Do you want to be a better trader? If you said yes, this blog could be a helpful hand for you.
In today's episode I am going to look specificaly at some of the keys for a day trading.
Use just a small portion of your portfolio
Stake three quarters of your portfolio and having the rest for day trading is much better than having all ready for trades, because you will probably use much smaller amounts to trade with. And I think its wise because controlling your emotions is much harder with higher amounts and for profits you have to be consistent which is easier with no emotions. The amount to trade with is somewhere between 0.5 % to 2 % of your holdings. Then you are not taking a greater risk than is needed. For example if you have 30,000 USD on your trading account and you are using 1 % strategy on each trade, your maximum loss per trade is 300 USD (if you are not using stop losses, than it will be much less). When you are taking a trade you have to be prepared for losing that money.
But there is no need for using 0.5 % you can and probably should start with even smaller amounts. You can always add a bit more.
Have enough time for research and trading
Be prepared that it takes a lot of your time (most likely a greater part of a day than you think of). You have to track the charts and start trading quickly when the opportunity come to you. And not having enough time often could result in ending a trade too soon.
Avoid trading small cryptocurrencies
For a day trading you should use coins with high liquidity, high volatility or high levarage. The bigger coin you choose the lesser risk of price manipulation is there. And most likely will your strategies be more reliable on these type of charts. For example for day trading is much better using bitcoin (BTC) than small altcoins like paribus (PBX) that you never heard of.
And stick to your plans as always, as always!
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