Day Trading Cryptocurrency: Crypto Trading Strategies 101

This amplifies potential profits, but also increases the risk of losses. It is important for day traders to have a clear understanding of how leverage works and to manage their risk carefully. Day trading is a trading strategy that involves buying and selling financial instruments, such as stocks, currencies, or crypto currencies, within the same day. The goal is to take advantage of price fluctuations and make profits from short-term market movements. Day traders aim to capture small, quick gains by entering and exiting trades within a single trading session. Would you like to learn day trading cryptocurrency and make $500 a day trading cryptocurrency?

• Professional traders recommend that you stick to logic and have a strategy instead of trading emotionally.
• A suitable way to determine whether a crypto asset is good for day trading is to analyze its trading volume and liquidity.
• Not only is the platform is regulated in six different jurisdictions but is planning to become a public stock later this year.
• Day trading can be a highly profitable strategy, but there are a few things to consider before starting.
• An advanced charting interface, trade history view, and trading on multiple exchanges via one terminal, including on mobile, are among its free features.

With an effective trading strategy, you can be on your way to crypto riches in no time! But you first need to understand in-depth how to day trade crypto so you don’t make unnecessary losses. One of the most interesting DEXes for crypto day traders is GMX, a decentralized crypto derivatives exchange that offers up to 50x leverage.

Best Crypto Day Trading Platforms Reviewed

“One common crypto strategy is to invest in the top 15 to 20 coins by market cap. But even here, I would tread with caution,” Greenberg adds. However, the limited scope of these resources prevents them from competing directly with institutional day traders. – currency offers an exciting opportunity to profit from the dynamic and volatile nature of the crypto market. However, success in day trading requires a combination of knowledge, skill, discipline, and proper risk management.

• In day trading, multiple trades are often made daily, which can increase transaction costs and have tax implications.
• Although this is often seen as a downside, it is a benefit in day trading, as, without it, there is scarcely any way to make reliable profits.
• Experts recommend a daily risk maximum of 1% to ensure traders don’t risk more than they can afford to lose.
• Trading strategies and risk tolerance should be considered when selecting stop-loss levels, which are often placed below technical support levels.
• Most day traders work from home for starters and don’t have tough bosses telling them what to do at all times.

The key to preventing substantial losses in cryptocurrency day trading is to avoid over-leveraging and manage margins responsibly. If prices move against your position, excessive leverage can lead to margin calls and liquidation. Among the traditional markets, including the forex and stock markets, day trading is one of the most popular trading styles.

How Does a Day Trader Get Started?

The best crypto exchange for day trading is eToro as you can trade 100% commission-free and access its state of the art platform for copy trading crypto strategies. For example, eToro is the world’s largest copy trading platform with more than 20 million users. From this platform, you can search the performance of different traders using filters such as risk management and markets traded. There is now a completely new way of trading the market that is taking the financial world by storm and exponentially increasing in popularity.

• This amount of money will give you enough room to buy and sell without incurring too much in fees and ensure good money management strategies.
• 74% of retail investor accounts lose money when trading CFDs with this provider.
• As such, the bottom confine of a price range will possibly shove the price action upwards, and the top confine will press the price action downwards.

Market behaviour and price action around support and resistance zones are crucial to understand and recognize. Trades will come around less often, but a slightly higher timeframe is a good starting point for feeling out the pullback trade and will allow you more time to plan your entries. Trade setups are frequent, especially on lower time frames, so you’ll – never be on the sidelines long when trading pullbacks. Identifying setups is relatively simple when using the 3 EMAs – which also help with stop-loss positioning and precision executions. If you want an even more precise placement, draw out a trend line that touches the swing candles’ top or bottom, depending on whether it’s a long or short trade.

Capital.com – Best Day Trading Crypto Platform for Newbies

Additionally, premium features include 24/7 alerts and integrations with platforms like Google Sheets and Zapier. Bybit sets itself apart by focusing on perpetual futures contracts, similar to traditional futures contracts but without an expiry date. Notably, Bybit offers leverage of up to 100x on these perpetual contracts. Traders can trade a variety of pairs on the spot market with margins of up to 10x. Binance also offers margined futures trading for numerous cryptocurrencies with leverage up to 20x.

• EToro is the world’s largest social trading and copy trading platform.
• You need to be able to control your emotions at all times while trading.
• Volume is likely relatively low as traders wait for trend confirmation before entering with size.
• BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency.

You can find all of the popular cryptos such as Bitcoin, Ethereum, Ripple, Litecoin, and EOS as well as many others. There are several known and tested day trading strategies out there — let’s take a look at some of them. A great crypto for day trading, Cardano is highly volatile and boasts high upside potential. ADA is often compared to Ethereum, but Cardano is actually more scalable and faster. Additionally, Cardano has a strong community behind it that is constantly working on improvements, thus ensuring there will be interest in this crypto. Ethereum has a really wide price range, which means that there will be plenty of opportunities to buy low and sell high.

Bitcoin vs Ethereum: Differences and Which Should You Buy

Day trading can also be quite risky and requires a solid understanding of the market. Naturally, it will also require you to look at screens for extended periods. Technology stocks were leading the broader market higher in early Monday trading as traders braced for a busy week ahead. Obviously, the merits of ISI as an investment have nothing to do with the day trader’s actions. Day traders also like stocks that are highly liquid because that gives them the chance to change their position without altering the price of the stock. If the price moves down, a trader may decide to sell short so they can profit when it falls.

