Day Trading - How I do it

What is day trading?

Day trading is buying and selling an investment in a short period of time to turn a profit. It is not for the light of heart and for most people long term holding will out perform day trading. But we all like to have a little fun once in awhile right? The below information isn't investment advice, it's just an insight to my personal strategy. Never invest more than you are willing to lose and always seek out advice from a professional fiduciary before making any life impacting financial decisions.

Keep your long term investment money and your trading money separate.

I always keep my long term and short term investments separate. My "day trading" portfolio is much smaller than my long term investment portfolio. Although both have risk, short term day trading tends to have more inherent risk. If my day trading account were to run dry I would never "borrow" from my long term investments.

Plan your trades before pulling the trigger.

“By failing to prepare, you are preparing to fail.”
Before placing a trade I will look at the graphs to see market volatility. I also check the current buy and sell orders and get a general feel of the asset first. I then plan a entry point and two exit points - the optimal exit point and the suboptimal exit point. The optimal exit point will determine how much I make on the investment, the sub optimal one being how much I am willing to lose.

Don't overtrade

One of the biggest enemies to day trading are the fees. You could make every correct trading decision and still lose money if you are not mindful of the fees. Become familiar with the commissions trading platforms take and always account it into your profit/loss.

Don't chase green

This is the reason why the average investor loses money. They break the number one rule and buy high and sell low. It's human nature to follow the pack and buy when everyone else is buying, and sell when everyone else is selling. You need to break from the pack and think for yourself.

Investments with a lower market cap

If I bought bitcoin today, it is highly unlikely the price will shift more than a few %. When I day trade I look for more volatile currencies with a lower market cap. It's much easier for something with a 1 million dollar market cap to triple in price than it is for something with a 70 million dollar market cap.

Don't get attached to your investments

"You gotta know when to hold'em, know when to fold'em, know when to walk away.. and know when to run."
Once I hit my expected profit I exit. When I hit my max loss I exit. Everything is calculated. I do not get attached to the investment I hold otherwise I will hold it for too long and never make profit.

At the end of the day, it's just gambling

Every investment is a roll of the die. You could do everything correctly and still lose money. Just like a professional poker player, even the best lose some of the time... However, when they consistently play their best they come out ahead in the long term. I try to mimic the same behavior and stick to a set of strict principles.

Thank you all and If you would like more information on cryptocurrencies and how I invest in the crypto space please visit my website cryptoindex.info