When it comes to day trading, beginners tend to be less successful than experienced traders: this is not an easy task. Want to join the rows of day traders? Let’s discuss the day trading strategies, how it differs from other approaches, and why it can be much more profitable. Also, we have prepared the list of the most profitable cryptocurrencies for day trading in 2020.
What Is Day Trading?
Day trading is a type of trading when several or many transactions are performed during the day (depending on the chosen strategy). Of course, any trader seeks to ensure that the number of successful operations prevails over unsuccessful ones. To reap maximum profit, you have to constantly monitor the news related to the cryptocurrency market, use trading instruments, monitor the slightest changes in the crypto rate, respond to trend changes in a timely manner, and so much more.
There is a huge number of different indicators that show the development of the current situation in the cryptocurrency market with a certain probability. However, it’s impossible to take all of them into account, even with the right day trading strategies. Besides, they might provide absolutely different signals: some indicate the market’s growth while others may signify the market’s decay.
The art of successful trading means choosing the most significant trading indicators and analyzing them correctly to predict the course movement.
Each experienced trader prefers his own set of such indicators: altogether, they allow choosing the right strategy of trading on the cryptocurrency market. If the percentage of successful transactions falls, then after analyzing their actions, they should make some trading strategy adjustments.
Is Crypto Day Trading Profitable?
Strategic trading during the quiet development period on the market has its own upsides. That way, a trader can notice certain patterns in the market and reap maximum profit. After identifying those patterns and acting upon them, the trader’s strategy can be effective for a while.
For the correct determination of patterns, the trader must understand the market, have some experience of trading, know the methods of technical analysis and receive up-to-date information from reliable sources and so on. But most importantly, the market should be relatively stable.
Day trading strategies for different cryptocurrencies are similar since the crypto market is characterized by uniformity – all assets may fluctuate in price by the same patters. However, more experienced traders might be aware of the differences between currencies: they know which coins are trading well. As part of the strategy, the trader determines the entry and exit points, the period between the entry and exit points, the period for the next entry and develops standard reactions to price changes during a certain period.
Best Crypto Coins for Day Trading 2020
Which assets are the most profitable for short-term trading? Here are five day trading cryptocurrency options that should be considered by both beginners and experienced users.
Binance Coin (BNB)
Binance Coin (BNB) is well-known crypto that has been introduced by Binance exchange: initially, it was Ethereum-based, however, recently, BNB discharged its mainnet coin. The clients use BNB tokens to pay exchange fees and for using some services and tools. The charges by and large incorporate trade expenses, exchanging charges, and listing fees. Many day investors choose BNB since it attracts attention and is a Binance’s product. All the mainstream exchanges and wallet companies support it, so you definitely should consider this cryptocurrency in your day trading strategies.
IOTA is a cryptocurrency created for the Internet of Things. Gadgets connected to the Internet of Things use this crypto for data exchanges between themselves. It is an open-source digital asset that centers around secure payments and exchanges.
Aside from being listed on top exchanges, IOTA is a decent choice for day trading beginners in light of the fact that this crypto has a bright future ahead. The number of Internet-empowered devices based on the Internet of Things is increasing – the industry is flourishing. Experts calculate that B2B spending on IoT innovations and devices will reach $267 bln in 2020. Thus, IOTA may have a lot of benefits in a long haul. Despite the fact that the volume isn’t so high for IOTA, it doesn’t detract from its appeal as day trading cryptocurrency.
Ethereum is the second biggest digital currency on the planet with pretty high price instability. Due to its smart contract application and decentralization, its use cases expand day by day. For daily investors, its volatility provides a great chance to benefit within a pretty short time span. Best of all, you can profit whenever the ETH cost is going up or down. Besides, it is accessible on the vast majority of exchanges.
EOS has grown exponentially: the developers managed to raise billions of dollars. Its value soared several times creating an elevated level of unpredictability. An experienced day trader can turn this unpredictability into serious profits. EOS is one of the top digital currencies ever, with group support and availability in the majority of the exchanges over the world. Buying EOS can be considered as a day trading for dummies – this asset is always worth it.
Tron has an exceptionally dynamic blockchain with its main developer Justin Sun flashing in crypto media and social networks. Indeed, Tron is mostly known for its positive news and improvements. Combined together with high volatility, all these factors show Tron as a good day trading cryptocurrency. Well-known crypto traders support Tron, and you should take their opinions into account.
Both day trading veterans and beginners can use our information to maximize their profits. Let’s finish our review with some simple tips that could help you avoid the most common mistakes in trading:
You should not invest in just one digital asset – diversify your portfolio by including several different cryptos in it. This will allow you to trade actively on some pairs when others don’t provide obvious points of entry or exit.
Try to never sell an asset for less than you bought it. As practice shows, sooner or later, the price returns to its previous level.
Avoid buying cryptocurrency on a rise and selling it on a fall.
Form the right approach to the value of your investment portfolio in the cryptocurrency market: calculate your profits in Bitcoin, not in fiat.
Avoid panic, especially with a sharp drop in value because it is always accompanied by corrections. After waiting a bit, you can sell more.
As a rule, with the growth of Bitcoin, altcoins fall in price. Consequently, alts grow most actively when Bitcoin’s price is flat or falling.
Keep up to date with information regarding the coins you have selected for investment. The information thrown at the right time can have a significant impact on the trend.
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.