As an investment strategy, day trading crypto is an approach that relies on compounding small gains over a protracted period of time. This is because day traders try to profit from price fluctuations of assets—including crypto— within a short time frame.
As such, day traders execute multiple trades within a single day in order to accumulate significant returns. But is day trading crypto the best strategy for getting a return on your investment? Well, the almighty Reddit is here to help us answer that seemingly simple but deeply troubling question.
Reddit Argument 1: The ground is constantly shifting, so watch out!
Cryptocurrencies are promising both as assets and as a medium of peer-to-peer exchange. However, one thing that characterizes crypto is that it is a very volatile asset. This is due to the highly speculative nature of the crypto market.
Therefore, day trading crypto further exposes you to the adverse consequences of crypto volatility and can you can lose money easily. As one Reddit user puts it: You’re better off trading traditional stocks, crypto is super volatile since we’re so early, so it’s super risky to day trade. Verdict? Using volatility as a metric, probably not worth it at all.
Reddit Argument 2: Once greed gets the better of you, it’s over for you
If we are to be entirely honest, many people venture into day trading crypto purely out of the desire to make profits fast. Compound this with the fact that many see the volatility of crypto as an opportunity and you have an investment strategy purely inspired by greed.
Unfortunately, this greed will drive investors to sell or purchase more than they should at the wrong time and then bam! The whole house of cards collapses around them.
As one user advises: If you are to consider day trading or using leverage, taake profits!! Don’t hold and think “yeah tomorrow it’ll keep going up.” You will wake up with your account liquidated. It happened to me and happens to many other people. Need we say more? Day trading crypto is tricky.
Reddit Argument 3: You need a sixth and seventh sense to make day trading crypto work
For you to make a profit on the sale of an asset, you must always sell when prices go up. When day trading crypto, this happens very fast and in a short time frame. As such, with the right timing, you can make a killing. But you know what else?
Prices slump just as fast as they rise. Therefore, you have to be as sharp as a hawk when day trading crypto. You also have to invest a lot more time into learning the dynamics of day trading crypto, collect adequate accurate information, and practice the art consistently.
According to one user: It does require a lot of patience and self control. Most people fail at day trading because they’re too impatient or theirFOMO gets crazy. But then, how do you practice patience in a “sport” that requires extreme agility such as day trading crypto? It is almost impossible!
As such, day trading crypto— while potentially profitable if you are lucky— is just too unreliable and unpredictable. It’s more of a gamble than an actual investment strategy and can result in devastating losses however hard one may try to execute trades well.
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