I was practicing day trading this morning with LTC because I don't have a lot of money to get the large profits with BTC/BCH/ETH. I am under the understanding that the percentage rate when trading small amounts of BTC/BCH/ETH can and will result in profits(and possibly losses) but because of how expensive BTC/BCH/ETH is, the percentage will be very low obviously higher with ETH and then BCH respectively but still lower then using LTC. SO because of that I choose to use LTC.
I've been studying the BTC/BCH/ETH/LTC graphs everyday(less so with BCH since its new) And the first thing I noticed was how volatile all of these coins are. They are all perfect for day trading as long as you know there is an inherent risk involved.
there were major dips and rises in all of them today, I was not able to capitalize on it at all during the day because I had to take care of other business.
In my opinion if you want to capitalize on day trading first you have to research how your particular exchange works, some are setup better then others, but if you have a good amount of money you can get a API that allows you to set up your screen so all the info you need is there without having to scroll to look for order books, historym depth charts, graphs, analysis and the state of the price. Order books are important to watch because it tells you where your order is in the book if your placing a BUY/SELL limit order. DEEP LIZARD on you tube has tons of information on the GDAX exchange platform and they go into great detail on how to use the GDAX exchange to your advantage. check them out you wont regret it. this post is sided to using GDAX exchange or if you can get an api then it can be setup like gdax or even better.
things you need to decide on.. which coin will you be day trading? for beginners, you need to concentrate on one particular coin and make sure the coin and exchange has high volume which will result in a lot of action. to sum it up, your profits will be based on the amount of money you can use in one given trade. if you have a low, mid, mid/high, high amount of money and you want to be able to get out back into your FIAT your best bet is to stay away from alt coins..
things are more complicated with alt coins. you can tackle them later on if you want just know that instead of day trading one particular alt coin you will also have to be watching the coin you are trading the alt coin with as well. if you decide your done with your alt coin for the day and you want to get back to FIAT you have to make sure that the coin you day traded your alt coin with is at the same price you bought it at OR HIGHER. if it isnt and you get out of it and back to FIAT you could possibly lose all your profits if the Coin you used to daytrade the alt coin with IS DOWN. I know some people tend to trade with BTC for alt coins and stay in BTC when done. if you did that today you would have lost a ton unless you calculated it and bought when it was dipped in that case your profits would be much higher with the alt coins that you gained on. for me and any beginner this is too complicated for starting. in my case I want in and out of coins back to fiat to keep it simple.
I am not doing alt coin day trading yet because it's to risky, especially the way things were this morning with BTC/BCH/ETH/LTC.
as far as the amount of profits goes. BTC has substantial loss and gains on most days but you need a lot of money to do it with BTC so just for a simple way to understand it here it is:
LTC lowest price Highest profits with lowest amount of money
ETH mid low price mid high profits with 2nd to low/mid amount of money
BCH mid price mid profits with 3rd to mid amount of money
BTC high price low profits with 4th to highest amount of money
I hope that makes sense.
I have found that GDAX is the ultimate platform unless you have a program that interfaces with the exchanges this is the best one for day trading because if you place LIMIT orders that go onto the order book THERE IS NO FEE for buying or selling!!!!!!!!!!! if you place market orders there is a .25% fee. DEEP LIZARD ON YOU TUBE HAS GREAT INFO ON ALL OF THIS its where I learned to refresh my tired ass.
on any given day on GDAX one of these 4 and/or all can produce large profits its just depends how much skin you have in the game. I am Encouraging the use of GDAX because of the NO FEE buy/sell limit orders or you can buy/sell market orders and incurr a .25% fee on all your trades please make sure you take into account your fees if you do use market buy/sells
to try and make it clearer lets say you have $100,000 and you did all your research and your ready to test out day trading. first thing you need to do is do it with $100 and get a grip on the speed it takes to enter your orders and get them on the order book for buy/sell limit orders with NO FEES
if you just want to buy/sell market expect a .25% fee and take that into consideration and deduct it from your profit margin. Its a catch 22 deciding because if you do limit orders they are harder to FILL then a regular market order because you have to be quick on the laptop to replace orders if your order goes higher on the buy/sell side of the order book.
I'm going to make up fictitious prices just so you understand the profit ratio here and understand why its better to day trade with a lower priced coin.
All of these trades have a strategy of $5 coin rise and with a Buy/Sell LIMIT, "POST ONLY" ORDER on GDAX:
LTC @ 100 Buy 100LTC for $10,000 Sell @ 105LTC x 10,000= $10,500 Profit= $500
ETH @ 600 Buy 16.66666666666667 ETH for $10,000 Sell @ 605ETH x 16.66666666666667 = $10083.33333333334
Profit= 83.33333333334
BCH @ 2000 Buy 5 BCH for $10,000 Sell @ 2005BCH x 5 = $10,025 Profit= $25
BTC @ 10,000 Buy 1 BTC for $10,000 Sell @ 10,005BTC X 1 = $10,005 Profit= $5
If you do not use the Buy/Sell LIMIT, "POST ONLY" ORDER approach the orders above would have incured a .25% for BTC and .3% for ETH and LTC buy AND sell fees (obviously you would need to account for this if this is your strategy and thus you would need to get out later then you would to cover the FEE) this makes day trading even HARDER if your making short plays.
LTC @ 100 Buy 100LTC for $10,000 Sell @ 105LTC x 10,000= $10,500 Profit= $500
(buy fee $30 sell fee 31.50= 61.50- 500=438.50 Profit)
ETH @ 600 Buy 16.66666666666667 ETH for $10,000 Sell @ 605ETH x 16.66666666666667 = $10083.33333333334
Profit= 83.33333333334
(buy fee $30 sell fee 30.25= 61.25- 83.33333333334 =22.08333333334 Profit)
BCH @ 2000 Buy 5 BCH for $10,000 Sell @ 2005BCH x 5 = $10,025 Profit= $25
(buy fee $30 sell fee 30.075= 60.075- 25= -35.075 LOSS OF CAPITAL)
BTC @ 10,000 Buy 1 BTC for $10,000 Sell @ 10,005BTC X 1 = $10,005 Profit= $5
(buy fee $25 sell fee 25.0125= 50.0125- 5 = 45.0125 LOSS OF CAPITAL)
I've done this to illustrate the need to adjust your strategy before you enter into the BUY and you are LIVE waiting for a certain Price to hit before you can get out to make a profit and cover your lossses by KNOWING what will make you the profit you are looking for. plus the fees associated with the buy and sell. Its always best to aim for a low profit and if it keeps going up adjust your sell limit price to bear the fruits of your hard work.
Day trading isnt for everyone you have to be super concentrated when you buy in if your going for a quick profit. for instance if the stock takes a dip(usually because a whale sells) You have to be ready for it or you can miss it completely! I said earlier all 4 coins on GDAX had at least 2 substantial dips in price and if you were concentrating on the graph and you caught it there was at least $50 in less then a minute that could have been made on each share you purchased hence why a lower priced coin makes you more money... I hope this was helpful. I may even make a thread for it to share the info.
I may have made math errors if i did point them out and if theres anything I was wrong about please point it out I want to make sure I have it down correctly. hope you like this!
one cavaet is that I know that you can make great profits with BTC because when the price changes with BTC and even BCH the range of price rise and fall is more then ETH and LTC but it works backwards for BTC if you only trading with a percent of a BTC or BCH SO I get that part. I guess in the grand scheme if you want to just get good at day trading any coin will do but after all it would be nice to make a larger profit then a smaller profit when starting out regardless right?
