A Beginners Guide to Day Trading Cryptocurrency

As such, there are hundreds of online platforms, exchanges, and brokers that offer cryptocurrency trading markets. Moving forward, we’re going to teach you what you need to learn how to day trade cryptocurrency and we’re going to share some out-of-the-box rule-based day trading strategies. Trade with discipline, use risk management tools such as stop-loss orders and establish clear entry and exit points. Candlestick patterns can be used successfully for cryptocurrency day trading when learning, adapting, and managing risks prudently. In addition, use one of the best day trading apps to implement candlestick patterns properly.

• Its all-in-one apps for iOS and Android are recommended for access, but it also supports all major internet browsers.
• When trading support and resistance it can be worth zooming out to a higher timeframe.
• The wallet also gives you your own unlosable private key and on-chain address.
• A great crypto for day trading, Cardano is highly volatile and boasts high upside potential.

However, fuss around a particular cryptocurrency may lead to greater volatility, so keep an eye and act promptly. Instant crypto exchange Changelly provides access to over 150 cryptocurrencies. Read our guide and start using this trading style in your trading strategy if you want to learn how to day trade Crypto.

Automated crypto trading apps

Any action taken by the reader based on this information is strictly at their own risk. BingX’s inclusive approach to new traders is complemented by its compliance with regulatory authorities in Australia, the United States, and Canada. Deposits can be made directly from the platform using a credit or debit card, with a minimum deposit for crypto purchases set at $50. For instance, if you open and close a trade within 30 mins, you won’t pay a trading fee. If you want to avoid losing your profits to computer crashes and unexpected market events then you will still need to monitor your bot to an extent. Trade execution speeds should also be enhanced as no manual inputting will be needed.

• Its standout feature, copy-trading, empowers users to replicate the trading strategies of successful traders.
• This is typically very competitive, with BTC/USD and ETH/USD averages a spread of 36 pips and 1.2 pips respectively.
• From here, you need to decide what features to prioritize, whether it’s finding the right price or one that offers a great community to collaborate with.
• Trading crypto generally revolves around speculating on it’s price, rather than owning any of the actual coins.
• In terms of trading options, KuCoin offers spot markets, margin trading, futures and leveraged tokens.

The difference in the buy and sell price of an asset is known as the “spread.” As a generally unregulated market, crypto allows anyone to create an exchange. This can lead to major differences in the spread because the differences in asset liquidity and trading volume. In layman’s terms, a cryptocurrency exchange is a place where you meet and exchange cryptocurrencies with another person.

Binance Review 2023: Is It the Right Crypto Exchange for You?

Sure, people who get in early (meaning really really early) and hold on to their positions on Bitcoin made a lot of money. But day traders, who buy and sell in rapid succession throughout the day, could be better suited during market downturns and high volatility. This day trading strategy involves studying financial data such as historical prices and data points to locate statistical – trends in the crypto markets. This gives traders a chance to identify opportunities for trading and earning profits. EToro has integrated essential functions such as one-click trading, TipRanks research, and a professional-grade technical analysis tool. Bybit stands out as a platform for experienced day traders seeking opportunities beyond basic buy/sell orders.

EndoTech is a leading automated crypto trading platform that has been fine-tuning its trading algorithms since it launched in 2012. This may seem a bit scary for some but EndoTech never gets permission from your exchange account to withdraw or transfer funds so you don’t have to worry. There are many options to choose from, but the first thing to keep in mind is that not all exchanges will allow you to day trade – cryptocurrencies. In fact, some only allow users to place buy or sell orders for a certain amount of time before they expire. It might be best for your first experience with cryptocurrency trading to stick with an exchange that allows limit orders as well as market orders (and even stop losses). If you’re getting into the crypto world and are looking to make some good money, day trading could be a great avenue.

Dealing with losing trades and minimizing potential losses

Kraken CEO Jesse Powell founded the company out of a desire to build a secure, organized, and trusted crypto platform following the major security breach at Mt. Gox. You should then sell when the first candle moved below the contracting range of the previous several candles, and you could place a stop at the most recent minor swing high. Finder.com is an independent comparison platform and information service that aims to provide you with information to help you make better decisions. We may receive payment from our affiliates for featured placement of their products or services.

• Before you get started with any kind of crypto day trading, make sure you’ve carefully weighed up the pros and cons.
• On the other hand, if you were to hold onto a cryptocurrency position for days or weeks – this would be a swing trading strategy.
• US-based traders can use only domestically regulated crypto-trading platforms, so this is a major factor to consider when researching the right platform.

Binance lists well over 350 cryptocurrencies, which means that you should be able to trade practically any relevant cryptocurrency when the right opportunity arises in the market. In terms of derivatives, Binance provides stablecoin-settled and crypto-settled futures, as well as options. Traders on Binance Futures can access large amounts of leverage, up to 125x in some cases. A wise trader does not depend on information from other traders to know when to enter or exit the market. Learn how to conduct technical analysis and keenly follow news headlines that are likely to affect the market.

