Can You Buy & Sell Crypto On The Same Day?

You may have heard expressions like ‘diamond hands,’ ‘hands of steel,’ ‘hodl,’ etc., among crypto enthusiasts. Those terms urge people to hold on to their desired coins even if the market is against them.

To be certain, holding cryptocurrencies for long periods has often proved to be very profitable. For example, imagine someone who bought one Bitcoin when it reached one dollar per BTC in 2011. If all he did were hold it for ten years without selling, he would now have about $63,000. That is a very remarkable year-to-date gain. No other asset can give you that return.

However, not everyone is that patient. Most people want to make profits on their crypto investments now. That is why many are interested in Day trading – the art of buying and selling crypto on the same day. Are you one of those people? If yes, this article is for you. You’ll learn the factors to consider when choosing your day-trading strategy. Let’s begin

First, we will explain why day-trading is

WHAT IS DAY-TRADING


bitcoin day trading

Day-trading is a trading strategy that leaves little time for waiting. It’s a familiar term in the financial markets in which assets are bought and sold back within the same day. It could be as fast as minutes or as long as hours, but it never exceeds a day.

It is favored by traders who have the time and energy to constantly monitor price charts and other indicators to determine the best time to enter or exit a market. There have been a lot of day-trading strategies over the years, and it’s usually best to try a few ones out to determine which one is best for you and up to your speed.

FACTORS TO CONSIDER WHEN TRADING ON THE SAME DAY


Day-traders ride on the volatility of crypto assets. When done properly, this volatility can be a source of significant gain. However, there are several factors to consider before choosing day-trading as a way of making a living. Some of them are:

  • Price Action: Price action refers to the up and down movements of cryptocurrency prices in a given time. It is one of the most popular variables that day-traders observe before entering and exiting a market.

Price action is plotted on a chart and can be analyzed using various chart settings. The most common among these are Japanese candlestick charts, line charts, and bar charts.

The basis behind using price action to forge and maintain strategies is that prices tend to follow a particular pattern if nothing drastic happens. Thus, different names have been given to those patterns.

  • Trends: This is another variable that should be considered when daytrading. It usually comes on the back of price actions and helps traders put meaning to the charts in front of them.

These trends have been given different names. There are ascending and descending triangles and wedges, bull and bear flags, ascending and descending channels, heads over shoulders or shoulders over heads, double tops or double bottoms, etc.,

Analyzing these trends can give a trader a good idea of the next price direction of an asset. That is what is known in the finance world as technical analysis.

 For example, a bull flag is usually formed when an asset has seen a massive price increase and is now consolidating. In such cases, it might be an indication that more is yet to come and might be another opportunity for traders who missed out on the initial pump to get on that price action.

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  • Coin Volume: It’s another indicator that is considered along with the price action of a coin. You can usually get this at the bottom of most trading charts today. It tells you if a recent price action is sustainable or not

To illustrate, if a coin starts surging in price and the volume also increases proportionally with it, it’s an indication that many people have started buying that coin. It may be because of recent news or may just be organic growth. In such a case, you can decide to enter the market as there is good reason to believe that the coin will still go up in value.

On the other hand, if a proportional increase in volume does not accompany the coin’s price increase, it means not many people are trading the coin at that point. The price action is thus unreliable, and it may be best to hold on and observe how things play out before entering the markets.

  • Fees you pay to exchanges: This is another critical thing to put in mind if you want to make a profit from day-trading. This is because day-traders are usually content with little profit on each trade since they enter and exit trades many times a day.

If care is not taken, though, your little gain will be swallowed up by the ‘negligible’ fees you pay to exchanges for trading. Let us take daytrading on Binance exchange as an example

On Binance, the trading fee for the lowest level(VIP 0) is 0.1% for maker and taker orders. This means that if you enter a trade with 1000 dollars, you would be charged 1 dollar for entering the trade and 1 dollar for exiting. That’s a total of 2 dollars as the fee.

Therefore, you have to put this in mind as you enter and exit trades. If you want to make 2 dollars profit on every 1000 dollar trade, you have to make a 4 dollar price gain on an asset before you exit the trade.

FREQUENTLY ASKED QUESTIONS


How fast can I sell Bitcoin after buying?


It all depends on the means of trading and the network congestion at that moment. For example, if you’re trading in exchanges, it’s usually fast, especially if you select market order. On the other hand, trading through p2p may take longer because you have to send it to another person’s wallet, and you may waste some time waiting for the transfer to be confirmed on the blockchain.

Can you buy and sell Bitcoin instantly?


Yes, you can. The best way to do this is to trade on exchanges to facilitate instant trading. For an even better experience, choose an exchange with sizeable liquidity

Can you buy less than one Bitcoin?


Yes, you can. In fact, most traders do not have up to one whole Bitcoin. Most traders have fractions of Bitcoin, known as satoshis(sats for short). On some exchanges, you can trade with low as five dollars(which is around 0.000079 BTC at the current price).

Where can I buy and sell Bitcoin easily?


There are many good exchanges around where day-traders can make a living. Prominent ones are Bittrex, Bitfinex, Coinbase, Binance, eToro, Kraken, etc.,

Also, check out our reviews on crypto exchanges that can be good for day trading:

Can you buy and sell Dogecoin on the same day?


Yes, you can. If you’re trading Dogecoin on an exchange, you will likely be able to buy and sell it instantly. However, if you’re trading with p2p and need to send it to a wallet, it might take longer. This is because Dogecoin confirmations take between 45-60 minutes.

Can I buy and sell Bitcoin the same day on Robinhood?


Yes, you can day-trade Bitcoin on Robinhood. However, Robinhood doesn’t allow you to actually purchase the asset; you only make bets on it. Also, the price that Robinhood sells crypto may be slightly higher than that of other exchanges. That’s another thing to put in mind if you’re thinking of day-trading on Robinhood.

Can I buy and sell Bitcoin the same day on Coinbase?


Yes, you can. Once you’ve deposited into your Coinbase account, buys and sells are instant, a thing of joy for day-traders. This mechanism has been in place since August 8, 2018. Before then, you would have to wait five days for your funds to settle after using them to purchase crypto.

Can you buy Crypto any time of the day?


Yes, you can. That is one of the advantages of the crypto market over other financial markets – the fact that it can be traded 24/7. However, trade volume is usually low on weekends, so you might want to be wary of that.

How many times can I buy and sell crypto on Robinhood?


You can only daytrade three times in a five-trading day period on Robinhood. Anything above that, and you would need to have a minimum of $25,000 before you can continue.

Can I sell Bitcoin whenever I want?


Yes, you can. Since the cryptocurrency market is open 24/7, you can trade Bitcoin and other cryptocurrencies any day, anytime.

CONCLUSION


Daytrading can be very profitable. To make a success of it, though, you need to identify what strategy works for you and stick to it. Also, you should be disciplined enough to know when to enter and exit a trade. Above all, keep in mind that you can lose everything within an instant, so only trade with money you’re prepared to lose.

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CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

Torsten Hartmann

Torsten Hartmann has been an editor in the CaptainAltcoin team since August 2017. He holds a degree in politics and economics. He gained professional experience as a PR for a local political party before moving to journalism. Since 2017, he has pivoted his career towards blockchain technology, with principal interest in applications of blockchain technology in politics, business and society.

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