

4 stars based on 47 reviews

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 tips on day trading crypto. 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 tips on day trading crypto for more than just currencies. You could build decentralized apps on top of Ethereum and even new currencies. I wondered if I could take advantage of those swings by buying when the price tips on day trading crypto 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.

After three tips on day trading crypto 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 - cryptocurrerncies 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 trading 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. But 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 Tips on day trading crypto do - tips on day trading crypto trading.

All of my profits are converted back into BTC at the end of each trading day. Again, even though I tips on day trading crypto and sell several Altcoins, at the end of the day my net worth is in Bitcoin.

There are three reasons for this:. I 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 tips on day trading crypto I sell my BTC now and the price shoots up tomorrow?

Yes, but your bills will be 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 tips on day trading crypto 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 tips on day trading crypto 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 tips on day trading crypto 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 tips on day trading crypto on such a sharp decrease in price, it had to rebound eventually. The price kept diving. I was constantly tuned into tips on day trading crypto 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 am not a tax advisor. This is a simple overview of what I keep 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 taxable but must tips on day trading crypto 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 tips on day trading crypto 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.

Energy trading and risk management mack pdf

  • Comentarios sobre opciones binarias

    Bond future option contract size

  • The daily options trader joe's

    Options trading retail investors

Einar aas trading options

  • First trading contracting group

    Coal trading jobs singapore

  • 60 second binary option trading strategy 2018 dodge charger

    Binare option 602 freightliner

  • How to become a oil trader in singapore

    Education on binary options 60s strategy 60 seconds

Forex trading singapore careers

48 comments See binary options trading signals franco

212 handel mit binaren optionen demokonto

I know a lot of new investors in crypto want to try their hand at day trading. However if you just hold a few top coins like Bitcoin, you will probably outperform most day trading efforts. But nevertheless, people want to give it a try so here are some tips to help you get on the right path without making the mistakes I see pretty much everyone making. Bankroll management — This is actually a gamblers term but it applies to day trading just as much. It means managing the amount you are trading on a daily basis.

Now I know right now you are probably saying that is too low, but trust me, successful day traders who actually make a living doing this do NOT trade a huge percentage of their bankroll everyday. If you do that, eventually you will lose it all, and this is the biggest mistake I see people making when trying to day trade.

The only reason you should ever do that is if you have inside information. The reason you do this is because eventually you will go through a losing streak of trades, it will happen. If you are using a large portion of your bankroll, you will be losing leverage as well which you will need to get back your losses. What that means is you need even larger returns just to break even.

So every losing streak needs to have an astonishing winning streak right after just so you can break even. Have a strategy — If you plan on day trading, you need to have a strategy. This goes with every form of investing, but it is absolutely necessary in day trading. You need to have a strategy and that strategy has to fit your style, your budget, and your risk profile.

Do you plan on doing technical analysis or fundamental analysis? Do you plan on following social media and the news for tips? Do you have a list of coins you are going to watch daily so you can become very familiar with their price action and only trade those coins?

Also, a strategy includes your in and out prices. What are you looking to make on each trade? Do not just buy a coin then wait for it to go up. You should have your sell prices already set before you even put a penny in.

Overall, you should have a set of conditions for every trade. As soon as you see a coin or price action that fits your conditions, you simply pull the trigger. This is also one of the bigger mistakes I see day traders make. You are trying to automate the process as much as possible to take out as much of the uncertainty as possible.

Do not keep trading or you will just be chasing gains and you will lose even more. As you become much more experienced, you can push this further. But when starting out and even as an intermediate trader, if you lose 1 or 2 trades, then stop for the day, you are done. The same goes for winning trades. If you have one or two winners, you are done for the day.

Walk away until tomorrow. As you become more experienced you can extend this out. The reason for this is because after a few wins, you become overconfident and you will start making bad trades that push your risk. If you think you are going to double your money everyday, you will lose. You are basically earning a paycheck, putting in hours and making consistent gains everyday. If you look at day trading like this, you will do much better. Day trading is simply a job, you do the job everyday and make a little money everyday, and over time that money adds up.

Learning — You need to be learning everyday about good old fashioned trading. Markets are markets no matter what you trade on them. You need to know everything about market trading fundamentals. I am shocked to read forums like Reddit and Twitter and see the total lack of knowledge when it comes to even the most basic fundamentals of markets, finance, and economic concepts. Even something as simple as total market cap is not fully understood by most people I watch post.

In closing, I hope this info helps clear up some common mistakes I see new traders make. I started a new Twitter here justjamescrypto. Make sure to follow for market and investing ideas as well as notifications when new articles are posted. Related Content by Tag bitcoin crypto day trading ethereum exchanges.