Can you make money day trading Bitcoin?

There are always risks involved when it comes to any form of investing—risks that could result in you losing your money. So before you even think about crypto day trading, there are some things that you should probably know.

The first thing you need to know is that losses are a part of the experience. Even the most successful traders in the world have experienced losses—it’s impossible to be correct 100% of the time. Sometimes, investments will not go according to plan and the sooner you accept that, the more accustomed to the market you’ll become. Traders may have a tendency to invest in high-risk assets after losses to compensate—this is called “chasing your losses” and may lead to even more losses. This notion is especially true in the case of cryptocurrencies, which leads us to the next thing you should know:

Crypto is very volatile. The volatility of an asset refers to how quickly its value can rise and fall—and when it comes to cryptocurrencies, that rate can be extremely high. Take E-Coin as an example. A few years ago, an obscure cryptocurrency called E-Coin experienced a 4,000% increase in value over a short period of time. In the span of a day, it went back to its original value. Anyone who bought E-Coin before its spike would have made an incredible profit. However, people who bought it at its peak experienced a heartbreaking loss. Examples of price spikes like this are what make volatility a double-edged sword for investors.

Learning a new strategy like this can be difficult, which is why for traders, knowledge is power. Before you start trading, it’s important that you read up and research all you can—it’ll help you minimize all of the risks involved. Aside from researching from all the available resources on the Internet, you can also practice on trading simulators—but don’t get too confident if you conquer those, it’s an entirely different thing when real money is on the line. They may sharpen your trading skills, but day trading will test your mental strength.

Another thing that may help you minimize your losses is to set a goal. Once you’ve done your research and have some basic knowledge of how the markets work, it’s important to set a goal for each of your trades. Let’s say you see something you want to invest in, at what point, both positively and negatively, will you start selling? Setting a goal can protect you from the mental stress that fear and greed usually bring.

With all that has been said, it’s easy to see why this strategy can often be considered as a full-time occupation—it can take up a lot of your time and energy. There are a lot of things you need to consider before you start cryptocurrency day trading—and even when you do start, it may take a while before you are able to consistently trade successfully. It’s a slow process that you’ll need to build up slowly, with each mistake providing you with a new lesson to learn.