• To help avoid unnecessary stop-outs, you can set a slightly looser stop and adjust your risk tolerance accordingly.
• First, select from a buy or sell order and enter your stake in US dollars.
• Day traders use any of a number of strategies, including swing trading, arbitrage, and trading news.
• The frequency in question is routinely on the order of dozens of trades per second—far beyond the capability of a human trader.

In the crypto markets, the same factors have a dramatic impact (or none at all) on certain crypto assets. The first choice isn’t always the best choice when figuring out where to conduct crypto trading. For immediate edge is it legit budding crypto day traders, the options and differences between the many crypto exchanges can be overwhelming. Recently, the crypto markets have become an increasingly popular destination for day traders.

Using candlestick patterns for entry and exit signals

Remember that trading courses that are more catered to stocks or Forex also work well with crypto since the basics are the same regarding technical analysis. Volatility is most prevalent in micro coins, or coins with small market caps compared to other cryptos. Right now, any coin with a market cap lower than $1 billion is considered small cap. Some small-cap coins with good trading volume include SiaCoin (SIA), Basic Attention Token (BAT) and Fusion (FSN). The Chicago Mercantile Exchange (CME) offers options on Bitcoin futures, opening up a wealth of volatility strategies for traders. Volatility trades are ideally directionless, meaning there is a possibility of making money whether Bitcoin goes up or down.

• This allows you to trade with industry-leading spreads alongside a small commission.
• If you’re not day trading Bitcoin, which is the most liquid coin out there, and you like the altcoins, try to pick those coins that have good liquidity and volatility.
• We use this indicator to track the activity of smart money and to gauge when the institutions are buying and selling cryptocurrencies.
• How much you need will depend on the coins you’re trading and the exchanges you’re using.
• If orders are getting filled as usual and the order flow remains steady, you can start to add small size, set your stop loss and wait for a rejection to occur before pulling the trigger.

Day trading requires a lot of preparatory work, but once you figure everything out, it might help you to gain considerable profit. However, before starting day trading, don’t forget to do your own research. Remember, trading – is a risky business, no matter how professional the trader is. Trading bots are in their infancy and currently cannot be adapted to highly volatile crypto market conditions. They can be hacked or they might collect your data and unintentionally (or not) send it to a third party. Essentially, a trading bot is a kind of software programmed to analyze cryptocurrency market trading data.

Practicing discipline and patience in your trading decisions

Day trading can be a great way to make money, but only if you’re careful and know what you’re doing. With a little research and practice, you can learn how to day trade bitcoin like a pro. Day trading Bitcoin can be a great way to make money, but it’s important to know how many times you can trade in a day. In brief, there is no limit on how many times you can trade crypto in a day, it depends on your account and the exchange. Basically, you might be able to trade as many times as you want and 24/7. Each one of these will have its advantages or disadvantages and we don’t recommend one over the other.

The Bear Bull Traders crypto day trading course was founded by Andrew Aziz, a successful trader himself. The program boasts varied levels of trading ranging from basic ($99 monthly) to elite ($199 monthly). It has the strongest liquidity, low fees, as well as a large selection of listed cryptocurrencies. Let’s be frank — decentralized exchanges currently aren’t efficient enough to suit the needs of very serious day traders. However, advances in blockchain scalability are happening constantly, and decentralized exchanges are slowly becoming more and more competitive with their centralized counterparts. You should stick to your trading plan if you want to avoid trading FOMO.

What is the cheapest platform for day trading crypto?

Unless you are experienced in this type of trading environment, you might want to stay within a crypto simulator until you feel confident in your strategy. As a crypto day trader, you can avoid big losses by trading within your limits. While you need to risk making a profit, you should know how much you could risk and never invest more capital than you can afford to lose. Experts recommend a daily risk maximum of 1% to ensure traders don’t risk more than they can afford to lose. Too much trading and changing ideas quickly are likely to cause unnecessary losses.

This trading style can be profitable but also carries significant risk and requires knowledge, experience and discipline to become consistently profitable. Another important oscillator that technical analysts use in crypto is the Money Flow Index (MFI). The MFI can be used in addition with the RSI to check whether the price of BTC is trending towards a bullish or bearish divergence. The big event of the week will be the release of the consumer-price index for August on Wednesday. The inflation reading will inform the Federal Reserve’s next moves on inflation.

OKX – One of the best exchanges for crypto day traders

Regardless of the day trading strategy they pick, investors also need to watch out for regional differences in rules and taxes regarding crypto assets. The precise entry and exit timing in this fast-paced environment can decide profit or loss. For traders to identify the best timing for their trades, various factors must be considered, including market volatility, news events, and technical indicators. Ensure the safety of your assets with robust security measures provided by a reputable exchange.

• Crypto day trading can be a great way to grow your crypto portfolio and it’s a very lucrative alternative to the holding mentality that it’s crippling the crypto community.
• The RSI may indicate a buying opportunity for a fundamentally strong project if it shows oversold conditions.
• In addition, you may need to trade smaller positions when dealing with more volatile cryptocurrencies.
• First and foremost, when day trading, it’s essential to have a structured approach and a rule-based strategy.

This will allow you to see your position and profit margin at all times, which is important for a confident trading mindset. Support and resistance levels are often volatile, as some traders are looking to play a breakout while others are fading the move back into the zone. Sometimes it’s best to have a looser stop and lower leverage to avoid wick outs.