Most of the BTC traders fail to segregate the differences between day trading and long term investment.
If you’re all set to be a part of the bitcoin trade, its better that you understand the differences in between the both. Though you can use all the accepted form of securities or trading assets in these two forms of crypto trade, but there are certain limitations in both of these two forms of investment.
Time limits are one of the biggest concerns
Time limits are one of the major concerns while trading the Bitcoins. Since, the crypto exchange market does not have any control upon the flowing of the bitcoins, as a day trader you need to be smart player. If you fail to sell the crypto after opening a trading position by the end odd the day, you lose the trade.
It’s one of the reasons, for which you’ll find only a limited number of traders in the market who takes the risk of rolling high capital in a day trade. Either they have years of experience in BTC trading and knows how to make a profit by rolling high capital in a day trade, or they’re much prone to take financial risks and roll the dice! Maximum gamblers trade a small amount in a day trade to bypass the loss in case they’ve a rotten luck!
When it comes to long term investment, traders usually take time to read the phenomenal occurring in the market. That’s because, the traders who target long term bitcoin investment, usually use maximum trading asset to buy the cryptos for retaining their currency value. Later then the price spikes, they can either sell it or use it for arbitrage trade to get maximum currency value from different currency exchange platforms. Usually the value of the bitcoins are very unpredictable. It might take a month or a year for the BTC values to fluctuate. As a long term investor of Bitcoin you must have the patience to wait for the right time when the crypto value spikes up. Once the price spikes up, convert it in the currencies you want.
Differences in the involvement of capital for each of them
Capital involvement is another important factor that traders need to sort out before beginning a trade. On the basis of their financial ability they choose either to be a day trader or a long term investor.
While a day trader can make more than 0.5-3% on the high at the end of per day, it’s quite likely that traders choose day trade for earning profit. In day trading the gains are quicker. Say for e.g. you’re calling a trade worth 25,000 US$ and make 10-13% per month. The next month you’re starting out with 30,000US$ and you’re profit might be around the same 10-12% and might be 13%. It won’t be more than this approx. figure nor less than this. As a newbie trader if you find it difficult to invest on the cryptos, you might take a look into the the official site of bitcoin pro, for knowing which form of trade investment suits you suitably.
Whereas, in a long term investment you can win millions of dollars. The trade won’t impact the performance of the bitcoins because, this form of trade is calculated on the basis of monthly or yearly performance. To get the potential trade return you might have to wait for a long time. It’s indefinite to say how much time it will take for the bitcoins to spike its value. That’s because, unless and until a nerdy miner solves a tricky mine block, a new bitcoin won’t be mined. If that happens, the value of your bitcoins might fluctuate and you never know your BTC value might spike up to 1, 00,000 US$, that you bought by trading your assets for 1000US$ only. Call that a luck anyhow!
The nature of risk varies from one another
As a long term investor, you need to wait for the right time and choose the right trade for yourself. If your trade selection is right, you can always expect a good ROI on each value you put on stake. As a long term player you might have to keep yourself updated with the opening trade positions shown to you by the online smart trading bot. When you see the right opportunity, never let it go. In day trading the risks are high that’s why, never stake on high value assets. People usually invest on low value trading assets to bypass the risk of losing maximum capital in a BTC trade.
These are a few basic differences that a trader must not forget while trading cryptos.