If you want to know if it’s possible to make a living trading cryptocurrencies, the answer is easy: Rather not, at least not for the average Joe. There might be some exceptions who really managed to live from their crypto investments only, but there was surely a big portion of luck involved. Especially when such individuals were lucky enough to do some early investments in the right coins that went 1000x or so.
There might also be some guys making a real living by crypto day trading, but it’s not an additional investment with guaranteed success. The question should likely rather be: Is it possible to reach sufficient and consistent profits to be able to do nothing else anymore?
Professional traders claim that day trading is a business like any other business as well. But it’s for sure not the right business for everyone. Like there is simply no job in the world which is for everyone. We all have different talents, skills, needs and priorities.
With trading you need to be aware that you can only try to make profits – there is no guarantee that you will succeed and you can potentially lose all your stake.
Also, it only makes sense to try to make money with crypto trading if you are a certain type of person. If a lack of discipline, a general impulsiveness, a lack of control over your emotions, lack of consistency etc. is generally words that could describe your personally, then better stay away from trading at all! Even for disciplined people trading is only potentially profitable, but without any guarantee. But without this quality you have for sure no chance at all and will most likely lose all your money quickly.
Have you ever wondered why there are so many professional traders who claim to live from their trading activities, but still they try to sell you a subscription-based trading course? It’s because they obviously need more income streams if they don’t have a normal job besides trading.
However, if you really want to try to make money with crypto trading BESIDES your job, then you certainly need to be aware of the absolute basic requirements for potentially successful trading.
Requirements of Crypto Day Trading
Is Freedom A Goal You Would do Anything For?
The underlying goal is the most important drive for any long term success. You need to ask yourself if the idea of becoming financially free and even locally independent is such a strong drive and passion for you, that it will help you to comply with discipline, stay focused and deal with losses which are part of the game.
Do You Have the Necessary Psychological Conditions to be a Crypto Day Trader?
If you know you really want to try to make profits from crypto trading more than anything else, you should still be aware of the psychological setting which is needed to do this additional kind of investment.
What you need is:
- Self-Discipline
- Emotional Self-Control
- A strong sense of responsibility towards yourself
- A responsible way to handle money
- A strong focus on your goal
Self-Discipline
As somebody who would be kind of self-employed (on the side) you need the mindset of an entrepreneur. You need to trade concentrated and the best way you can, always keep a cool mind and consequently stick to your trading strategies – you need to take crypto trading for serious.
You need to keep track of your trades in a trading journal to keep an overview of profits and losses. Without a precise trading journal there is no way to keep track if you’re profitable or how much losses you’ve suffered. Sticking to your trading plan in each trade is a special challenge – Not doing so is one of the most common mistakes of traders in general. Changing trading decisions due to upcoming emotions of fear or greed within a running trade is mostly a bad idea.
That’s where we come to the second psychological requirement of a day trader:
The Necessary Emotional Self-Control as a Trader
The No1 enemy of each trader are his very own emotions. Markets are constantly ruled by fear and greed. Bull runs occur because everyone jumps on the train, one after each other, not to miss the train – driven by pure greed.
While bear markets or price dumps are ruled by naked fear – people even sell on very low prices just because the fear of losing more or even everything is overwhelming them. To succeed in crypto trading you need to control your emotions and stick to your trading strategies in a very rational way. The consequent use of stop loss orders is absolutely crucial.
A Strong Sense of Responsibility Towards Yourself
As a crypto trader you need to be a highly self-responsible person. You will only comply the above mentioned self-discipline if you are aware of the sense of responsibility you need towards yourself and your finances. You will be alone, the will not be a boss asking you for results or supervising your work.
So you need to feel the responsibility of a boss. You will be your own boss and you alone will be responsible for yourself. If you are generally a character that needs an ass kicker to get something done, then it’s not a good prerequisite for potentially successful trading activities. Be aware that this would definitely be a character trait you’d strongly need to work on.
A Responsible Way to Handle Money
A job that has to do with money should be done by someone who is good at handling money. If you’ve never been good with money, you should seriously ask yourself if activities related to it are the right thing for you.
A Strong Focus on Your Goal
Trading is not an easy investment activity all the time, so there can be days where your losses exceed your profits and you feel frustrated. Dealing with losses is part of investing and trading. You will only overcome negative emotions and losses when you keep your higher goal in mind. Only a strong focus on the self-responsible lifestyle you want for yourself will keep you upright and strong although there might sometimes also be your blood in the streets.
How To Try To Become A Successful Crypto Day Trader
In order to try to become a professional trader able to make a living from crypto trading you should first of all spend some time educating yourself about all important aspects related to crypto trading. Try to get as much understanding as possible about the territory you are about to enter.
The best way is to read some helpful books as well as good blog posts and one or the other forum discussion to get deeper into the field of crypto trading. One area you should also create clarity about are the tax laws of your country regarding cryptocurrency trades.
So far there exist tons of books about trading in general but still very few about the niche of cryptocurrency trading. Those few existing books about crypto trading are even mostly not very specific concerning trading strategies and technical analysis, which will throw you back to books about Forex trading.
We found out that there is a lack of good literature compiling the necessary knowledge regarding all major aspects of crypto trading, which is why we worked hard on a useful handbook including it all:
- An introduction to the world of crypto trading with an explanation of general trading rules and aspects you should be aware of.
- An introduction to Technical Analysis which will let you end up with an adequate set of tool you can use for your trades
- A range of crypto trading strategies explained, with chart images and at-a-glance-summaries
- An explanation of proper risk management with different strategies
- The major mistakes you should avoid in order not to make bigger losses
- An overview of how to use social media, not to waste too much time with nonsense
Click here to get to the ebook
