The rise and rapid expansion of cryptocurrencies bursting onto the scene has been absolutely incredible. No one could have imagined the response and how well accepted these digital currencies would actually be. The fact to the matter is that the world has now been forced to adapt and accommodate the use of a varying number of cryptocurrencies and their respective technologies which should better the world, with a perfect example of blockchain. Bitcoin was what kick started this wave of new currencies, and it is currently the most valuable cryptocurrency in the world at the moment being valued at just over $9000 and it appears nothing is going to slow it down.
The popularity of cryptocurrencies has meant that people all over the world can trade these assets, just like you would with the likes of stocks, bonds, commodities and Forex. This of course has been met with a flurry of crypto fans who are looking to ride the wave and get a piece of the pie and hopefully gain financial freedom by cashing in, when the time is right of course. A lot of people have taken rather drastic measures just to get the capital together so they can trade Bitcoin and other cryptocurrencies like Ethereum, Ripple, Verge and others. But is cryptocurrency trading something to be taken lightly or can anyone do it? well here are the pros and cons to day trading cryptocurrencies.
- Probably the most obvious one to mention is that the market is open 24/7, which means that you can trade from anywhere in the world at any time. Unlike some markets like Forex which shuts over the weekend, the cryptocurrency market is open to everyone at any time.
- The size of the cryptocurrency market is absolutely enormous with over 1600 cryptocurrencies that can be traded on popular platforms and on your phone. Whereas in the Forex markets, there are main pairs that are very liquid and are easy to trade but there are more exotic pairs that aren’t as liquid. With cryptocurrencies, virtually all of the pairs can be easily traded.
- Another great plus point to trading cryptocurrencies is that there is no need for a large amount of capital, unlike stocks. People can trade with as little as $100 and sometimes even less, so it is advisable to start small to begin with, then increase your capital as time progresses.
- The cryptocurrency market doesn’t follow market rules like other assets do, in the sense that cryptocurrency patterns take longer to play out. Because they take longer it means you have more time to process and analyze the data and make a decision on whether you are going to place a trade or not.
- Cryptocurrencies are very new and so there is little to no regulation in some part of the world, and this leave things open and vulnerable to criminal activity. Some cryptocurrency trading platform can be hacked by cyber criminals and some actually have, and their vaults of reserves have been stolen along with users’ capital with no trace left behind.
- Despite the fact that the cryptocurrency market is open 24/7, which may seem like a good idea, it can also be a bad one as well since you may need to be at your screens for a long time.
- Volatility is another key issue that has been raised by cryptocurrency traders, because some unlucky folk have seen their entire accounts wiped clean due to the volatile nature of cryptocurrencies. Some cryptocurrencies can experience massive price swings, moving hundreds of pips in just a few minutes so it is important to be aware of this.
At Darby Academy, we strongly recommend that you only start actively trading cryptocurrencies after you have gained the right knowledge. Long term profitable cryptocurrencies trading requires both knowledge and experience. To become a profitable trader, you’ll need to get educated and well practiced. Although it is easy to start, there are significant risks involved in trading cryptocurrencies.
Lastly, we strongly suggest that you do not begin trading cryptocurrencies until you have attended a cryptocurrencies course first. Sometimes we don’t know what we don’t know.