Many new cryptocurrency traders ask a common question: “Can you buy and sell cryptocurrency on the same day?” The answer is yes. You can buy and sell your cryptocurrency holdings on the same day, just like stock and ETF traders do in day trading.
Day trading has become a common trading strategy rising with the emergence of online trading platforms. As an illustration, our crypto trading platform makes crypto-trading easily accessible to the individual investor looking to make a quick profit from the cryptocurrency market’s volatility.
Day trading is simply the practice of purchasing cryptocurrency assets then selling them within one trading day. A short-term trading strategy, you will only hold your cryptocurrency purchases for seconds, minutes, or hours before selling them off again to make small but rapid profits. On the other hand, long-term traders buy and HODL till their crypto assets’ values rise over time.
The main difference between traditional financial day trading and the crypto same day buy and sell alternative are the rules. Regulators such as FINRA have Pattern Day Trader rules that govern ETFs or stocks same market day trading.
The cryptocurrency market is unregulated so, there are no limitations placed on crypto day trading. Therefore, you can play crypto hot potato with your assets and only need a good strategy and fast clicking fingers to excel at it.
A trading strategy will factor in transaction fees that may eat into your day trading profit. If you trade without a plan, bad trades and fees will wipe out your trading capital.
Factors That Can Hinder Same Day Buy and Sell Trades
Use of the Wrong Trading Tools
Day trading is a very dynamic process that happens at lightning speeds. For this reason, use our agile and nimble one-click crypto spot trade feature on Bingbon to make quick swaps and trades. One common mistake that a new trader might make is trying out same-day crypto trades via their crypto wallets.
Cryptocurrency wallets are designed for security and could limit your ability to day trade your assets effectively. You will need a lot of time to log in to your wallet, confirm your same-day buy and sell transactions before making a sale. Time lost equals lost opportunities.
Choosing the Wrong Exchange
Liquidity influences the speed of day trade sales in exchange. Trading via an illiquid crypto exchange will make it harder for you to exit a trade position at a good price. An exchange might be highly liquid but have a low trading volume.
Weekends, nighttime, and holidays often record-low trading activity. If you do not want to miss out on profit-taking opportunities, perform your day trading when the exchange is most busy. Trade at times when most users are active.
Are There Preferred Coins for Same Day Trades?
Crypto volatility plays a huge role in day trading success despite its roller-coaster character. Price swings open up decent profit-making opportunities for same-day buy and sell traders. For this reason, part of your day trading strategy should be the in-depth study of crypto volatility.
At Bingbon, we have excellent bitcoin and altcoin volatility and liquidity charts to guide your day trading strategy. Choose the most liquid digital currencies for day trading and trade when volatility and market demand are in your favour.
Bitcoin is the most liquid and one of the most volatile cryptocurrencies, so it is a favourite same-day buy and sell token amongst traders. You can trade using smaller market cap cryptocurrencies, but you stand a higher risk of facing massive instant price crashes.
Crypto day trading can be a very lucrative trading strategy. If you have the proper knowledge and mentality. You only need to learn how to perform it properly by creating a robust trading strategy and trading on those top-notch trading platforms such as bingbon.com.