Benefits and drawbacks of crypto day trading.
Like every other business, learning to trade crypto requires time and effort; however, it can be gratifying for successful traders, especially those who want to be their own boss.
Benefits of day trading
Investors can set their own goals and work at their own pace;
There’s no overnight risk, which is real, especially in stock and commodity trading;
Potentially big profits and ideal conditions for leverage positions;
The possibility to get good returns even in bear markets;
Faster returns on investments;
Disciplined and experienced traders can allocate little daytime and be profitable with only a few trades, early in the morning, for instance, and have the rest of the day free; and
The learning curve can be infinite since there’s much to learn in technical and fundamental analysis for the curious and inquiring mind.
Drawbacks of day trading
Day trading asset allocation can be too high. Investment rule number one should apply to day trading, too: never risk money you can’t afford to lose;
Self-discipline can be tough to implement;
Day trading can be very rewarding but can also lead to significant losses;
Constant attention to the market. Facing a screen for long hours can be alienating and time-intensive. Stop-losses can be helpful but are not viable solutions in the long run;
Stress is a potential component and threat of day trading due to the high risks involved in volatile crypto markets; and
Tax compliance can be burdensome as day trading requires keeping an accurate record of all transactions. Investors must, therefore, also be their own accountants, which can be very time-consuming
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