With yesterdays article focusing on Day Trading and the differences between Swing Trading, Day Trading and Investing, let's talk a bit more broadly about crypto-to-crypto trading, bots and trading strategies many people are using in this space.

Imagine turning $500 into a six-figure retirement fund! Forget the Wolf of Wall Street, this is a valid possibility in the crypto world for anyone with skill, patience and discipline. 2017’s growth in cryptocurrency was nothing short of surreal, and 2019 looks set to be bigger. Day trading cryptocurrency could be an unbelievably profitable venture for those who put in the work and remember the golden rules of trading.

Day trading is very short-term trading, and it can mean holding an asset for just a few seconds, to a couple of hours. The idea is that you sell your asset before the end of the day, hoping to make a small, but quick profit.

Getting Started

The first thing you’re going to have to do before you begin day trading is pick a “home” exchange. This is more important than it sounds. Different exchanges offer different coin pairings, fee structures, minimum trade amounts, and more. Pay close attention to those fee structures. If your trading style is likely to consist of very large volumes with very little profit made on each individual trade, those profits can quickly disappear into fees.

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Once you’ve established a home base, so to speak, go ahead and register accounts on your next top three choices. This gives you the ability to find arbitrage opportunities, or differences in a coin’s price from one exchange to another. More importantly, however, it gives you options in terms of cryptocurrency availability, fees, and liquidity.

Developing your Trading Strategy

Once you’re online and ready to go — you’re still not quite ready to go. There’s quite a bit of research you need to do before you pick a broad trading strategy and dive in.

This involves individual coins, any relevant news, any relevant technical analysis, and more. Most importantly, however, you need to set some ground rules for yourself.

One of the hard-and-fast rules in day trading involves never risking more than 1 percent of your total bankroll, or available investment money, on a single trade.

Crypto Trading Bots

In your research and adventures in day trading, you’re likely to come across both bots and trading algorithms. Some may be free, and some may be part of a service. We advise caution here. While it may be tempting to sit back and let a program do your trading for you – after all, it can work while you’re doing something else — remember that a bot’s trading is only as good as its programming.

Moreover, different bots suit different trading styles, and they can and do make significant mistakes. Bots are something to explore after you’ve been in the market for a while, and they’re never something you can just “set and forget” — they require just as much supervision as doing the job by hand.

Bitcoinexchangeguide.com has a great overview of available bots

Technical Analysis

To become a successful trader, you are going to have to know about Technical Analysis – that is the ability to read and analyse the charts using several methods and techniques. Knowing these will allow you identify trends and make predictions about price action. There are many Sub-Reddits and websites about TA.

Conclusion

Day trading has the potential to generate both large profits and large losses. A conservative trading strategy is highly recommended for everyone, particularly the beginner. Don’t let supposedly lost opportunities cloud your judgment when it comes to taking profits, and don’t forget that day trading isn’t free money.

Guest Writer contributed to this article: Josiah O. Makori