So you’d like to get into altcoin day trading? It’s not a walk-in arena where newcomers can expect to jump in and start making money from day one. With that said, it is an arena where following some solid steps will minimize losses and optimize gains. In a way, it is nothing but a description of legacy exchanges as well, as any currency trading arena demands a basic understanding before anyone can consistently make money.
Practice calm, park your emotions, and follow these solid tips for altcoin day trading success. It’s dynamic, profitable and loads of fun!
Altcoin Day Trading Tip #1: Use TradingView signals
Both novices and seasoned traders log their trades on charts using TradingView. This is publicly visible data that allows you to look at consistently solid plays worth emulating. You can also encounter public charts from other exchange members and these can play the same role. Successful traders in any arena, legacy or altcoin, come to understand the value of signals. Any altcoin day trader would be hard pressed to find a better comprehensive source of other traders’ data.
Gleaning consensus opinion from others is good, as long as the census sample is big enough. You can also bet traders on TradingView by hovering the mouse over a trader’s name to check following and reputation statistics.
Altcoin Day Trading Tip #2: Steer Clear Of Pump & Dump Signals
Investigate every signal source you want to follow for yourself. Scores of publicly-posted trash signals populate the web every day. Telegram and Discord groups are often littered with bogus signals, and many crypto forums including digital coin sub-Reddit sections are not immune either. People shilling (decoying) a coin can be avoided if signals are corroborated by at least two or three reliable industry sources.
There is a now-established phenomenon on some sub-Reddit groups where a coin is positioned as the current must-have, only for the cycle to be repeated a week or two later, this time publicizing the next rule-the-world altcoin. After a month or two, new day traders become aware of the pattern. As valid as signals can be, is as often it seems there’s someone with a planned holding they are simply trying to sell off at a profit behind the hype.
Altcoin Day Trading Tip #3: There’s Profit In Scalping Smaller Price Moves
With the leveraged trading offered on some exchanges, you can “scalp” (small and quick in-out trading) and make good profits. For example, gaining a 10 percent leverage makes a 1% price movement eminently worthwhile. There’s no benefit without risk, but you can set or stop losses closer to the exchange’s “mark price” and minimize risks.
A scalper needs strong mental fortitude as although wins are frequent, so are losses. If you’re still struggling to accept a single loss in moments, scalping should perhaps be replaced with a longer time frame strategy.
Altcoin Day Trading Tip #4: Trust Technical Analysis, Not People
This is another way of saying: follow the facts, not the personality. Evaluate the history and current technical trader content. As with any field, there are charlatans that manage to perpetuate just enough credibility in their posted analysis to sucker people into pump and dumps. That said, there are also many that consistently give quality advice.
Going back to the TradingView tip, traders can be evaluated, corroborated and tested cautiously for results. Don’t forget to look at a supposedly great trader’s history. Have they really made consistently good moves? Are there glaring holes in their portfolio? Here their following is a valid metric, but DYOH! Do your own homework and, as with any trading, all of the small snippets will add up and grant either doubt or reassurance.
Altcoin Day Trading Tip #5: Incorporate An Understanding Of Market Cap
Altcoin day traders should become frequent CoinMarketCap visitors. It has become a very popular site for regular traders, due largely to its relevant and detailed data. From the social section, the site allows you to find all existing Twitter feeds and sub-Reddit sections for the projects that interest you.
Market capitalization remains a telling metric and a fundamental snapshot of any offer. The more you view altcoins from this perspective, the more you’ll be able to attribute correct value as there is a definite correlation. Indeed, market cap is in itself an educational tool as, once a trader applies their understanding of market cap values to altcoin selection, distinct patterns typically emerge that govern strategy. In the Historical Snapshots section, you’ll find fiat prices and the market cap of coins by the day and the daily trading volume.
Altcoin Day Trading Tip #6: Your investments need protecting
Protect your investments in every way imaginable, never forgetting that corrupted or even negligent navigation can result in financial loss. Be wary of websites and do the homework required before employing any wallet or storage offer. Stay up to date with breaches and technical developments in the cryptosphere, too. A trader needs a current technical understanding in order to be safe online.
Proper stop losses are an essential tool of a successful trader. When the big ball rolls, a stop loss is what prevents it from flattening you. Also, securely stored funds start with an offline cold vault and go downhill from there. Wise modern traders store their funds cold, on their own. This allows them to avoid depending on an exchange’s security protocols.
Altcoin Day Trading Tip #7: Look Out For Trending Fundamentals
This might sound like gibberish, but look for seasoned traders in chat rooms trumpeting a certain fundamental. Do the due diligence needed, but these collectively rising comments about fundamental aspects of a coin point to the altcoin’s potential upswing.
For the first year or two, no trader can claim to confidently recognize a bullish trigger, as there are so many opinions and considerations in day trading. Still, looking at young coins, Masternodes are an indication of their future promise. In a nutshell, a trader might gain from a future price hike with coins like these, but also be receiving payments as long as they hold that coin.
Altcoin Day Trading Tip #8: Test Sample Trading Strategies
Something often forgotten and only remembered days down the line when things have become a mess, is that new trading strategies should be tested first. A dummy run or a very small investment initially is nothing but common sense.
It takes a moment and most rush on by, believing themselves beyond that kind of stuff. Never forget the immortal words of Warren Buffett: “The [exchange] is just a tool for transferring wealth from impatient people to patient ones.” Set up your bot after analyzing results of a few days’ trading if you’re a coder, or document and normalize the strategy yourself if you actively day trade.
Altcoin Day Trading Tip #9: Follow Diverse Media Sources
As valuable as CoinMarketCap and TradingView and the other principal industry data suppliers are, also make sure that you are gleaning overall market information from various sources. The various outlets like Github, Steemit, Reddit and even LinkedIn should be scanned daily for emerging news.
A good day trader is current. Informed. Able to avoid hype and anticipate opportunities as they arise. You might even want to aggregate the news, and can get a very accurate and consistent snapshot from CryptoFlash.io, for example.
Altcoin Day Trading Tip #10: Stay Committed
Enjoy the camaraderie but never let anyone deflate your enthusiasm. Not only people, but the daily dynamics too can again impact altcoin day traders far more than other types of traders.
Don’t forget you’re involved in a long-term build from daily snippets. Any given day lost to emotional turmoil costs down the line. Have a plan and stay on it, no matter how you feel. If it doesn’t yield the results you expect, change it on the back of facts and figures, never on a moment’s whim.
Never forget: losses happen to everyone all the time, even the billionaires. Successful traders are those who remain calm, get away from loss as soon as they can while heading towards possible gains with the same speed. A winner is just a loser who tried one more time. That applies more to altcoin trading than most other human endeavors. Enjoy it!