Best Crypto Day Trading Strategies

The E-Coin example is why it is important to understand that day trading Bitcoin and other cryptocurrencies will not always go to plan. You have to be able to accept losses when they happen, as this is a part of trading. Even the most successful traders in the world make losses, as it is impossible to always make the correct prediction. Cryptocurrencies are naturally volatile, and what seems the best today or this month can be phased out in a few days or months. A suitable way to determine whether a crypto asset is good for day trading is to analyze its trading volume and liquidity. Like other security markets, including stocks, indices, and Forex, day trading crypto has its challenges.

• While most people use 14-period RSIs, day traders commonly use versions with five or seven periods.
• This trading strategy works more like technical analysis because it involves mainly predicting.
• Day trading is a commonly used trading strategy in stock trading just as well in cryptocurrency.

The systems constantly monitor and analyze cryptocurrencies across multiple exchanges, and identify trends and other trading triggers. Nowadays, many day traders are learning how to profit off small moves in the market and making a profit by taking advantage of the coin price volatility. Range trading capitalizes on sideways markets (or non-trending markets) by pinpointing stable high and low prices, represented on charts as resistance and support levels.

#4. Arbitrage

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. BitDegree Learning Hub aims to uncover, simplify & share Web3 & cryptocurrency education with the – masses. Join millions, easily discover and understand cryptocurrencies, price charts, top crypto exchanges & wallets in one place. If you have read my guide from start to finish, you should now know whether day trading is right for you, as well as how to trade Bitcoin, and how to trade cryptocurrency in general.

The ETH account had a biweekly return of 0.8071% (19.64% annualized). If you look at past performance figures, you will notice they are similar as well. With this method, you look at two moving averages, the 50 MA and 200 MA. These are moving averages over the past 50 and 200 days, respectively. When discussing the best strategies for trading crypto, you will also notice mentions of indicators. Enjoy the highest earning rates in the market with top performing trading strategies.

Day Trading Cryptocurrency: What You Need to Know First

With this strategy, you can end up losing everything or making huge profits. One of the best things about HOLD is that allyou need to do is simply buy digital currencies without setting the take profit or stop-loss. – If and when you decide to trade crypto, start by having strategies, for God’s sake. Manage risk, set the limits on how much you invest in particular cryptocurrency and don’t forget to usestop-loss orders.

• You need to mentally prepare yourself for high fluctuations in cryptocurrency values.
• Taking losses is an inevitable part of trading, so make sure they are well calculated and accounted for as part of your trading plan.
• While these setups are great to know, the fact is that the majority of the time, the market is not in an explosive phase of volatility – instead, a period of accumulation or consolidation.
• Let’s now determine the appropriate place to go buy Bitcoin and what are the technical conditions that need to be satisfied.

Also, there is an additional point you should consider when it comes to trading bots. If someone has built a profitable trading bot, why don’t they just use it instead of selling it? This is why you need to be especially careful when thinking of purchasing a high-frequency trading bot. Support and resistance levels develop on all timeframes, so you’re sure to find a position quickly.

Most Profitable Cryptocurrencies to Mine

Exchange liquidity, asset liquidity, and fees are at the top of a trader’s list when choosing the right platform for them to buy and sell crypto. The volatility of the crypto market means the value of digital assets can oscillate wildly. For traders looking to maximize profits in this market, they need to make moves fast.

• Before you get started with any kind of crypto day trading, make sure you’ve carefully weighed up the pros and cons.
• They typically have similar movements, but if the market is changing, they may not.
• Experts recommend a daily risk maximum of 1% to ensure traders don’t risk more than they can afford to lose.
• Positive news can create buying pressure, while negative news can trigger selling pressure in the crypto market.

If there is an exodus of Bitcoin miners out of a specific country, for example, the price could tank due to miners dumping coins. When the price of bitcoin dips due to downward pressure, the altcoin market tends to fall with it. Volatility is highest in altcoins with small market caps compared to the more popular and well-known cryptocurrencies like bitcoin or ether. However, it’s critical to focus more on risk-reward and less on accuracy when formulating a strategy. Always remember that an average strategy with good risk-reward can make you profitable. The Ichimoku Cloud provides more data points than the traditional candlestick charts.

Crypto Guides

It demands considerable knowledge, experience and discipline to achieve consistent success. To learn more about basic Ezekiel’s method of trading backed by mathematical probability, you can check out his one core program.

• Since Bitcoin is the best cryptocurrency to invest in right now, we advise you to choose Bitcoin day trading.
• Traders with an understanding of software programming and APIs should definitely consider using this to their advantage as a day trader.
• Day trading crypto is a high-risk venture, considering the volatile nature of crypto assets and the liquidity in the cryptocurrency markets.
• Traders have the opportunity to buy and sell without restrictions as the cryptocurrency markets do not close.

