Day trading reddit cryptocurrency

Those gains are only exciting if you understand how far they can get you. Of course the numbers above assume you trade days per year. Not many people are willing to forego vacation and weekends to work as a full time crypto trader, even with numbers like that. Not only that but I also let my emotions control my trades. For example, I once purchased Stratis after the price dropped massively.

My assumption was that on such a sharp decrease in price, it had to rebound eventually. The price kept diving. I was constantly tuned into that chart waiting for an opportunity to sell back to Bitcoin. Now I have my strategy that I stick to without letting my emotions interfere. I have a set of coins that I like trading so I only look at those charts.

I have patterns and indicators that I look for on those charts so I can quickly flip through them. Within minutes I can set my orders, set alerts on my desired entry and exit prices, and walk away from the computer. As the market cap of crypto increases, be sure that the IRS is going to find out how to get their slice.

And they will look into the past. I am not a tax advisor. This is a simple overview of what I keep in mind as I trade. My accountant handles my taxes, and I advise you to get an accountant to do the same. Keep in mind that this is US-centric. You need to double check if this is the case in your country.

The taxable event is when you sell your cryptocurrency for fiat. How much tax you pay depends on how long you were holding the cryptocurrency. Buy crypto with fiat - no tax. Sell crypto for fiat - pay ordinary income tax. Buy crypto with crypto - unclear, but does not seem to be a taxable event. This is where things get foggy. Consult your advisor, but as far as I know this is a like-kind exchange which is not taxable but must be reported to the IRS.

The exchange you use will output all of these transactions so you can hand them to your accountant. The IRS has clarified that a crypto to crypto exchange is not a like-kind exchange. The profit made from each transaction is taxed. If you are holding a currency for more than a year it is classified as long term capital gains.

This is another reason why I like keeping my net worth in Bitcoin. At least not right now. Passive income is great. After you make an initial investment, you mostly sit back and watch the money roll in. Most cryptocurrencies are mined. You invest in a very strong computer and the electricity to run it, and you are rewarded with crypto for contributing to the network as a node that confirms blockchain transactions.

This is an alternative to mining that does not require vast amounts of electricity. The idea is that you stake the cryptocurrency that you own over a wifi connection.

That crypto that you stake is used to validate transactions on the blockchain, and you are rewarded more cryptocurrency for putting the currency you own in the pool. In fact, I intend on staking Ethereum when it is possible. Here are some of the questions with my answers. BTC is my base currency right now because I believe in it as a store of value, and I believe that its value will keep increasing against fiat currencies.

I am emotionally invested in the success of Bitcoin and crypto in general. Now I take up to 8 positions in a trading day. I follow the charts. Fundamental analysis could give me a hint on which charts to look at, but at the end of the day my trades are based on technical indicators.

Let me know if you know of someone who does it. Get the course here. Leave a comment below if you have any questions about how I make a living day trading cryptocurrencies! In this course you'll see me make a profitable cryptocurrency trade. I'll explain what trading is all about, show you how to get set up to trade yourself, and then make a live trade.

Check out this presentation I gave on why I trade. My first month as a cryptocurrency trader At this point I still owned Ethereum and the price was still swinging back and forth. The goal is to get more BTC. There are three reasons for this: Many exchanges are cryptocurrency-only.

I believe in Bitcoin as a store of value. I am faced with that decision every day now. In fact, if i see a chart like this I almost always ignore it: There are two reasons.

It makes a whole lot more sense if you are only working 90 minutes per day. At this point I am actively trading for only 1 to 2 hours every day. Crypto that you hold for more than a year If you are holding a currency for more than a year it is classified as long term capital gains.

Cryptocurrencies offer at least two routes for passive income. Mining Most cryptocurrencies are mined. Proof of stake This is an alternative to mining that does not require vast amounts of electricity. Proof of stake is not widely used yet, but it is going to be introduced into Ethereum next year. If you want to trade traditional markets, then there are checks in place to ensure that new investors have the experience necessary to start trading and that they understand the risks of what they are doing.

Similar gambling websites are meant to activate automated systems to stop you losing too much money. Governments regulate these platforms and companies to protect consumers.

There is little in the way to protect consumers in Crypto. Due to its global decentralised nature, with little to no regulation, it is the wild west of investment, and it is easy to lose money.

