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How to Become an Active Trader: Become a Day Trader and Reach Market Success

Trading and Scalping
CScalp explores the essentials of becoming an active trader. We delve into everything from the basics and the crucial knowledge needed to get started, to select the right trading platform and calculate your fees. Additionally, this guide offers valuable tips for effective active trading in the cryptocurrency market.

Attention! This article is for informational purposes only and does not contain recommendations or calls to action.


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How to become an active trader: A man is smiling in front of his laptop and a price chart.

Becoming a Full-Time Active Trader

Active trading in the cryptocurrency market entails participating in the buying and selling of digital currencies to generate profits from short-term price movements. The digital asset landscape can offer substantial opportunities due to its volatility. To become an active trader in this space, you'll need to work every day and develop a solid understanding of the market, including the various types of cryptocurrencies, how they function, and what impacts their price fluctuations.

Understanding the Basics of Active Trading

Consider trading as the art of exchanging cryptocurrencies to generate a profit. At its core, trading means buying at one price and selling at another within a certain timeframe.
Your journey to becoming an active crypto trader starts with education. Equip yourself with knowledge about blockchain technology and the specifics of each coin you're interested in. Monitoring the market for trends, staying updated with the latest crypto news, and connecting with a community of traders can further enhance your trading skills. Remember to establish a rigorous risk management strategy, as cryptocurrency markets can be unpredictable, and swift changes in price can occur.

Choosing a Suitable Exchange

Selecting the right exchange is an important decision that can significantly influence your trading success.

Factors to Consider in a Crypto Exchange

When you're looking for a cryptocurrency exchange, it's important to assess its reputation and regulatory compliance, as well as other factors:
  • Crypto Access: Ensure the exchange provides access to a wide range of cryptocurrencies.
  • Security Measures: Evaluate the security protocols in place to protect your transactions and funds.
  • User Interface: Select an exchange with an intuitive and responsive platform that suits your trading style.
  • Customer Support: Ensure that customer support is responsive and knowledgeable about cryptocurrency markets.
  • Compatibility with trading platforms: Take into account selecting an exchange that can be integrated with CScalp's free trading platform to take advantage of its benefits.

Understanding Fees and Commissions

Crypto exchanges charge fees for executing transactions, which can impact your profitability.
  • Transaction Fees: These are fees for each trade you make, usually a percentage of the trade volume. For example, if you trade with a volume of less than $10,000, you may be charged a 0.2% commission, but if you trade above that amount, the fee may drop to 0.15%, and if you trade above $50,000, your fee may be reduced to 0.1%. It is important to keep an eye on fees while trading.
  • Withdrawal Fees: Some exchanges charge fees for withdrawing funds from your account. For example, $15 per wire transfer or 0.0005 BTC per crypto transfer.
  • Commission Structure: These can be a fixed rate or based on the account tier, which might provide a reduction in costs with higher trading volumes.
Understanding the fee structure is crucial as it can affect your net returns on investment. Always read the fine print to avoid any surprises with hidden fees.

Developing a Strong Trading Plan

Before diving into the nuances of an effective trading plan, it's critical to understand that a plan is more than just an entry and exit strategy – it's the blueprint for your cryptocurrency trading journey.

Importance of Having a Trading Strategy

Your trading strategy is the foundation upon which your cryptocurrency trading endeavors are built. Without a coherent trading strategy, you're essentially navigating the crypto market blindfolded. A well-researched strategy guides your decisions, helping to remove emotional responses from the equation. It should encompass:
  • Education: Stay well-informed about the latest cryptocurrency trends and news to anticipate market movements.
  • Technical Analysis: Utilize charts and patterns to forecast potential price movements. Learn more about technical analysis in our blog.
  • Fundamental Analysis: Analyze the intrinsic value of a cryptocurrency based on economic and financial factors.

