Pros and Cons Trading Cryptocurrencies

Our new cryptocurrency trading room (CryptoStreet) has had some great results over the last 6 weeks. With 130+ members so far, CryptoStreet is active 24/7 with many great traders and many newbies learning every day. Here are some pros and cons of trading cryptocurrencies versus trading stocks.

Pros

  1. More Time to Process Information: Cryptocurrency patterns take a little longer to play out. This means you have more time to process information, read the chart, and make a decision. You’re usually using the 15 minute chart for the intraday time frame instead of the 5 minute for intraday stock trading. Some people have difficulty trading the market open in stocks because of the extreme volatility, so the larger time frame gives you extra time to think through your trades. This also means that you don’t need 8 monitors to trade cryptos. It is much easier to trade them on your phone while you’re traveling.
  2. Can Trade Anytime You Want: Crytpos trade 24/7 which means you can trade whenever you want. If you have a full-time job, you can trade.
  3. Huge Range: Cryptocurrencies right now have huge intraday ranges. It is very realistic to capture a 5-10% move in a few hours in cryptocurrencies. Cryptocurrencies like Ethereum and Litecoin have had especially good ranges to trade around as of late.
  4. No Pattern Day Trader Rule: Unlike with stocks, you do not need $25,000 to day trade cryptos. This is useful if your capital is an issue and you’re looking to daytrade.

Cons

  1. Slow Moving: If patience is hard for you, cryptocurrency trading will be difficult. It is much rarer to get 5 percent moves in 5 minutes in Cryptocurrencies unlike in stocks during the market open. You have to wait longer to capture the full setups in cryptocurrencies, and also sit in your positions longer.
  2. No Respite: Because the markets trade 24/7, you will definitely be losing some sleep as a crypto trader. If you’re the type that has trouble detaching from the markets and you’re constantly checking quotes when you have a position, trading cryptocurrencies might be a little overwhelming for you. You should make sure you’re trading a size small enough so that you’re not anxiously checking your phone every 5 minutes.
  3. Unregulated Market: Cryptocurrencies are an extremely new market, and there is very little regulation. This means you have to be very careful with the exchanges and cryptocurrencies you put your money into. Here is a list of our recommended exchanges with their pros and cons.

Kunal Desai is an American day trader (stocks and cryptos) and founder of Bulls on Wall Street and Bulls on Crypto Street, two online trading academies and informational publications. He has been featured in many high profile publications like Inc, Forbes, Buzzfeed, and Fortune. He has spoke at trading and business events all across the World.

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