Day Trading for Investors: Balancing Long-Term and Short-Term Gains

Day Trading for Investors Balancing Long-Term and Short-Term Gains

Key Takeaways

  • Day trading is a high-risk, high-reward method which combines the prospect of significant gains with the risk of major losses

  • Long-term investing is less fraught with risk and requires less monitoring, however the potential for lucrative gains is also lower

  • Deciding to trade via a crypto trading prop firm can help traders reap the most out of short and long-term investments

In this article, we take a look at the pros and cons of both day trading and long-term crypto investing, while also considering the merits of using a prop trading firm to maximize returns.

There’s more than one way to skin a cat, and more than one way to generate gains from the constant price fluctuations in the cryptocurrency market.

But whether one opts for the quick, short-term gains of the day trader, or the more patient, slower returns of the long-term investor, it’s still possible to balance the excitement of day trading with the stability and long-term growth of traditional investing.

Day trading refers to the process of making multiple quick trades throughout the trading day, leaving no positions open by the time you log off. Crypto traders engaged in day trading often rely on advanced trading tools to make rapid decisions.

Long-term investing involves buying an asset and holding it for a longer period, perhaps a matter of weeks, months, or even years. This approach suits traders operating with a lower risk tolerance and those seeking to mitigate the impacts of market volatility.

Traders can benefit from finding a personal balance between the two that aligns with individual financial goals, risk tolerance levels, and lifestyle. Prop trading firms offer a unique advantage by providing capital and access to a diverse range of trading instruments, which can be especially beneficial for those looking to explore both day trading and long-term investing.

Let’s take a look at these two different investing styles, and explore how both can be balanced to maximize gains, mitigate risk, and minimize loss. Using a crypto prop trading firm can help in this endeavor, as these firms provide the necessary support, trading platforms, and risk management strategies to navigate the crypto market effectively. This blend of resources and strategies can lead to a successful trading career, allowing traders to capitalize on both short-term and long-term market opportunities while adhering to proper risk management protocols.

The Pros and Cons of Day Trading


Day trading provides the opportunity for multiple fast trades, which can reap significant gains in a very short time frame – typically no longer than a single trading day. Because day traders operate on such short time frames, they have the ability to unearth and capitalize on numerous market movements throughout the day.

This rapid trading strategy allows crypto traders to take advantage of market volatility and leverage advanced trading tools to make quick decisions. Even day traders who begin with relatively low starting capital can generate significant gains by engaging with the crypto market repeatedly in a single trading window.

Moreover, traders operating with a focus on day trading can utilize various trading platforms that offer real-time data and analytics, enhancing their ability to make informed trades. The best prop trading firms provide access to a diverse range of financial instruments, enabling traders to explore different asset classes and trading instruments, thus maximizing their potential.


Day trading is a high-risk, high-reward method that combines the possibility of significant gains with the potential for major losses. Because day traders operate on such short time frames, they need to constantly monitor trading setups, chart data, and market news.

This intense scrutiny means day traders can’t afford to be distracted for even short periods, as they might miss opportunities to make a gain or avoid a loss. The crypto proprietary trading environment can be particularly challenging due to the high volatility and rapid price movements in the cryptocurrency market.

Depending on the trading platform used by the day trader, they may lose a sizable portion of their earnings to transaction fees as more and more trades are executed throughout the day. This can significantly impact their gains, especially if they are not using a crypto prop trading firm that offers competitive trading fees and optimal market liquidity.

Additionally, the need for proper risk management is crucial in day trading. Without implementing effective risk management strategies, traders can quickly find themselves on the losing side of trades, facing substantial financial losses.

Overall, while day trading offers the allure of quick wins, it requires a high level of trading proficiency, constant vigilance, and a robust risk management framework to navigate the complex and fast-paced world of cryptocurrency trading effectively.

The Pros and Cons of Long-Term Investing


Long-term investing involves purchasing assets and holding them over an extended period, often spanning weeks, months, or even years. This strategy is typically considered lower risk compared to day trading, making it attractive to those looking for stability in the cryptocurrency market.

One significant advantage of long-term investing is the potential for compound growth. As the value of the crypto market appreciates, returns on investments can grow exponentially due to the compounding effect.

Additionally, long-term investing incurs much lower transaction costs because fewer trades are executed, saving on trading fees. This approach also requires less frequent monitoring compared to the high-frequency trades of day trading, making it suitable for those who prefer a more hands-off investment strategy.

Another benefit of long-term investing is its resilience to short-term market volatility. Since the investment horizon is extended, temporary price fluctuations have less impact on the overall performance of the investment. This allows investors to focus on the long-term potential of their chosen financial instruments and reduces the stress associated with frequent market movements.

Crypto proprietary trading firms often recommend long-term investing for building a robust portfolio with a lower risk profile. The use of proper risk management strategies is also essential in long-term investing to safeguard against market downturns.


However, long-term investing comes with its own set of challenges. It demands patience, which may not suit those seeking quick gains. The lower risk associated with long-term investing often means lower potential for extravagant returns compared to the high-reward nature of day trading. Investors must be willing to wait for their investments to mature, which can be challenging in a fast-paced market like cryptocurrency trading.

Moreover, the perceived stability of long-term investing can lead investors to commit significant funds to their trades. While this can enhance returns during periods of market growth, it also increases the risk of substantial losses if sudden short-term market movements occur.