Risk Management Practices

Risk management is the safety net that should be a part of every trading plan. In the unpredictable realm of cryptocurrencies, it's vital to establish clear-cut risk parameters. These include:
  1. Determining Risk Tolerance: Understand how much volatility you can comfortably endure.
  2. Setting Stop-Loss Orders: Protect your investment from significant losses by setting predetermined Stop-Loss levels.
  3. Position Sizing: Allocate only a certain percentage of your portfolio to any single trade to avoid over-exposure.

Incorporating Market Analysis

Market analysis is the compass by which you navigate the crypto market's rough seas. Regularly incorporating both technical and fundamental analysis into your trading plan enables you to:
  • Make well-informed decisions based on market trends and news.
  • Understand the broader market sentiment and conduct insightful technical analysis, observing chart patterns and indicators.

Trading Environment: Select the Perfect Trading Software

Creating an ideal trading environment is paramount in cryptocurrency trading, where selecting the right trading software forms the foundation of your setup. A platform that offers robust security, real-time data, comprehensive analytical tools, and smooth execution is essential. In addition to the trading platform, integrating price-tracking apps and news aggregators helps you stay informed about the volatile cryptocurrency market.
CScalp exemplifies these needs for professional traders, particularly in crypto scalping. It offers an optimized interface focusing on order books and supports multiple instruments across various exchanges. CScalp's features such as real-time market data, advanced order types, multi-exchange connectivity, and a user-friendly interface cater to the fast-paced nature of cryptocurrency trading. Tools like multi-account management, risk calculator, and additional resources like Trading Diary and chat support enhance its utility, making it a comprehensive tool for both novice and experienced traders.
Finally, setting up your physical and mental trading space is crucial. A clutter-free, distraction-minimized area aids in clear decision-making. Since cryptocurrencies trade around the clock, identify optimal trading hours that align with significant market movements and suit your lifestyle. Above all, personal discipline is vital; adhere to a well-defined trading plan with strict rules for entry, exit, and risk management to avoid emotional trading pitfalls. Remember, a well-prepared environment is key to making rational decisions in the dynamic world of cryptocurrency trading.

Mastering Active Trading Tools

To excel in cryptocurrency trading, you need to be proficient with various technical indicators and utilize sophisticated trading software. These tools are paramount for analyzing market trends and making informed decisions.

Technical Indicators and Charting

Your ability to read and interpret price charts is crucial in cryptocurrency trading. Technical indicators serve as vital tools to analyze market movements. Two essential indicators include:
  1. Relative Strength Index (RSI): This momentum oscillator helps you understand whether a cryptocurrency is overbought or oversold, providing signals for potential price reversals.
  2. Moving Averages (MA): By smoothing out price data over a specified period, MAs can help you identify trends. The two commonly used types are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA).
When charting, make sure to:
  • Utilize candlestick patterns to identify market sentiment.
  • Apply support and resistance levels to pinpoint entry and exit points.
  • Examine volume to confirm the strength of a trend.

Executing Trades with Discipline

When you venture into the world of cryptocurrency trading, executing trades with discipline is paramount. It's not just about knowing when to enter a position, but also how and when to exit, ensuring you mitigate risks and protect your investment.

Order Types and Placement

When trading cryptocurrencies, the type of order you place can impact your execution price and strategy outcome. There are several order types, but two of the most common are:
  • Market Orders: These are executed immediately at the current market price. They are useful when you wish to enter or exit the market quickly without concern for slippage.
  • Limit Orders: These allow you to set a specific price at which you want to buy or sell. A buy limit order will be executed at your specified price or lower, while a sell limit order will be executed at your specified price or higher.
Proper use of order types is a fundamental discipline in trading. It allows you to focus on your strategy, establish clear entry and exit points, and avoid emotional decision-making.

Establishing Stop-Loss

A Stop-Loss order is a critical tool for managing risk. You set a Stop-Loss at a certain price point, which, if reached, will automatically sell your cryptocurrency to prevent further loss. Here's how to approach it:
  1. Determine the maximum amount you are willing to lose on a trade.
  2. Place a Stop-Loss order at a price that reflects your risk tolerance.
  3. Regularly review your Stop-Loss orders to adjust for market changes or to lock in profits as trades move in your favor.
By defining clear Stop-Loss procedures, you maintain discipline in your trades, ensuring you aren't swayed by market noise or temporary volatility. In CScalp, there is an automatic Stop-Loss that you can set to protect your assets.