In addition, due to the extensive use of leverage, a few bad trades can quickly blow up a trading account. Tally Greenberg, head of business development at Allnodes believes that success as a crypto day trader requires more than reading the charts. “Knowing what the blockchain does, its network size, governance, and protocols will allow you to assess the overall condition of your prospective investment,” Greenberg says. “So, be prepared to learn a lot and follow news on your selected assets’ blockchain updates.” It is important for both beginners and experienced traders to understand and evaluate the risks involved before engaging in day trading.

Technical analysis

However, it’s essential to trade crypto assets with high volume and market cap, as they have better liquidity. The point is to capture a chunk of a potential price move by seeking out volatile assets with lots of movements or sedatives. In either case, swing trading is recognizing where an asset’s price trends are likely to move next, then entering a position and capturing a chunk of profit if that move materializes. But, the majority of the crypto traders using the HODL strategy are investing when the price is very low and take theirprofits once the price increases drastically. Staying informed about the latest news in the cryptocurrency industry is essential. News can provide insights into upcoming events, regulatory changes, partnerships, or technological advancements that may affect the price of a particular cryptocurrency.

• Several techniques are available for day traders to utilize for making profits on short-term price movements in the market.
• The strategy essentially has you look for differences between the RSI indicator and the price.
• Cryptocurrency trading is both risky and rewarding due to its volatility.

Once you’ve chosen a platform for trade and a crypto asset to trade, the next step is to fund your account with an initial investment capital. One common strategy when picking a coin to trade is to invest in the first coins by market capitalization size. However, even there, investors need to tread with caution because even cryptocurrencies in the top can collapse, as happened to the LUNA coin. Day traders should also consider whether their preferred exchange allows them to send their assets off of the platform to crypto wallets of their choice. Another thing to consider is that high-frequency trading is quite an exclusive industry.

The Best Crypto Trading Bot ─ Increase Profits with Automated Trading

If the order is triggered, we prepare to protect our trading position. 2018 will forever remain memorable due to the great crypto bull market. I was clueless about cryptos, preferring to trade stock indices or Gold CFDs. Different sources fed them a diet of news and analysis proclaiming crypto was headed to the moon. Let’s now determine the appropriate place to go buy Bitcoin and what are the technical conditions that need to be satisfied.

• Crypto day trading can be a lucrative, but also a high-risk strategy involving constant purchase and sale of cryptocurrencies in pursuit of short-term profit.
• A successful scalper will be aware of margin requirements and apply proper position sizing rules.
• Now that you know about all of the things that might prevent you from becoming a successful day trader, it is important to remember that this isn’t the only option.

To initiate, you buy a call and put option at the same time for the same strike price and expiration date. The Bitcoin straddle is profitable when Bitcoin falls or rises away from the strike price by more than your premium. Crypto is a new class of digital assets, and investors should always consider the possibility that their crypto investments are capable of evaporating. The rise of bot trading has democratized the crypto market by providing users with automated trading capabilities. These bots can react swiftly to market changes, execute complex strategies, and utilise technical indicators to make informed trading decisions. For instance, they are frequent in Elliott Wave theory and Gartley patterns.

Introducing Short-Term Strategies and Day-Trading

As you have probably noticed, there are a lot of steps to consider before you begin your trading career. In reality, it will take a really long time before you are able to trade successfully as if you do things correctly, you will need to build things up slowly. There is a really good beginner’s guide at CryptoPotatoe, which shows you how to read charts and then how to analyze pricing trends.

• Once you are set up and you have deposited some funds, take some time to understand the different features on the trading screen.
• Things like chart patterns, price action, volumes, and other indicators can help traders identify entry and exit opportunities and make investment decisions while day trading crypto.
• Pullback trades are common in crypto futures markets as there’s often a trading pair experiencing a trend day and increased volatility.
• The fees to make a trade on an exchange may wipe out the gains from the trading spread.
• Day trading cryptocurrency requires specific skills and knowledge to navigate the unique challenges of this market.

It’s important to research and understand each strategy before implementing it in your own trading. Exponential moving averages are particularly popular for shorter time frames, making them perfect for crypto day traders. This is because they weigh recent data more heavily than older data, so they respond to changes more quickly.

What’s the Earning Potential Statistically?

For prospective day traders, certain websites allow users to track and copy the most successful traders on the platform. Below are some of the most popular trading strategies in the crypto day trading game. There are many techniques day traders use to make gains on short-term fluctuations in the crypto markets.

• You will likely be trading higher than usual leverage, and it’s a good idea to get in and out as soon as practicable.
• Early positions offer the greatest reward with minimum risk, while ageing trends should be avoided by all means.
• Originally used in traditional stock markets where trading was limited to business hours, day trading has now extended to cryptocurrency markets that operate round the clock.

To help avoid unnecessary stop-outs, you can set a slightly looser stop and adjust your risk tolerance accordingly. By now, you should have drawn out your channel and be ready to short tops and long bottoms. This trading style can be profitable but also carries significant risk and requires knowledge, experience and discipline to become consistently profitable.