Day Trading Strategies in Cryptocurrency

Day Trading Guide

Immersed in the world of finance, one has probably tried to trade cryptocurrency at least once. Cryptocurrency day trading is different from the one provided by a traditional stock market. What does a trader need to start day trading? Does day trading suit crypto beginners? How to day trade? Let’s try to figure it all out. 

Before You Start Your Day Trade

Before you finally get into day trading, be sure you are familiar with basic trading definitions like order, order book, spread, and so on. It is important to understand what goals you want to achieve while day trading. Is it going to be your additional part-time job? Or, perhaps, a full-time job? Or do you treat day trading as a hobby? How much money are you ready to lose? Once you’ve got answers, we are ready to provide you with the next steps. 

The next step is to choose a reliable crypto exchange. The exchange should be secure, fault-tolerance, and have to provide a wide variety of digital assets for trading to be smooth and rich. These characteristics suit such cryptocurrency exchanges as Binance, Huobi, HitBTC, and many others. Unlike the regular stock market, the crypto industry never sleeps so that crypto exchanges work 24/7. 


Instant crypto exchange Changelly provides access to over 150 cryptocurrencies. Buy BTC, ETH and hundred of digital assets with USD, EUR, GBP. Credit cards accepted.


To deposit funds, you have to obtain a secure crypto wallet. Besides being safe, the wallet has to support different coins and tokens of various standards (ERC-20, ERC-721, etc.) A good wallet implies high-level security features, intuitive UX/UI, availability, and a lot of other characteristics. A crypto wallet should be chosen as wisely as a crypto exchange. Find the one that suits your needs and let’s get started. 

What Is Day Trading? 

Day trading is a type of short-term trading aimed to bring quick profit in a short period of time. As the opposite of day trading, there is long-term trading which implies such a strategy as hodling. Pretty much every cryptocurrency can be traded in short and long positions if you know how to ‘read’ the market. However, some coins seem to be created as a long-term investment whereas other cryptocurrencies perfectly work for day trading.  

cryptoexchange

To obtain maximum profit when day trading, a trader has to stay informed on the slightest market movements and cryptocurrency news, know how to use trading instruments and be able to open or close positions in time. 

The cryptocurrency market is volatile. It takes lots of effort to predict the rate of certain crypto even for the next 10 minutes. If you can read charts and market signals, there is no guarantee that your prediction is correct. Like any other type of trading, day trading may bring you either considerable profit or loss. And once you start trading, you have to keep this fact in mind. 

Day Trading Tips & Tricks

The following tips & tricks perfectly suit crypto day trading beginners.  The main goal of any trader is to make a profit and reduce the number of losses. You can’t make an omelet without breaking eggs. The sooner you accept the fact that there will be losses, the better. Losses are part of the game, so just go with it and keep moving forward. 

Due to the volatile nature of the crypto market, it is highly recommended to wait once the crypto market meets a relatively stable state (especially if you are a beginner at crypto trading).

To protect yourself from great losses, choose the right order. Decide on the maximum price you expect to lose and set up a stop-loss order. 

A stop-loss is a trading order that allows you to set up a price that once reached will execute the trade. 

Example: You buy 1 ETH at $140, but the market tends to go down. You decide to set up a stop-loss order at $130. Once ETH reaches the price of $130, the system will automatically sell this asset at this price.

The stop-loss orders also work if you want to sell your asset at the highest price. Decide on which price will be considered the best for you. 

Example: You buy 1 ETH at $140 and the market tends to go up. According to your predictions, the price will most likely increase by 10% and you set up a stop-loss order to execute the trade once ETH price hits $154. 

When trading, it is also recommended to set up alerts on the maximum and minimum price a cryptocurrency might reach during the day trading. 

To become a professional in any field, the most important thing is – practice. Start your trading career with daily practice. Trade a small amount of your funds and don’t put all your money into trading. 

The golden rule of trading is –  trade an amount of funds you are not afraid to lose. 

Useful services: TradingView, Coinmarketcap

Day Trading Strategies 

As soon as you start day trading and gain some experience, you’ll probably develop your own trading strategy. Until that moment here are a couple of day trading strategies that might work for crypto beginners.

Wave Riding Strategy

The Wave Riding strategy perfectly works for crypto newbies as it is simple and efficient. While in early stages, it is better to trade a cryptocurrency against a stablecoin. In this case, you have to monitor fluctuations of just one coin in a pair. 

It is important to find a good low entry position. How to detect it? This strategy requires patience, as most likely you have to wait for a couple of hours to fix the market tendency. It is better to enter the market when there is a row of green candlesticks. Once you fix the desired ROI reached – close the position. As a result, the chart will look wavy. 

hitbtc
HitBTC-TradingView Chart: BTC/USDT

Trading on News Strategy

Both types of news, global and crypto, have a significant impact on the market state. That is why traders have to stay updated on recent events. Whether these are great news or not, the market will react while a trader has to seize the moment by entering the market on time. However, fuss around a particular cryptocurrency may lead to greater volatility, so keep an eye and act promptly.

There are multiple tools to monitor crypto news and market sentiment. A data provider CryptoMood, for example, uses machine learning along with natural language processing to provide information regarding market fundamentals and sentiment. 

Day Trade with Bots

There is also an opportunity to trade with bots. Most cryptocurrency exchanges provide open-source API that (in case you are a tech-savvy trader) allows you to create a bot for trading to be more efficient and profitable. 

Essentially, a trading bot is a kind of software programmed to analyze cryptocurrency market trading data. Each bot can be adjusted to your preferences so that they are saving you from manual work of constant market monitoring. Such platforms as Cryptohopper,  BTC Robot, or Crypto Trader might provide you with decent trading bots. 

trading bot

Trading bots are in their infancy and currently cannot be adapted to highly volatile crypto market conditions. Among trading bots downsides is lack of security. They can be hacked or they might collect your data and unintentionally (or not) send it to a third party. Trading bots suit professional traders. 

Mind also that a trading bot can help to automate your trading in general. However, it is fair to say that nobody would ever share a piece of software that could potentially bring millions of dollars. 

Summary 

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. 

Disclaimer: This article should not be considered as offering trading recommendations. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. While price analysis is a useful tool, it should not be considered predictive for the future performance of any investment vehicle.

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.

About Changelly

Changelly is a secure instant crypto exchange that has 150+ cryptocurrencies available to be swapped and bought at market-best rates. Operating since 2015, the platform and its mobile application attract over a million visitors monthly, who all enjoy quick and simple exchanges, low transparent fees, and 24/7 live support.

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