Adopting Different Trading Styles

Below, we explore three prominent trading styles, including day trading, swing trading, and scalping, each with its own essential techniques and strategies.

Day Trading Essentials

Day trading in the cryptocurrency space involves making multiple trades within a single day, aiming to capitalize on short-term price movements. As a day trader, your fundamental toolset should include:
  • Real-time charts: Utilize candlestick charts to read the market sentiment.
  • Technical analysis: Apply indicators like moving averages and RSI to identify entry and exit points.
  • Risk management: Set tight Stop-Loss orders to minimize potential losses.
Remember to maintain constant market vigilance, as cryptocurrencies are known for volatile price swings within short periods.

Explore Scalping

For those who thrive on rapid trades and minimal profit margins, scalping within the crypto market can be particularly exciting. Scalpers must:
  • Monitor the order book: This reveals buy and sell activity in real time.
  • Execute quickly: Use CScalp to take advantage of speed.
  • Focus on liquidity: High liquidity is crucial for entering and exiting positions swiftly.
Scalping requires discipline and an ability to act decisively on small price changes.

Swing Trading Techniques

If you prefer a less intense trading schedule, swing trading allows for capturing trends over days or weeks. Swing traders in crypto benefit from:
  • Trend analysis: Identify patterns suggesting upward or downward momentum.
  • Support and resistance levels: Mark these on charts to inform your trade decisions.
  • Patient timing: Allow positions to develop, leveraging market corrections.
Position sizing and patience are key, as swing trading does not require daily portfolio adjustments.

Managing Portfolio and Investments

Understanding the mechanics of margin and leverage, as well as keeping tabs on your profitability and trading costs, are crucial for long-term success.

Understanding Margin and Leverage

Margin in cryptocurrency trading is the capital that you borrow from an exchange or broker to increase the size of your trading position beyond what would be available from your cash balance alone. Using leverage, you can control a larger position, amplifying both gains and losses.
  • Interest: When you trade on margin, remember that you will owe interest on the borrowed funds, which can affect your profitability.
  • Risks: It's important to use leverage cautiously, as it can lead to significant losses, potentially exceeding your initial capital.

Cultivating Mindset and Discipline

To excel in cryptocurrency trading, it's crucial to develop a strong mindset and disciplined approach:
  1. Motivation: Stay driven by setting clear, achievable goals. Remembering your initial motivation will help maintain your focus and drive.
  2. Focus: Given the complexity of the market, it's important to dedicate full attention to analyzing trends and forecasts. This helps in sharpening your strategies.
  3. Discipline: Adherence to your trading plan is key. This includes avoiding impulsive decisions and sticking to pre-set entry and exit strategies.
  4. Consistency: Regularly analyze your trades with a Trading Diary by CScalp to understand which strategies are effective. Maintaining a trading journal and reviewing your trades weekly can aid in this process.
  5. Patience: Success in cryptocurrency trading often requires time. Patience is essential to let your strategies work and wait for the market conditions to align with your plans.
  6. Emotional Control: It's critical to separate emotions from trading decisions. Monitoring your emotional state and taking breaks can help in making rational decisions, especially in a volatile market.
By reinforcing these aspects, you create a strong foundation for navigating the challenges of the cryptocurrency market, leading to potential growth in your trading skills. Remember, consistency in applying these principles is key to long-term success.

