Crypto day trading encompasses buying and selling cryptocurrencies within a single trading day. It’s crucial to adeptly navigate intraday price fluctuations and be strategically positioned to seize potential profit-making opportunities. Unlike longer-term trading, day traders typically work with larger trade sizes, given the smaller expected price movements, and they do not have overnight holdings. At the time of writing, it was within the day trading platform top 60 cryptocurrencies by market capitalization on CMC, which ensures at least a baseline level of liquidity. A big crypto asset like this is also more likely to be listed on various crypto day trading platforms, which allows traders to use advanced trading strategies like arbitrage. It is important to note that day trading has been borrowed from the traditional financial markets, and the same principles apply to bitcoin day trading.

Some people prefer the long-hold approach, while others choose to secure profits quickly. HFT is highly efficient and can be incredibly profitable, but it is too resource-intensive for most people. Any investor should research multiple viewpoints and be familiar with all local regulations before committing to an investment. Website personnel and the author of this article may have holdings in the above-mentioned cryptocurrencies. The golden rule of trading is –  trade an amount of funds you are not afraid to lose. The asset is available on PanakeSwap right now, and investors should definitely keep an eye out for it.

day trading crypto

This is because cryptocurrencies are highly volatile, meaning their prices change constantly. Nevertheless, here are some incredibly reliable day trading crypto strategies used by traders. DOGE is also great for day traders because it rides more on fundamental news than technicals. So, for investors who might not know much about technical analysis just yet, the asset offers a great way to trade and make money. Remember to only risk a very small proportion of your capital on Dogecoin because of its volatility.

First of all, it’s important to understand that day trading requires you to take advantage of short-term price movements in the market. This means that you’ll need to have a strong understanding of technical analysis in order to be successful. 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. It provides a robust trading platform with advanced charting features, high liquidity, and a vast selection of cryptocurrencies to trade. The sophisticated interface caters to both beginner and experienced traders, offering features like spot trading, futures, and options. It’s also globally accessible with low fees, making it a popular choice for day traders.

day trading crypto

When market confidence persisted, the price of Bitcoin Cash also surged. The robust performance of American stocks served as an example of the increase. The S&P 500 and Dow Jones both experienced gains of more than 1%, but the Nasdaq 100 index saw a leap of more than 1.10%. Cryptocurrencies have historically performed well on rising stock prices. HFT is a technique that expands on scalping but requires specialised tools.

How much you need will depend on the coins you’re trading and the exchanges you’re using. The first step when looking at how to day trade cryptocurrency will require you to find a good exchange. A cryptocurrency exchange will allow you to buy and sell coins 24 hours per day.

Due to the many trading opportunities, most beginner traders might find themselves trading everything could result in making very wrong decisions. It would be helpful if you put your emotions aside and stick to a plan. Scalpers need a massive amount of capital to earn returns because the gains from this strategy are usually very small. His background in software development helped open the door to the world of decentralised technologies, financial markets and technical writing.

If you are looking to day trade full time, then it is well worth choosing an exchange that has lots of difference pairings listed. You can also do a “limit sell order”, which means that your trade can be automatically closed when your coin hits a certain higher price. If we used the above Ethereum example, you could set a 10% limit sell order, which would mean that if the price reached $770, the system would automatically close your trade. For example, if you bought Ethereum at a price of $700, you could set yourself a stop loss of 10%. This means that if the price of Ethereum went down to $630, the system would automatically sell your investment. This protects from you a sudden decline in price, or if you were not at your computer to do it yourself.

You will also learn about typical pitfalls to avoid, as well as tips and practices that might assist you in achieving success while trading cryptocurrencies. It requires a different set of tools and discipline in order to profit off of short-term moves. If you haven’t already, check out our post with some thought-provoking questions on whether or not you have what it takes to be successful at day trading. If you are willing to practice in a simulator and have the patience to wait for the right opportunity to make a move, then it’s possible to day trade crypto and make some pretty good money.

day trading crypto

The main idea is that when day trading, you look for opportunities to make a quick profit. If you are planning on holding on to a cryptocurrency for longer, this is called long-term trading. When people talk about trading, they are referring to buying and selling an asset with the aim of making a profit. For example, in real-world stock exchanges, people trade all kinds of things.

  • That said, there are some basic hallmarks of a good crypto day trading strategy.
  • Placing a stop loss for a fade trade is difficult, as there is no clear position like a range high or a key support level.
  • One of YouHodler’s most significant features is its Multi HODL tool, a function not available on any other cryptocurrency trading platform.
  • According to Greenberg, a technical understanding of the technology and team behind an altcoin project gives traders a competitive edge.
  • If you’ve got previous trading experience under your belt, read on for a closer look at some common crypto day trading strategies and the risks to get across before you begin.

Furthermore, by staying attuned to news and monitoring social media chatter, they can gauge shifts in sentiment that might precede significant price moves. Arbitrage involves taking advantage of the difference in price on two different exchanges. This is risky and requires that you can transact fast enough before the price gap is eliminated. If you instead wish to generate an income passively, you can use crypto bots for high-frequency or range trading. This can simplify the trading process, where the bot takes care of executing all trades and shifting your capital between profitable investments. As mentioned above, there are many considerations when creating a trading strategy.

But like any trading endeavor, it requires that you treat it like a business and manage your risk properly. For this reason, it’s always a good idea to do your research and practice with a demo account before putting any real money on the line. 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.

It requires a good understanding of candlestick charts, support and resistance levels, and may involve momentum indicators such as the RSI or MACD. The idea of range trading is based on the assumption that the edges of the range will hold as support and resistance until the range is broken. This means that the lower edge of the range will likely push the price up, while the upper edge of the range will likely push the price down. Crypto is a new class of digital assets, and investors should always consider the possibility that their crypto investments are capable of evaporating. Volatility is highest in altcoins with small market caps compared to the more popular and well-known cryptocurrencies like bitcoin or ether. The recent rally in cryptocurrency prices was primarily driven by optimism about the Securities and Exchange Commission (SEC) potentially approving a Bitcoin ETF.