The Daytrader is the third archetype and arguably the most difficult. But also the most profitable, if done right. You can basically make money every day, all day, if you wish.
Daytraders are Ninjas in this space. They are logged into the market like no one else and can predict the future like it’s nothing. They read the market like a book and if they are good at it, Lambo’s are easy to achieve.
This is unbelievably difficult and takes multiple months, if not years of practice to be done right.
The Daytrader abuses the fact, that markets like these have thousands of trades every day, throughout the whole day. This leads to the price moving a bit (sometimes more) over 24 hours.
He uses this fact to trade (probably with leverage) small intraday movements and make profit this way.
But don’t think for a second, that any Daytrader always hits all his trades right.
People say you only need to hit 51% of trades right to be profitable. Which just tells you how much failure is involved. And it makes sense, because this market is very volatile and predicting the future, even for some hours, is, well, difficult.
The Daytrader doesn’t care about fundamentals very much. The majority is done through technical analysis. Price-Action, support, resistance, F
If done right, you can make a shitton of money every single day.
The gameplan is to learn it. Being a Daytrader is incredibly difficult, so before you jump in, please take lessons about it, learn to read charts and how markets behave at a minimum.
Intraday movements are usually less volatile than over longer timespans. Therefore the Daytrader has to rely on leveraged-trading. Which means he expands his position in a trade with money, that isn’t his.
I’d say the majority of Daytraders only trade Bitcoin. Maybe ETH as well, but for classic everyday trades, it’s mostly Bitcoin.
This is a whole topic on its own, so, for now, I am just gonna scratch the surface to portray the archetype. Day trading has one big advantage: you can bet on the price dropping (which is called “shorting” an asset). This way you can make money regardless of the price’s direction.
Being a Daytrader doesn’t have many layers to it, compared to the other two. If anything, you can decide to only day trade Bitcoin and no other coins. Or only every other day. In general, the process is the same though.
Pro’s and Con’s
- Massive profits possible, if you are good!
- Very quick money, way quicker than Swing-Trading
- If you like it, you can do this every day as your “job” and make money
- Fundamentals and research into coins aren’t as necessary
- Unbelievably difficult
- No, it’s really fucking difficult
- Very exposed to random events and price-spikes
- Huge understanding of markets, technical analysis and charts needed
- Can be very stressful
- Taxes, man, taxes. Every trade has to be taxed, and you’re trading multiple times a day.
So there they are, the three archetypes. Let’s go into detail on how to choose them here.