Is it good for me to jump in to Intraday Trading?
As a trader (you may call me an Intraday Trader); I have never really come across such a volatile market in my life, ever. Though this has really helped me (and my talent) to sharpen a lot more and turn more mature since past few years, alongside keeping a track of all the news where it is not necessarily validated, rather put forth as a rumor. Most of the traders in this market have lost huge pile of their hard-earned money; probably because of the Fear of Missing Out (FOMO), no one wants to miss the train, or say rocket. The question mostly asked is, would you consider trading as pure speculation or a masterpiece of data analysis?
On the other hand, day traders need a lot more specific news, views and ‘patterns’. With ‘patterns’, I mean, the Candle Stick Patterns. Well, to be honest, these patterns really do not have much relevance to the upcoming market movement. Why and How can I say so? Because, there has been numerous times when the candles do not ‘react’ the way it should after a certain ‘pattern’. Also, it is just a probability that the next candle could be ‘this’ or ‘that’; depending on the previous candle sticks and it’s patterns. Which means, you can’t rely on them independently. To assist, we have certain ‘indicators’. You MUST use indicators along with the Candle Stick Charts for better analysis and outcome.
There are two types of indicators, broadly.
- Leading Indicators.
- Lagging Indicators.
- Leading Indicators: These indicators are those that outline the market movement in a more sideways or non-trending market. For eg, Most of the Oscillators, Relative Strength Index, Stochastic RSI, etc.
- Lagging Indicators: These indicators are those that outline the market movement in a more trending market. For eg, MACD, Bollinger Bands, etc.
These indicators mostly help determine the direction, the momentum and the volatility for any coin or token. Here is a post about the Technical Indicators that can help you gain more insights about the same.
Now that you know that such indicators might help your analysis; feel free to play with them, because all of us have a different set of targets and different rules for market analysis and that it is not universal; since whatever is overbought is overbought but you can’t say about the span of the bullish interval, or what is oversold is oversold but you can’t say about the span of the bearish interval. With that, I mean, you can definitely find out the next move, but probably won’t be able to find out the span of the next move.
You know once it has touched the Oversold, it has to rise up, but for how long would the bears continue? Also, once it has been Overbought, it has to dip down, but for how long would the bulls continue? Such things may require even more explicit and in-depth analysis. The displayed Stochastic Relative Strength Index is of a coin in downtrend, interval set at 1 hour. What else can you make out of it?
Oh Yes! There are certain ‘settings’ you need to set for your graphs to display the data you wish to see. I preferably set the Stochastic RSI as: Period 7, Overbought 70, Oversold 30. Along with these, there are Moving Averages (of 8 different types), the crossovers and intersections of which produce a significant trend idea. It could either be upwards or downwards. It all depends on the way you interpret.
Remember, the longer the Period the long-term results it would yield. So, in this case, the Period is set at 200 and 100. Which means, the graph has analyzed the past 200 candles to draw the purple line and past 100 candles to draw the silver line; for a time interval set at 1 minute.
The other way to trade is the News Based Trading Strategy. The moment you hear about a partnership, any roadmap accomplishment, a new product, a new development you can use the same for your benefits. Always keep in mind, Buy Low and Sell High.
To let you practice more of it, I would suggest you to start Paper Trading. This is still practiced daily by a lot of my friends and clients. Just analyze the coin or a token or any stock if you wish to, and note it on a piece of paper and set a target. You can either buy or sell; it’s up to you. Check your results. I would initially suggest you to do one trade per coin; later on you can add more of it, as in, buy every dip strategies. The Buy Every Dip thing helps you achieve a better Buying Average and hence helping you to achieve a closer Selling Price. This post has gone a lot bigger than I expected I would write; but it is just that it is a humongous task to explain the most minute bit of intraday trading.
Also, remember that the crypto exchanges are online 24 x 7; you might have to go to work, eat, sleep or party but the market is going to do its job i.e. move. Whether upwards or downwards, it depends. So you need to keep a constant closer look at the market for your targets. With that I mean, it has been a couple of times that the coin was just short of 100 satoshis to meet my target and has reversed back to the negative side of the investment; I hope you understand what I mean. So, keep a closer look.
I hope I have been able to give some level of insight and ideas about, how to practice and how to make the most out of indicators. Feel free to ask your queries, I will try my best to reach out to you personally and come up with an answer.
Remember: None of these is an investment advice. Please consider paper practice, as mentioned.