It all begin with the first time i heard of Day Trading alt coins from a friend and the 5x profit he locked in a short time. I thought to myself this can't be rocket science, i have got a little experience with forex trading myself, let me give it shot.
I was immediately added to a signal group and referred to binance exchange, i got about $250 and threw it in on tokens that was recommended for me with expectation of cashing out x5 or more profit soon. I already have it played in my head how much i'll make and what i will spend it on, instead i lost 70% of my money.
Lessons I Learnt
DYOR(Do Your Own Research)
The most important lesson on top my list is to diligently DYOR. Find out what the current market capital is, bitcoin dominance to altcoins and vice versa, what the team behind a coin you are looking to buy is up to, do they have any significant event that will boost price, follow them on all there social media platform.
Here are a few resources that i use to make my research:
- www.coinmarketcap.com (Provides you informations about a lot of crypto; website & social media details, charts, exchanges listed and more)
- www.coinmarketcal.com (Provides informations about upcoming events allowing you to strategies your entry time)
- www.tradingview.com (Robust chart view)
- www.ccn.com (News)
- bitcoinist.com (News)
Buy The Rumour Sell The News
Know when a piece of information is still a rumour or is now news.
Always Have A Plan
Always have a detailed plan of when your entry price would be, what your exit point how much are you willing to loose if things go south or if you are ever willing to get stuck in this.
Take for example here are screenshots of my strategy to trade 20 times (This process could take even weeks) and a sheet with a formulae to calculate my exit price just above 5% and stop loss of 2%.
Always Set A Stop Loss
As a day trader, when you get stuck in a trade too long it start becoming boring and less motivating. You just want to make between 4% - 10% on a trade and move ahead.
Learn Technical Analysis
Understand how to analyse chart , volume and price movement and also strategically position yourself for a rumour that will push a price up. I use trading view chart and have a template setup. Like i mentioned earlier Always Have A Plan
Above is a TA for EOS, you could see trend lines i marked to track the support and resistance position it has help over time and would possibly hold in future.
My setup includes EMA13(ExponentialMoving Average Of 13 hours candle), EMA34, RSI(Relative Strength Index), MACD (Moving Average Convergence Divergence). You can read more about this topic or follow some great youtube channels to understand TA.
Always Set A Stop Loss
The saying Never Sell At A Loss can be dangerous for a day trading, remember you never can tell how the dip will go. Always set a Stop Loss at a percentage you find comfortable, for me i usually stick to 2% and do more TA to know when to trade that crypto if i still intend to.
Don't Be Tempted To Be Greedy
The market will always rise up to drop down, once you are able to lock some reasonable profit, don't be tempted to stay too long especially when you don't have any idea the reason behind the price increase. There would always be another profit to lock in.
Give It Time
One problem am always facing is when i discovered an undervalued or oversold oppurtunity i just can't help it but buy in immediately even when my TA shows the price would drop more. My advise "Give It Time" especially with tool like tradingview chart you can set multiple alert to get notified.
Track Your Progress
This might be a hard thing to do but its help you know where you at. You can use google sheet or application like blockfolio to help you keep you things together.
Currently the market is bearish and my strategy is to swing trade. If you are an experienced day trader or don’t even believe in Day Trading at all, i would love to hear your opinions.
See you around..