Wondering how to day trade cryptocurrency as a full-time career?
Did you know that job postings for cryptocurrency traders has increased 621% since November 2015? Even after a massive dip, cryptocurrencies are still the hottest thing on the investment market at the end of 2018.
The real question is how can you capitalize on the trend?
Mining cryptocurrency is still a trend, though it requires a significant upfront investment. You must acquire all the necessary hardware for the job which may cost more than $10k. Your other option is to trade cryptocurrencies.
You can hire someone to buy and sell for you. Or, you can do it all yourself.
Most of you reading this article have already done some trading yourself. So, how do you switch it to a full-time career? Well, we’re going to tell you all that and more.
How to Day Trade Cryptocurrency: Step 1, Evaluation
The first step–and possibly the least fun step–is to evaluate your expenses. Hey, if you want to dive into cryptocurrency full-time, you’ve got to figure out how much money you’ll need to earn. That means understanding your present budget.
Gather up your credit card and bank statements for the last two years. Evaluate your monthly living expenses. Start with recurring bills, like rent, utilities, and loans. Continue adding expenses to cover other monthly necessities, such as fuel, food, and laundry.
Build yourself a comprehensive list, noting each and every item. Yes, we know it’s not fun. But it’s necessary.
Becoming a day trader takes time. You must build yourself a financial buffer to sustain yourself as you build your career. We recommend saving at least six months’ worth of living expenses before you decide to gamble with your career change.
Step 2, Converting to Bitcoin
Bitcoin is the most stable and highest rated cryptocurrency. That’s why people use it as the basis for understanding their trades. What we’d like you to do is take the amount you calculated you’ll need each month and convert it to Bitcoins.
You’ve just written down your target goal. The bare minimum you need to survive each month as a day trader. You’ll need to cash out at least that many Bitcoins each month to pay your bills.
Is that an exact number? No. Unfortunately, the market fluctuates, so the value of your Bitcoins will fluctuate from day to day. So long as you expect to take out at least this amount each month, you’ll have a clear destination.
Step 3, Practice
You may already have plenty of experience trading, or you may not. Either way, it’s time to start trading paper. It’s an easy, pain-free way of determining when you’re ready to begin day trading crypto.
When you trade paper, you don’t actually trade hard currency. Think of it more like pretend trading or play trading. It’s an easy way of day trading cryptocurrency without losing your shirt.
Simply keep track of the trades you would have made had you actually been trading. Tally it up at the end of each day. Don’t forget to add any taxes or service fees you would usually acquire.
If you don’t want to keep track of it yourself, multiple websites also offer cryptocurrency trading simulators. You can play them like a game to grow more adept at trading. Be wary of the sites that require a fee for the use of their “free” simulators.
Arguably the best part of this process is that you can do it while you’re working. You needn’t quit your job to learn. It’s especially easy if you have a flexible job, one that will allow you to check on your trades each hour.
Step 4, Trade
By the time you actually begin cryptocurrency day trading full-time, you should have the following:
- Enough money in savings to cover six months’ worth of expenses
- Money to invest in cryptocurrency (between four to eight months’ worth of expenses)
- A proven track record paper trading
Next, you must choose your favorite websites for trading cryptocurrencies. Here’s a list of the most popular sites:
We recommend playing around on each for a few days before you choose which you like. Be sure you choose at least one site that trades Bitcoins back into your countries currency. You’ll need it when you want to cash out each month to pay your bills.
The rest you can leave in to increase your investment capital.
I Covered My Bills, Now What?
As with any career, you must work to set money aside for things besides your bills. Do you plan to go on a vacation soon? Do you have any special events, like birthdays or weddings, in the near future?
What about retirement? For some of you, it’s a long way down the road. For others, it’s sooner than you’re prepared for. Either way now is the best time to invest. Why?
Two words: compound profit.
If you start saving today, you have a larger investment capital tomorrow. If you trade every day, that amount continues to grow exponentially.
For example, let’s say you start your trading career with your $1,000 investment. If you trade using indicators and patterns that yield you 1% profit each day, you’ll earn $37,783 in one year.
That may not seem like much, but check out what happens by the end of the second year. If you continue making 1% profit each day and reinvesting that money, you’ll have $1,427,587 by year two.
Yes, in the real world, you need to account for other variables. You probably won’t work 365 days a year. You’re also going to have to pay your state and federal taxes.
Remember to think through all your costs before you begin trading full-time. Compounding interest can work against you as easily as compounding profit can work for you. Make sure you dial in all the numbers before you take the plunge.
Now that you’ve discovered how to day trade cryptocurrency, it’s time to give the process a try. You can trade paper, so it won’t cost you a dime.
All you need is a stable internet connection, an internet-ready device, and a method for keeping track of your trades. If nothing else, grab a pen and paper.
Write down each trade. Tally things up at the end of each day to see how well you performed. When you do well for a month or more, you can consider making that career change.
Was this information helpful? If so, come to check out our other articles on trading cryptocurrencies.