Virtual currencies have gone through so many ups and downs which has affected traders positively and negatively. Those that understand the market always take advantage of opportunities they find to make profit within a short time. However, Crypto traders prepare their minds to accept any loss that may come when prices fall quickly. To be safe from this risk of facing a loss, traders prefer to buy and sell a digital currency within a day. This type of trade is safe and is easy to make quick profit within one day.
The process of buying and selling Crypto coins has the same purpose as other items in the real world. Every trading activity is done with the goal of making profit. People buy items like hard currencies, gold, goods, and sell them at a price that is more than what they cost. Generally, buying and selling have either long or short-term goals. A long-term trade is when a trader keeps an item for a long time before selling. While a short-term trade is when a trader keeps an item for some minutes to hours before selling. Therefore, buying and selling activities can be affected by how long a trader holds an item before it is sold.
Day trading is a good example of short-term trade, since it can mean holding an item for few seconds to some hours. The purpose is to sell an item before the day ends with the hope of making profit quickly. In the virtual currency market, this type of trade is used because Cryptocurrencies change in prices fast. This means a trader can make high amount of profit within some seconds or minutes of buying a cryptocurrency if prices rise.
There are methods used by people to study trading activity in the world market today. One of the methods is called speculation, which means to predict the change that will take place in a market by considering certain events. Also, analysis of charts is used to check the way prices move and guess whether it will either rise or fall. These methods are important for digital coins since changes in price are fast within a short time.
Some factors a trader has to consider before choosing a coin for day trading include; volatility, volume, recent news, active team, exchange. In this write-up, these factors will be explained in detail and how some cryptocurrencies for day trading meet these criteria for their use.
Volatility is one of the main factors to consider since it shows how fast items change in price over a given time. The market of virtual currency is known for that since prices rise and fall quickly. It means a cryptouser that wants to make gain in a little time, must choose a cryptoasset with price changes that moves upward. For instance, if a cryptoasset with 5% price volatility was bought at $80. If the value increases in an hour, the coin will be sold at $84. An additional gain of $4 will be gotten for just a period of one hour.
Another factor is volume and popularity of a crpytocoin which depends on the number of buys or sells it has daily. The higher the number of buys or sells, the better its volume. On the opposite, the lower the number, the smaller the volume of the crpytocoin. Recent news and events about a cryptoasset can affect its volume. For example, if a bank in the United States announces that it will use ripple token for international payments. People will buy ripple token because of this news, and that will lead to increase in the demand for ripple.
Other factors like exchange and active team have to be used when choosing a currency. The crpytocoin must be approved by an exchange network that is genuine. This will help reduce the cryptotraders risk of making a loss. Also, the cryptocurrency must have a team that is available at all times to respond to questions from users.
Based on these factors clearly explained above, the best cryptoasset for day trading according to many views is Etherum. It is the second most common and popularly used cryptoasset behind Bitcoin. The Etherum has a high volatility value and that shows it can produce more gain to it users in just a little time. More interesting thing about it is that even when the value falls, the more gains users will make from it. It has importance in making contract agreements for industries and individuals in the world of business. And the increase in contract cases today has led to a high demand for the cryptocurrency on daily basis.
A virtual currency Binance is rising and becoming popular over several cryptocurrencies. It was created from Etherum and today it has risen to become one of the most used crpytocoin. All the crpytoexchanges have listed the coin among the most popular digital currencies. This is why it attracts so much attention in day trading, hence increasing its demand in the crpytomarket.
In addition, there are other virtual coins such as true USD, EOS and Tron. Tron is used in day trading because of the active support team that created it and the quick rise in value. There is so much positive news about the coin which is the reason for its high demand in day trading. EOS and True USD are highly volatile in nature which is the reason for their high demand. True USD is a coin that changes value in a day which makes it a good choice for day trading.
Finally, since day trading is all about making gains in the shortest possible time, a cryptotrader must understand the changes of most commonly used crpytocoins. A good knowledge of the recent news or events about such currencies is needed because it increases opportunity for gains. A cryptotrader should make sure the crpytocoin that is chosen for day trading is popular in most crpytoexchanges in the world of crpytocoins. Day trading can be a ladder for getting rich quick provided there is good information on the cryptomarket.