There is a fine difference between an investment and a trade. When we think of investment, typically we imagine some place or asset that can preserve or increase our value. To invest in something usually means the investor sees a long term profit potential. In a trade, usually the trader is looking to take his funds to a market and swap them against another currency in the attempts to later swap currencies again later for a profit. Sometimes a trader can do this in minutes, sometimes it takes hours, days and even weeks. The best traders can take advantage of the smallest price movements.
Day traders often analyze coins over a long period of time in order to find optimal entries and exits on their positions. They will use trend lines and indicators to identify larger trends and plot trades within the market swings. The most precise traders typically will only trade a few different coin pairs. These traders can understand the pairs well as they have only selected a few to study. However, that’s not the route most traders tend to take.
Many traders are sporadic in their coin pair selections. Some can even trade multiple pairs a day and be profitable. These types of traders have fine tuned their technical analysis skills enough to confidently wager on multiple positions. While there are many traders that can be successful in either scenario, there are also traders that will lose out on their investments due to either lack of planning or lack of risk management.
How does the day trader find coins to invest in? Here is a little tip on how to find coins to trade. Take note that this is only an observational tip and the coins mentioned in this example may have changed in price value significantly by the time you read this. Please do not choose to invest in any coins based on this article alone. Instead try to focus and observe the method being described.
One of the simplest ways to find coins to make a quick dollar is to observe the 24 hour value change on your exchange. In this example we will be using Binance. We would go to our market overview to view the statistics. You can choose to view in FIAT or any other number of currencies your exchange allows.
If you wish to long a coin (buy low sell high) you can find some great opportunities in the “Top Losers” category. These are the coins that have had the largest decrease in value over the past 24 hours.
From here you can choose to look at different coins that have lost significant value recently. You would look through these coins to find an opportunity to trade using your technical analysis skills. You would keep looking through them until you found a chart to your liking for a quick trade. Or you could plan out an entry in one of these coins as one or some of them could be likely to have a positive change in value soon.
Here are a few examples of coins from the screenshots above for reference.
If you wanted to look for a short opportunity, you could do the same except opposite. Meaning you would check the top gainers to see what is likely to fall on its face next. The only catch with this is: you either have to be holding the coin that has rallied or you would have to short it on futures, meaning shorting with someone else’s coins using your own funds as leverage.
To find a coin to short sell, simply change the 24 hour filter to “high.” Then you will see coins that have recently increased in value. Filter through these coins and use technical analysis to determine which coin is likely to lose value soon. The coin you think will fall in value soon is the one you would select to short sell.
DISCLAIMER: Futures trading carries a greater risk than regular cryptocurrency trading or investing. Please refer to some of our other educational content regarding futures before you attempt to trade futures.
The first coin pair we see on that list is RLC/USDT. Looking at that coin pair we can see it has recently skyrocketed in price. This means it is possible that there will be a pullback – which is an opportunity for a short sell.
This is just a quick way to filter through potential trading opportunities. This is not the only way to trade nor is it the recommended way. If you are risking your hard earned money, it is advisable to study a cryptocurrency before you invest any amount of money into it. This method is best for those go-getters who just can’t stop trading crypto and are always looking for the next opportunity.
Anyone can make money trading cryptocurrency, and everyone can lose money trading cryptocurrency as well. Consume as much information and data as possible before you attempt to face the markets, for your own pockets sake.
By viewing any material or using the information within this publication you understand that this is general education material and you can not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here. Trading cryptocurrency has potential rewards, but also potential risks. You must be aware of the risks and be willing to accept them in order to invest in the markets. Only trade with funds you can afford to lose. This publication is neither a solicitation nor an offer to buy/sell cryptocurrency or other financial assets. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
Written by Edward Gonzales © Crypto University 2021