Leveraging Economic and Market Insights

Successful active trading in the cryptocurrency markets requires a nuanced understanding of economic and market insights. Your ability to analyze market trends and volatility can be pivotal in making informed decisions.
Market Trends: Be aware of the overall direction in which the cryptocurrency market is moving. Whether you're looking at Bitcoin, Ethereum, or other altcoins, recognizing patterns can give you a competitive edge.
Market Analysis: Utilize technical indicators and chart patterns to study price movements and market sentiment. Also, fundamental analysis helps you understand the intrinsic value of a cryptocurrency by examining related economic, financial, and other qualitative and quantitative factors.
Understanding the Market:
  • Volatility: Cryptocurrency markets are known for their high volatility, which can lead to substantial gains or losses. Understand how to manage risk in these situations by setting Stop-Loss orders or using hedge strategies.
  • Economics: Keep abreast of global economic events that can influence cryptocurrency prices, such as regulatory announcements or technological advancements.
Active Trading vs. Passive Investing:
  • With active trading, you'll need to be well-versed in reading market movements and leverage this knowledge for short-term profits.
  • Although this section doesn't cover passive trading, it's worth noting that it involves less frequent, longer-term buying and holding of market positions as opposed to the fast-paced nature of active trading.

Continuous Learning and Resources

For those looking to deepen their knowledge and refine their trading skills, exploring a variety of educational resources is essential. To stay ahead in this volatile market, consider the following:
  1. Educational Courses: Utilize online courses that cover a wide range of topics in cryptocurrency trading. These courses are beneficial for gaining foundational knowledge as well as advanced trading techniques. Explore our free trading course.
  2. Webinars and Live Streams: Regularly attend webinars and watch live streams from experienced traders and industry experts. You can find this and much more on CScalp's YouTube channel, which can significantly improve your negotiation skills.
  3. Community Engagement: Engage with trading communities for real-time discussions and exchange of strategies. Platforms such as CScalp's Discord channel offer a space for sharing experiences, accessing free trading signals, and obtaining crypto analysis from fellow traders.

How to Become an Active Trader – Conclusion

Navigating the complexities of cryptocurrency trading may seem daunting at first, but it's a journey worth embarking on for those aspiring to become active traders. Trading involves not just the exchange of assets but also the exchange of information, strategies, and experiences. As a trader, you need a clear understanding of the market, a robust trading account, and the right tools at your disposal to make your ventures potentially profitable.
Platforms like CScalp offer a great starting point for those new to the field. Our trading terminal provides the necessary resources and support to gain a foothold in the ever-changing crypto market. Remember, every skilled trader was once a beginner; with dedication, learning, and the right tools, such as those offered by CScalp, you can navigate the complexities of crypto trading and embark on a rewarding trading journey.

Frequently Asked Questions About How to Become an Active Trader

Let's look at the most frequently asked questions about how to become an active trader.

What Initial Steps Are Necessary for a Beginner to Start Active Trading From Home?

To start active trading cryptocurrencies from home, you need a reliable cryptocurrency exchange. Also, ensure you have a secure Internet connection and the free CScalp professional terminal that allows you to swiftly execute trades.

What Are the Key Strategies a New Active Trader Should Learn?

Familiarize yourself with day trading and scalping within the cryptocurrency markets. Focus on learning to identify levels of support and resistance, as well as exploring the CScalp blog for more information on active trading strategies.

What Are the Average Earnings for Day Traders Starting With a $10,000 Account?

Earnings for cryptocurrency day traders with a $10,000 account can vary widely due to market volatility. While some traders may experience significant profits, others may face losses. It's crucial to manage risk effectively and not expect uniform returns.

Can Someone Successfully Day Trade With Just $100, and if So, How?

Day trading with $100 is feasible in the cryptocurrency market due to lower entry barriers and the possibility of fractional trading. Focus on learning with small-scale trades, carefully managing risk, and gradually increasing your stake as you gain more experience. It is possible to start learning crypto scalping with just $10.

What Terminology Should Aspiring Day Traders Become Familiar With?

Familiarize yourself with cryptocurrency-specific terms such as blockchain, decentralization, altcoins, tokens, ICO, wallets, and smart contracts. Also, understand trading terms like volatility, liquidity, leverage, and margin, which are crucial for successful day trading.