Since cryptos go mainstream, a lot of people think that day trading is the way to make money right now. They usually think that the volatility of the market could help them to get a second source of income, by buying low and selling high. The thing is that, most of the time, it's absolutely not the case. Rare are the people that have enough of financial skills to make profit out of day trading. Let's see together, why you shouldn't spend money on day trading as a novice and how you can expect to make profits out of it.
It's a really common mistake that a lot of crypto enthusiasts do... They trade by following their emotions without knowing anything about indicators and chart analysis at all. And even when you know them, your emotions shouldn't be at the party, simply because the human emotion is one of the weakest instruments you can use in the financial world. Remember that Losses and emotions are really good friends.
Of course, volatility can be your best buddy, the bad news is that it can be your worst enemy too. Sometimes you will put a position and all the indicators will tell you that you are on the right way, and suddenly, you lose everything. That's pretty much why I'm not for leverage day trading at all.
It's almost like gambling
Day trading, as a lot of correlation with gambling, simply because nobody can tell you where the market will be tomorrow. Even the best traders are only right 60% of the time. It means that on the paper, as a normal trader, you will lose more than you will win. You should never lose more than 1% of your entire capital on a single trade, and of course you should put your take-profit where you could at least win more than two times the amount you could lose. With that kind of strategy, you could maybe get a bit of profits, but that's not even sure.
If you are new to cryptos and think that day trading could make you rich, you are right! But it can make you become homeless too! I admit that it's a bit rude and cliché, but trading needs years of practice and stress to succeed. A lot of people started with $100 and ended with millions, but you can also see some people who put all their savings and went homeless.
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