Best Crypto Exchanges for Day Trading Reviewed

However, current news can still tell you what cryptocurrency or crypto pairs will be trending and, therefore, will have active price movement in the near future. Additionally, you can use the news to predict whether you should open short or long positions. Many fortunes have been made in cryptocurrency, but it is important to always keep in mind that many, many more have been lost. The flip side of unprecedented price surges of several hundred percent is sudden drops.

• If you’re holding a long trade, position your stop below the support zone, accounting for wicks and potential price spikes to the downside.
• Once you’ve programmed your strategy, the bot will get to work, automatically executing trades when the pre-determined criteria are met.
• By making small profits over a short period of time, the range trader minimizes losses incurred by unfavorable news cycles or market conditions.
• By closing a portion of your position quickly, you will reduce the risk of an offside trade and can choose to hold for a longer period.
• This can lead to major differences in the spread because the differences in asset liquidity and trading volume.

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 immediate edge whereas other cryptocurrencies perfectly work for day trading. In addition to presenting profit opportunities, volatility can also cause significant losses.

Where Can You Day Trade Crypto?

Of course, prices still go up or down, but compared to cryptocurrencies, it would generally only be by a small amount. Let’s take a quick look at an example of two cryptocurrency day trades. Range traders assume the confines of those price ranges will maintain support and resistance until the price action breaks outside those confines. As such, the bottom confine of a price range will possibly shove the price action upwards, and the top confine will press the price action downwards. However, the price action could potentially break out of a range depending on the number of times it touches a support or resistance level.

• Internet day-trading scams have lured amateurs by promising enormous returns in a short period of time.
• If you don’t have a stop loss set, you can quickly get caught offside and take a loss larger than you accounted for.
• Just go to Binance, convert your fiat currency to cryptocurrency, and get started right away.
• This day trading strategy involves buying cryptocurrency from one marketplace and selling on a different one at a higher price.
• However, if there is an influx of new volume and expansion candles, this could be a breakout developing – be cautious and don’t rush into trades you hadn’t planned for.

If the market starts to revert to the mean and your position moves into profit, you can add more size if you’re comfortable and your risk tolerance allows. If orders are getting filled as usual and the order flow remains steady, you can start to add small size, set your stop loss and wait for a rejection to occur before pulling the trigger. However, if there is an influx of new volume and expansion candles, this could be a breakout developing – be cautious and don’t rush into trades you hadn’t planned for. Are you able to handle all this weight on your shoulders while potentially losing money?

Bot or high-frequency trading

To become a professional in any field, the most important thing is – practice. Trade a small amount of your funds and don’t put all your money into trading. However, you will need to follow the US regulators’ Pattern Day Trading Rules. By journaling your trades in a spreadsheet you can analyse them to find out what is working and what is not working. You can open a free account with eToro and see and test all of these services and features for yourself.

They can be hard to master, and getting caught offside in a fast-moving market can be costly. When first learning to trade breakouts, use small size and focus on correct position management and stop loss placement. As shown on the chart below, stop losses for breakout trade setups are best placed inside the trading range or before the support or resistance level.

How To Day Trade Crypto Currency

Make sure your stop loss is well placed and your position is sized according to recent volatility. In this section, we’ll explore the various types of trend pullback trades and provide you with risk management and profit taking strategies to help capitalize on them. Pullback trades are common in crypto futures markets as there’s often a trading pair experiencing a trend day and increased volatility. The pullback trade is a trend trading strategy that aims to pinpoint over or underpriced entries. These trades are best executed by recognising when the market has retraced to fair value and is likely to resume its trending state. It can also be a good idea to scale out of positions and incrementally take size off.

Even the most successful traders in the world make losses, as it is impossible to always make the correct prediction. If you want to trade other cryptocurrencies, it’s a good idea to use an exchange that offers in-house markets for multiple coins (like Coinbase). That way you can easily buy and sell the coins of your choice without having to jump through hoops or sign up for another cryptocurrency exchange.

Range Trading

Successful crypto day traders need to have higher chances of winning than losing. AvaTrade is one of the best platforms for crypto day trading as it has an extensive range of markets. At the time of writing, it was within the 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. Recent market and industry developments are less of a factor in crypto day trading strategies than in long-term investment. That’s because day traders make a profit off price fluctuations, not necessarily bullish or bearish trends.

You will find a wide variety of digital currencies on the Coinbase website that can be purchased with ease. You will pay 3.99% to buy a crypto asset direct with your debit card – which is expensive. Bank transfers are significantly cheaper – often costing less than a dollar. Coinbase is the largest cryptocurrency broker in terms of client accounts – with more than 35 million people now using the site.