Crypto Day Trading, Strategies for crypto day trading, Things to Avoid while Crypto Day Trading, Things to remember for Crypto Day Trading. Crypto Day Trading is a quick-turnaround trading method. It involves trading in cryptocurrency on the same day. A Day trader can make a profit from the volatility of the coin price.
To make profitable decisions in day trading, one needs to understand the crypto world’s technicality, which includes keeping an eye on all crypto updates and price fluctuation and following some day trading strategies.
Best Crypto Exchanges for Crypto Day Trading
|Exchanges||Best For||Trading Fee|
|Coinbase||Altcoins and Stable coins||0.20%|
|Binance||Relatively unknown altcoins||0.20%|
|Kraken||Altcoins and Stable coins||0-0.26%|
|FTX||Advanced crypto market trading||0.10%|
|Gemini||Cryptocurrencies||1.49% Gemini charges on trades over $200|
|Capital||Best overall with no trading commissions.||0%|
|Crypto.com||Buy altcoins and another new crypto||0.4%|
|Tickmill||Low Deposit Requirement||0.0020% notional|
Strategies to follow for Crypto Day Trading
1. Range Trading
Range trading takes advantage of non-trending markets by spotting steady high and low prices, which are shown as resistance and support levels on candlestick charts. Support is a price below the current price, and “Resistance” is a price above it. Traders can buy at the support level and sell at the resistance level when the price fluctuates between these two levels.
To profit, day traders who employ this method purchase a cryptocurrency asset when it is oversold and sell it when it is overbought.
Day traders employ scalping techniques to accumulate a large number of smaller wins rather than huge ones. Scalping is the trading method with the quickest turn-around because scalpers employ a lot of liquidity to profit from modest price fluctuations over a short period of time.
Ideally, scalpers seek to close out a position before any breaking news or momentary volatility has a chance to alter the perception of a coin in the market.
Pionex is a platform that enables you to automate your cryptocurrency investments by using bespoke trading bots. You have the option of trading manually, but there are 18 bots available that can handle everything for you. The list of trading bots includes:
- Users of the Grid Trading Bot are able to purchase cheap and sell high within a certain price range.
- Up to 5x leverage is offered by the leveraged grid bot.
- Retail investors may generate passive income with no risk thanks to the Spot-Futures Arbitrage bot. This strategy’s anticipated return is 15% to 50% APR.
- Martingale bot does DCA buy and one-time sale to profit from volatility.
- You can hoard coins with the aid of a rebalancing bot.
- To counteract the consequences of volatility, the Dollar-Cost Averaging (DCA) Bot sets up repeated purchases at regular intervals.
4. IFC Markets
IFC Markets provides you with a number of investing alternatives, giving you the choice you need to create your portfolio. To be more precise, there are numerous ways to trade CFDs on the website, including: More than 600 financial products, Low spreads, No hidden commissions, and Instant order execution.
One of the finest day trading tactics for cryptocurrencies is arbitrage, which entails purchasing a coin on one exchange and earning money by selling it on another at a higher price. Day traders can benefit from price discrepancies between the two marketplaces when the price of a crypto pair, such as Bitcoin and a lesser-known altcoin, fluctuates across exchanges. Arbitrage is not a straightforward financial tool, but it can be automated using cryptocurrency tax software.
6. High-Frequency Trading (HFT)
Quantitative traders that create algorithms and employ trading bots to swiftly join and exit a crypto asset over a brief period of time are known as HFT practitioners. To profit from market fluctuations that happen in milliseconds or less, high-frequency traders employ computers that have been programmed to run complex algorithms. The programmes continuously track and examine digital currencies on various exchanges, and they spot patterns and other trading triggers.
This tactic is best suited for experienced traders as creating such bots involves a solid foundation in computer science, mathematics, and a grasp of intricate market principles.
7. Technical Analysis
Technical analysis is a tactic that uses market data to forecast the future price movement of a securities currency. Technical analysts may use previous trade data to apply their statistical trading approach to any financial market, forecasting future cryptocurrency profits or losses based on past performance. Day traders may identify short-term trading patterns and trends using technical analysis, which gives them the ability to uncover opportunities to trade and generate money.
Things to remember for Crypto Day Trading
- To gain profit, buy a cryptocurrency first that is expected to increase over the next few hours. Then, sell it later. Although it seems short and simple, trading cryptocurrencies is risky. So in-depth knowledge, self-discipline, and tried-and-true trading methods are unavoidably necessary for successful crypto day trading.
- Choose a trading platform your country supports and meets your daily trading requirements like trading fees and the number of cryptos.
- However, the entire process of buying a cryptocurrency takes not more than 5 minutes. Purchasing the right coin at the right time demands lots of research beforehand, which includes understanding the charts and knowing when the market is going up or down.
- To succeed in day tr adding, one must follow strategies.
Things to Avoid while Crypto Day Trading
- If you jump the crowd and invest without research, Not following discipline and strategies won’t result in positive returns.
- Overtrading and jumping from one crypto to another can result in losses.
- Never trade the amount you can’t afford to lose. A day trader should never apply more than 1% of capital in a single trade.
As the continues day trading in hopes of making a profit can be lucrative but highly risky too. So, it is a must to be prepared to accept losses irrespective of your strategy in a volatile market like cryptocurrency. And before entering trading, one must be ready with an exit plan.