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A Definitive Guide to Make a Living Day Trading Cryptocurrency

Thought Cryptocurrency is still in its infancy stage but the prospects through which it can revolutionize the monetary world seem to be quite vast. With a market cap of near around $278 billion, Bitcoin brags itself to be the most entrenched Cryptocurrency that is followed by Etherum with a market cap of over $74 billion. The list actually is kind of never ending with other accepted alternatives such as MIOTA (13$B), Litecoin ($17B) and Ripple (428b).

Nuts and bolts of buying cryptocurrencies

The prime attraction for trading the liquid coins is volatility that makes cryptocurrencies the ideal alternative for long-term play. There are a lot of exchanges for cryptocurrencies all over the world. You can take the examples of BitStamp and Coinbase that are two accepted well-known US-based exchanges. Making money trading Cryptocurrencies revolves around speculating its price. This is why rather than going for buying real currency via exchange, brokers rendering CFDs and forex have turned out to be an undemanding alternative for beginners.

A brief profile of Day Trading

The entire game of day trading can be summed up as selling high and buying low. In contrast to the most accepted HODL meme that relies on long-term, basis, the “day” aspect of trading elementarily is all about the short-term nature. There are generally two types of trades named as speculators or technical analysts that are associated with outside market influences and internal workings respectively.

Though there are built-in security systems but you can’t dissent from the fact that the decentralized exchanges are extensively anonymous. While getting into day-trading you have to consider your stop-loss limits and limit sell orders. With limit sell order your coin will be automatically sold while it reaches the top of market price. A related concept regarding this is about the crypto trading bots. Bots and algorithms are a common part of day trading that can help you to trade automatically with a touch of manual assistance.

Paying taxes

AQs the market cap of crypto hikes, undoubtedly the IRS will look into how they are going to get their slice and so don’t you dare to evade taxes. The amount of tax completely depends on how long you hold the currency. You can split the entire transaction into three processes. The first one includes buying crypto with crypto, the next one is selling crypto for fiat while paying ordinary income tax and the last one is all about buying crypto with fiat that involves no tax.

But if you decide to hold your crypto for more than a year then it can be termed as long-term gains. If you are willing to sell Altcoin or you can say Bitcoin you would be taxed at a rate of 15%

The Bottom Line:

Technical analysis along with the familiarity of market risks is also inevitable if you want to become a successful trader. Also keep in mind that day trading isn’t for everyone so if the work outweighs the reward then try developing new strategies or get expert assistance.

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