This morning I received an email which triggered the writing of this post, the bit that concerned me was as follows: The make money fairly quickly is the thing which clearly concerned me and I would steer anyone who wants to do this away from Crypto investment. Right now, the majority of Crypto trading is speculative, and while use cases for the technology are on the increase, it is still speculative.

What this means is, while investing in Crypto can present investors with a great opportunity to make money, not everyone will. I talked about this in my first Vlog where I discussed the importance of being patient when trading Crypto.

By trading Crypto, there is no guarantee you will make money. This is a highly volatile market, which, while sharing the characteristics of the stock market, is decentralised, unregulated, subject to manipulation and highly unstable. The Crypto market has a short history, and while it has made significant gains over the last few years, this is no guarantee of future performance as nobody knows what the fuck will happen! There will be winners and losers and by being a high-risk market there will be big winners and big losers.

If you are in the market or thinking of entering you may lose everything you invest. When stock markets around the world crashed on Monday, October 19, , known as Black Monday , Equally, it can go on a two-year bear run as it did after the crash of So in this crazy, high risk, volatile world of Crypto trading it is super fucking easy to lose money, all your money.

As such, it is important that if you get into this that you only invest what you can afford to lose, and you develop a strategy which gives you an advantage over other traders. It is essential that you understand what making money is too? They are doing this because this is the money they spend in the real world to survive, live and buy their Lamborghinis. So this long intro leads me into explaining the 5 easy ways you can lose money trading Bitcoin and Crypto.

It is only natural that when a market is flying that there are many new investors wanting to be part of it. When prices rally at parabolic rates there is a constant stream of news or dickheads like me posting videos on the beach saying how well I have done. This is how bubbles form, whether it is the Dot Com bubble, housing market bubble or those fucking Dutch Tulips people keep bringing up.

We all want an easy life, we all think that money will do this and when a bubble is forming people jump in. Crypto is not a get rich quick scheme. If too many people think it is, the prices will go up too quick and the bubble will eventually burst. It is a highly speculative market where some people have got rich quick, and some have lost money quick.

It may continue for another week, maybe a month or even a year, but History will tell you that for it to keep going up, then it will need to crash at some point, shake out the weak hands and start another bull run. It just looks like a little blip compared to what is happening now. Look at the same chart now when I zoom into that period. Many claimed that this was the death of Bitcoin and Crypto, and it could have been.

It took nearly two years of bouncing around for it to get back into a bull market. It can because nobody knows what the fuck will happen. The market may be a very different place right now, the Crypto ecosystem may be more advanced, we may have more utility, but we are still in a speculative market.

It can crash at any point. As such, if you get involved, the golden rule is not to invest any more than you can afford to lose. If you have followed this rule then all your investments should be considered long-term, and by long-term, I mean 3—5 years minimum.

Simply because the longest bear run we have experienced is two years. A bear market can hit us at any point and if it does then the longest we have experienced is two years and this is our benchmark. Crypto is not a get rich quick scheme, you might get lucky and hit a bull run, but there is no guarantee. If you treat Crypto as a get rich quick scheme you will likely make poor unplanned decisions, lose money and chase.

Most Crypto traders have considered day trading; many have tried, some with success and some with failure. Firstly I am going to deal with lifestyle. I expect that most people who are reading this already have a job, therefore if you are going to day trade Crypto, then you are either going to do this while at work, hiding in the toilets or under your desk or you are going to be doing this in the evenings and on the weekends.

I did the same day trading tech stocks a few years back when I lost a fuck load of money. If you are doing it in the evenings and weekends, then you are potentially neglecting your family or neglecting your health and life.

Day trading is super fucking hard; you have to be glued to the markets and news, following trends and using technical analysis to make scalps. Even then, a quick change in the market can stop you out on all your investments. If you think you are smart and you can quit your job to do this, then you are taking a huge gamble if you do not have serious reserves. Even if you are lucky enough to have made enough money and do not to need to work you are still entering a super hard market to day trade.

Each stop was executed at a loss. As such, all those losses need winning back. The problem with day trading is that markets can operate irrationally in the short-term, things happen which makes no fucking sense at all and you are battling the human emotions of fear and greed.

The chart below perfectly demonstrates the experience the most day traders will go through at some point.