A drastic decline in the cryptocurrency market can wipe out a large portion of the investment, highlighting the importance of risk management. Proper risk management techniques, such as diversification and the use of stop-loss orders, are crucial even in long-term investing to protect against significant losses.

Ultimately, both long-term investing and day trading have their unique sets of risks and rewards. Choosing the right strategy depends on the investor’s financial goals, risk tolerance, and ability to manage their investments effectively.

By understanding the pros and cons of each approach, investors can make informed decisions that align with their trading strategies and overall investment objectives. Using a combination of these strategies, supported by advanced trading tools and the resources provided by crypto proprietary trading firms, can help investors navigate the complexities of the cryptocurrency market and achieve their financial goals.

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Balancing Long-Term and Short-Term Gains at Crypto Prop Trading Firms

Mixing up their trading strategies helps traders reap the benefits of both trading methods while mitigating the worst of the risks. Diversifying between long-term and short-term trades can help traders cover potential losses and reduce the risk incurred in some of their bolder trading setups. Crypto proprietary trading firms provide a structured environment for this kind of diversified approach, offering access to advanced trading tools and a diverse range of financial instruments.

Allocating Investment Capital Based on Risk Tolerance

Depending on the trader’s personality and risk tolerance, they may choose to allocate a specific portion of their investment capital to either day trading or long-term investing. For instance, a trader with a higher risk tolerance might dedicate a larger share of their trading account to high-frequency crypto trading, capitalizing on the volatile nature of the cryptocurrency market. Conversely, a more risk-averse trader might prefer to invest a significant portion of their capital in long-term positions, benefiting from the compound growth and reduced market volatility over time.

Keeping the majority of one’s capital for long-term investments can enable traders to take larger risks day trading with a smaller portion of their capital. This balanced approach allows traders to benefit from the stability and growth potential of long-term investing while still taking advantage of short-term market opportunities through day trading. Crypto prop trading firms facilitate this by providing the necessary market liquidity and access to a variety of trading platforms tailored for both long-term and short-term strategies.

Implementing Effective Risk Management Techniques

Another simple key to balancing wins and losses comes in the form of basic risk management techniques like using stop-loss orders and calculating optimal position sizes. Proper risk management is crucial in both day trading and long-term investing to protect against significant losses. Crypto traders should employ strategies such as setting take profit orders, adhering to trading rules, and continuously monitoring their positions to ensure they are aligned with their overall trading goals.

By leveraging the resources and support of crypto proprietary trading firms, traders can enhance their trading proficiency and develop a well-rounded trading strategy. These firms often provide educational resources and ongoing support to help traders refine their trading styles and achieve long-term success in the competitive realm of cryptocurrency trading. Proper risk management, coupled with a diversified trading strategy, enables traders to navigate the complexities of the cryptocurrency market effectively and maximize their success over time.

Practical Considerations: Using a Crypto Proprietary Trading Firm

“Prop” (or proprietary) trading has surged in popularity recently, largely due to its ability to expose traders to the full breadth of the cryptocurrency market while significantly reducing risk. Crypto proprietary trading firms provide traders with starting capital, often up to $200,000, allowing them to explore various trading strategies without risking their own capital.

Top crypto proprietary trading firms do not impose minimum or maximum daily trade limits, offering traders the flexibility to engage in both day trading and long-term investing. This unrestricted environment is ideal for crypto traders looking to diversify their trading styles and develop a range of strategies. Advanced trading tools provided by these firms enhance market proficiency and trade execution.

Sourcing liquidity from Tier-1 centralized exchanges, the best crypto prop trading firms offer access to a broad array of trading products, including perpetual future contracts and leveraged trades. This access enables traders to take advantage of diverse market opportunities and employ various trading strategies. Robust trading platforms support complex trades and effective risk management.

These firms also provide comprehensive risk management frameworks to mitigate potential losses. With extensive educational resources, traders can improve their trading skills and better understand the cryptocurrency market. Utilizing these resources allows traders to refine their strategies and achieve higher trading proficiency.

Using a prop firm crypto trading allows traders to maximize their potential in the cryptocurrency market while minimizing risk. With significant starting capital, advanced trading tools, and access to a wide range of financial instruments, traders can effectively develop and execute their strategies, ensuring they are well-equipped to navigate the complexities of the market and achieve long-term success.

Conclusion: Crypto Proprietary Trading Firms

Long-term investing and day trading represent two vastly different approaches to tackling financial markets, each with its own unique set of risks and rewards. Day trading is a fast-paced, high-pressure endeavor where rapid market movements can define success or failure in a matter of minutes. In contrast, long-term investing allows for deeper research over a longer period and provides more opportunities for early exits or further investments.

Balancing the two is key to mitigating risk. By diversifying between long-term and short-term trades, traders can capitalize on the benefits of both strategies while minimizing potential losses. A strategic allocation of investment capital, tailored to individual risk tolerance and trading styles, is essential.

Partnering with crypto proprietary trading firms can significantly enhance this balancing act. These firms offer access to advanced trading tools and a diverse range of financial instruments, enabling effective execution of both day trading and long-term investment strategies. They also provide robust risk management strategies and substantial starting capital, allowing traders to implement varied strategies without risking personal funds.

Utilizing the resources and support from crypto proprietary trading firms helps traders maximize their potential in the cryptocurrency market. By combining the rapid gains of day trading with the stability of long-term investing, traders can achieve a balanced, profitable trading career while effectively managing risk.



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