Unlike traditional stock markets, the crypto market is open 24/7 - which means you can trade at certain times.
However, it is not wise to trade at any time. Sleep is important because it allows you to rest and return with a fresh mind.
However, you can set hedges during the day to help reduce losses when you sleep, allowing you to trade at any time.
There is a lot to learn before you make your first trade, and learning the basics should not be taken lightly.
Type of trade
The first thing you need to know before making a trade is what type of trade you will make. The two biggest types of trade you will encounter are spot trading and margin trading.
Spot trade
Spot trading is when you buy or sell assets to make a profit from the coins you want.
For example, if you have four Litecoin but you want to trade until you have five Litecoin, you want to exchange your Litecoin with 'Coin A' and 'Coin B.'
You can invest three of your Litecoin into Coins A and the rest become Coin B. This is to spread your assets. A week later, Coin A may have risen in price by 40% while Coin B has dropped 5%.
You can now sell Coin A and Coin B back to Litecoin. Using this method, you will now have more Litecoin than you started. If you have not reached the target, you can repeat this method to complete.
Margin trading
Margin trading is very different from spot trading because it involves borrowing money from an exchange with attached fees.
Loan money is known as 'utilizing'. For example, BitMEX offers several amounts of leverage from 1x to 100x. Using leverage 100x means you trade with 100 times more than the money that you initially put into assets.
If you make a profit, the original leverage will be returned, leaving you the full advantage. However, be aware that if the market moves against you, you will be liquidated.
This means that every fund in your account will be deleted - in the BitMEX example, you will not owe them leverage, but you will lose your initial deposit.
Excessive calculation
Free trade, or OTC, involves you exchanging fiat (national currency) for cryptocurrency through an intermediary.
Your friend selling half Bitcoin for you is technically an OTC transaction. Similarly, there are many companies that facilitate OTC transactions, for example, LocalBitcoins
Study the structure of the exchanges and the main requirements
Another essential aspect of learning cryptocurrency trading is the study of trade patterns and market climate.
By doing this, you will develop a "sense" of the market - this is important because any trade is done through speculation. There is no concrete answer to the evolution of the market.
For example, you may hear a merchant discuss Bart Simpson's famous motive or falling slice. For newcomers, these terms can be very unpleasant.
Thus, Google's quick search on trading patterns can bring up images with graphics. This chart will have a trend line drawn to show you what the trading model looks like.
When you can match the tread pattern to the current price movement, this indicates that the market will continue the trend shown in the chart of the trading model.
It is also important to learn key terms such as support, resistance and moving averages. These terms are very important for measuring price direction.
The two most common terms you will hear are "short" and "long". In short, if you take it short, you are sure the price will go down, while you continue if you believe the price will go up.
So, this is how you can do day trading.
