Traditionally one used to rely on the trading houses, financial institutions and brokerage firms for trading in stocks. The institutions do trading on the behalf of their customers. But now the scenario is altogether changed. With the evolution of internet facilities, there are numerous online platforms available for trading. Now anyone can do trading online themselves.
Day trading is mostly to make profits through the small price fluctuations within a day. You purchase and sell within 24 hours and make profits. However, when it comes to crypto currencies there are wild fluctuations within a day or minute only. So the small investors might be at risk while day trading crypto currencies if they lack prior knowledge about them. But they can also gain a lot from the market due to these price fluctuations. Day trading in crypto currencies has much to offer if it’s done right. If done with proper strategy and preparation, day-trading is definitely worth it.
Crypto currency market has some of the unique features to offer to its customers. Let’s take a quick glance at the various advantages and disadvantages of day-trading in the crypto market.
Advantages of day-trading crypto
· 24/7 market
The crypto currency trading market is open 24/7 i.e. 24 hours a day and 7 days a week. So one can trade at any time of the day that means plenty of opportunities to explore through.
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· Highly Volatile
The crypto currency market is a volatile market. Prices can fluctuate within hours or minutes. The investors can tap the opportunities to make profit. The Bitcoin market can open at $ 20,000 and not even a couple of hours later the price can crash to $ 10,000. One can notice the major dips and upsurge in price within a day only.
· Unregulated
The stock market operates with a lot of rules and regulations. There are restrictions on who can trade, how many times, which age group one should belong to, what experience you have and much more. As far as the crypto market is concerned there are no such restrictions. One can start trading in crypto currencies regardless of their experience, age or their account size. Until now there are no strict rules and regulations to follow as in the traditional markets.
· Transparent and open data
Crypto currency market doesn’t demand fees from its users. Anyone can access the exchange’s data free of cost. Say if one is involved in day-trading then one can easily access the important data and information they require and that too without any strings attached. One can go through the order books without the need of even signing in. There are also a range of built-in technical analysis tools available for its users.
· Immature market
Crypto currency market is an immature market. It means that it’s easily accessible for traders with less or even no prior knowledge and experience. There are mostly newbies and less experienced traders. So if one has the slightest bit of additional knowledge will have an edge over others. Also one can change their positions easily and quickly and can avoid massive losses.
Disadvantages of day-trading crypto
· 24/7 market
An always open market doesn’t mean that you always have the desirable trades available. There might be fewer parts of the day where you can actually execute profitable trades and your waiting time is longer doing day trading.
· Unregulated
Working in an environment which is unregulated is always risky. What if the exchange closes its doors, shuts down its operations and disappears with everyone’s funds or gets hacked. There’s no one to help you. You can actually end up losing all in one go.
· New cycle
Forecasting is impossible if you have no data available. So you never know where your market is heading.
· Liquidity
Being a tiny market it might be always not possible for you to get the price you want and this is actually not ideal for a day trader.
Conclusion
Out of thousands of crypto currency coins and tokens in the market, only a fraction of them are actually tradable on most of the exchanges. So the mool mantra is that get your basics right and you’re through!