Day traders invest based on complex strategies in a timeframe of minutes to hours, but at the end of their day, they’re out of the market, forgoing potential gains to avoid losses.
At first glance, day trading is pretty simple: You buy and sell cryptocurrencies many times over the course of a day, seeking to make a profit on the (usually) small minute-to-minute, hour-to-hour price fluctuations. It is, essentially, the opposite of hodling.
The reality is day trading is very complex because so many things affect the price — too many to factor them all in. So, you need strategies within it, relying on specific indicators, technical analyses, research sources, risk management strategies, and profit and loss tolerance. Which means access to good information and speed is vital. You also need to take fees into account if you’re making a high volume of trades.
Day trading is high-stress, but also comes with a cut-off. Day traders generally set a defined “day” in the 24-hour crypto market, and close out their positions by that time. So while it does come with high risks, wild overnight swings are not among them. While that means missing out on big gains, it also means avoiding big losses.
Author: Cointelegraph By Connor Sephton
This post originally appeared on Cointelegraph.com News