Crypto trading is an attractive option to earn on the crypto market. One of the most important tools throughout all crypto platforms is a crypto coin calculator – an instrument allowing people to choose the needed asset (crypto and fiat) and convert them among themselves, having current prices and fees in front of them.
What is day trading cryptocurrency? Day trading refers to the practice of buying and selling cryptos within a single trading day to take advantage of short-term price fluctuations. It involves opening and closing multiple trades throughout the day, with the goal of making profits from the price movements of cryptos. Let’s see how is day trading cryptocurrency different from buying for the long term.
Hodling and Cryptocurrency Day Trading
The choice between day trading and long-term hodling of cryptos is reliant on various factors and individual inclinations. Here are some fundamental points to contemplate:
- Time commitment. Cryptocurrency day trading necessitates consistent and persistent participation in observing market trends and executing numerous trades during the day. It can be a tedious and time-consuming process that demands substantial commitment. In contrast, long-term hodling requires obtaining cryptos and holding them for an extended period without trading them actively.
- Risk tolerance. Day trading is considered comparatively more perilous since it involves making prompt decisions based on short-term price fluctuations. This market is highly unpredictable, and day traders aim to gain profits from price fluctuations. Long-term hodling carries its risks, such as the likelihood of considerable price drops or project failures over time.
- Skill and knowledge. Successful day trading cryptocurrency demands extensive knowledge of tech analysis, chart patterns, market trends, and other indicators. It also requires experience in executing trades and managing risks. In contrast, long-term hodling requires fewer active trading capabilities and focuses more on fundamental analysis, assessing the long-term potential of a project.
- Emotional resilience. Day trading can be emotionally challenging because of the fast pace and frequent market fluctuations. Traders must regulate their emotions, such as fear and greed, to make rational decisions. Long-term hodling can be less stressful in this regard, as it involves a more patient approach and relies on the belief in the long-term value of the chosen crypto.
- Tax implications. Day trading may have distinct tax implications compared to long-term hodling, depending on your jurisdiction. Frequent trades can generate more taxable events, while hodling for an extended period may be subject to different tax regulations, such as capital gains tax.
How to day trade cryptocurrency? Visit the WhiteBIT exchange and register your account, open the calculator, and enter the data: coins you want to buy and sell, amount, etc. The WhiteBIT platform offers over 250 pairs for trading, including popular Bitcoin and less popular NEO cryptocurrency.