More and more people want to learn how to trade virtual currencies, this is why we are setting up this guide to discover the basics of day trading in cryptocurrencies.
Today, Bitcoin has been joined by various new currencies such as Ethereum, Litecoin but also by thousands of others more or less popular.
You have to differentiate between:
The investment which allows you to make gains over several months or even years by carrying out a few operations per week.
Pure trading that allows you to make profits by buying and reselling cryptocurrency in a short period of time (a few minutes to several hours).
If the first option interests you, we refer you to our guide to investing in cryptocurrencies, otherwise continue reading this article.
If you don't have Bitcoin, first see our guide to buying Bitcoin.
Now let's get to the heart of the matter, it's about understanding and succeeding in day training operations, understand the daily cryptocurrency exchange (sale and purchase at the right time to make a profit)
For this, you will have to use the method used in trading other more traditional stock market assets, namely:
Technical analysis
Technical analysis (TA) allows you to anticipate the increases and decreases of crypto software thanks to indicators to perceive a trend and thus bet at the right time.
However, this is not an exact science. It is imperative to use several different indicators and the information collected alongside to make the right choice.
Technical analysis is considered to be particularly suitable for cryptocurrencies. Indeed, the market is new and owned by a lot of different players (individuals like you). Sales are therefore daily and prices move a lot unlike the more traditional sectors.
With technical analysis, we also speak of a self-fulfilling prophecy. More telling, the TA reveals that the price of Bitcoin will fall. Traders who take it into account will therefore sell their BTC, which will effectively cause a first fall which will lead to that predicted by the analysis.
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