Day trading is one of the most commonly used trading strategies. Day traders are active in most financial markets, such as stocks, forex, commodities, and of course, cryptocurrency markets. But is day trading cryptocurrency a good idea for you? How do day traders make money? Should you start day trading?
Unfortunately, we don’t have a single answer to those questions, but this article will explain what you need to know before you start day trading crypto.
What is day trading?
Day trading is a trading strategy that involves entering and exiting positions on the same trading day. Since the trading happens within the same day, this strategy may also be referred to as intraday trading. The goal of day traders is to use intraday trading strategies to try and profit off of price changes in a financial instrument.
The term "day trader" originates from the stock market, where trading is open only during business days of the week. In this context, day traders never leave positions open overnight since they aim to capitalize on intraday price movements.
How do day traders make money?
Successful day traders will have a deep understanding of the market and a good chunk of experience. Day traders will typically use technical analysis (TA) to create trade ideas.