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Best ways to Day Trade Crypto

Day trading is a short-term strategy in crypto trading. Traders utilize this strategy to sell a digital asset the same day that it was bought.

Day Trade Crypto

The objective of day trading is to make dozens of trades per day by applying technical analysis and charting systems. It helps traders to profit from intraday price movement.

It is a common strategy applied in traditional market trading activities and crypto, stocks, bonds, commodities, and currencies also. Traders watch multiple screens to exploit trading opportunities. It requires concentration and a keen focus on crypto prices and market movement.

The high risk involved in this strategy makes it similar to gambling. However, when you master self-discipline in crypto trading, you can learn to be profitable. The risk management skill of the trader will determine the profit that he makes. Day traders should risk money that they can afford to lose.

Short-term traders prefer trading strategies like day trading, scalping, and range trading for instant gains. Day trading is to buy and sell crypto assets several times within a day. However, long-term traders look to gain from a rise in price value over a period of time and invest in cryptocurrencies by buying them early and selling them at a later date.

Bitcoin and Ethereum are the top two cryptocurrencies in the market cap, while Binance Coin is the fourth largest. Choose the best crypto platform like Coinbase, Binance, Kraken, and Gemini for a profitable trading experience. Binance.US and Crypto.com are the best US crypto exchanges that generate a high trading volume, making them perfect for day trading cryptocurrency.

Basics of Day Trade Crypto

The crypto market enjoyed enormous growth in 2021 and is set to expand further in 2022.

  1. Choose the best cryptocurrency to invest in 2022
  2. Choose the best crypto trading platform
  3. Decide on the crypto to trade
  4. Select the best day trading strategy
  5. Crypto Trading Analysis for beginners
  1. Choose the Best Cryptocurrency to Invest in 2022

Crypto Day trade

  • The Best Crypto To Invest In 2022

Bitcoin is the largest cryptocurrency in terms of market cap.

BTC price movement has a significant impact on the prices of the rest of the crypto market. Bitcoin hit new heights in 2021 in the months of February, April, and November. In November 2021, BTC was trading above $67,000.

Ethereum is the second largest in market value. Its Ethereum 2.0 upgrade has brought in more users, and ETH/USD prices hit a high of $4,635 in November 2021.

Binance Coin (BNB) is a coin of the Binance Exchange. It attracted more uses with new projects like Radio Caca and EverGrow Crypto. It adds more value to the BNB coin.

Dogecoin (DOGE) saw a sudden upswing in prices in 2021. It was priced at less than $0.10 in March 2021 and spiked to 0.7250 in May 2021. It is a meme coin started as a joke. It gains fame from the various tweets from Elon Musk, the CEO of Tesla.

Polkadot offers interoperability between blockchains so that they can work together. It saw vast growth in 2020 and 2021. Polkadot prices were at a record high in November 2021 but gave up its profits in December 2021. Deutsche Telecom, the biggest telecom company, invested in a significant number of DOT tokens, which raised its prices. DOT crypto can process more than 1,000 transactions per second.

  • Best Penny Cryptocurrency to Invest in 2022

New investors are easily attracted to the crypto industry and find it provides an easy solution to earn profits. However, one should be prepared for the uncertainties involved in digital assets. Do research before you expand your portfolio in the crypto market.

Best Penny Cryptocurrency

Penny cryptocurrencies trade at a price value of less than $5 per unit. Investors are attracted to small cryptocurrencies as they involve small market capitalization and expect their investment value to increase over time.

Choose the best penny cryptocurrency to invest in 2022 by checking its trading history, performance, and value. Make sure that it is listed on top exchanges. Confirm that the coin has a large community of followers. The best coin should generate strong value either in the long or short term. Do not allow human emotions and greed to interfere with your crypto trading strategy. It is the self-discipline that will make your crypto trade profitable.

Shiba Inu (SHIB) has a strong community of followers and runs on the Ethereum network. It partners with the Flexa payment system.

Crypto.com Coin (CRO) is a native token of Cyrpto.com and an open-source blockchain chain developed by the Crypto.com Chain.

Tether (USDT) is the fourth biggest in market cap and is immune to volatility, as USDT is pegged against the US Dollar $1.00. Its consistent performance and prices have made it a favorite among investors.

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Stellar (XLM) is an open network that helps in storing and moving money. It is a stable coin from the Terra blockchain. It is best for logistics investment. Its real-world application makes it most usable by companies such as Smartland, Mobius Network, etc.

Reef Finance (REEF) is bought for investment purposes by long-term holders. It acts as a uniting factor for DeFi users to move to multiple platforms. It is available on the Binance Smart Chain and runs on Polkadot Blockchain.

Basic Attention Token (BAT) helps distribute ad revenue among readers and advertisers. Its Brave browser has more than 25 million active users. BAT crypto is available on Linux, macOS, and Windows.

  • New Cryptocurrency 2022

New cryptocurrencies are gaining more value than Bitcoin and Ethereum. Experts predict that crypto prices may reach new highs in 2022.

Crypto day trade

  • New Cryptocurrency Release 2022

Terra (LUNA) protocol stabilizes Terra stablecoins, pegged to the US Dollar and the Japanese Yen. When using the Terra platform, traders earn rewards through staking. It is a safeguard asset that trades high, especially when the crypto market is overwhelmed by bearish sentiment.

PancakeSwap (CAKE) is a decentralized exchange built on Binance Smart Chain. It hit a high of $44 in May 2021 and is trading at $11.96 in January 2022.

Algorand (ALGO) is the 22nd largest crypto in market value. It processes 1,162 transactions per second. It is interoperable and makes dApps and Defi enter mainstream transactions.

Evergrow (EGC) launched news that has more than 120,000 investors. It has strong fundamental aspects. Holders of EGC coins will get passive income on their investments in the form of BUSD. Its usage in NFT games and play-to-earn games lures investors into gaming activity and is best avoided. It is priced at $0.0285 as of January 2022. EGC’s lowest trading point was in November 2018 at $0.0424. It is currently trading at $0.0286 in January 2022.

IOTA partners with Dell Technologies and analyses the trustworthiness of data before its usage on an application. It is not built on a blockchain but on Tangle, which is something like a tangled web or a direct acyclic graph (DAG).

  1. Choose the Best Crypto Trading Platform

While selecting a trading platform, consider factors like its asset liquidity and exchange liquidity of that platform. The fee charged for the transaction is another criterion to consider. Learn about day trading, as it is a serious job and you should know the techniques of trading to be profitable. The crypto industry is a form of investment, but it involves risks. Do your own research and get acquainted with the trading concepts before leaping into the crypto industry.

  • Multiple Crypto Availability: Know the cryptocurrencies available for trade on the platform. Day traders can choose an exchange that supports more crypto pair options for trade.
  • Transaction Fee: Every exchange charges a transaction fee, and the structure varies for each crypto exchange. Newbies should consider cryptocurrency exchanges with no fees or low fees for transactions made. Crypto exchanges with the lowest fees are Cash App, Pionex, Binance, CoinSmart, Bisq, and Kraken. Bittrex fees are charged on the number of funds traded.
  • Liquidity: An exchange with high liquidity ensures speed and easy access for users. Traders can buy and sell digital assets almost immediately.
  • Speed: Decision-taking should be fast for traders in day trading crypto strategy to make more profits. Select the best crypto trading platforms that allow speedy transactions.
  • Wallets: To store your digital assets, you can choose the best crypto trading apps for wallets, like the Ledger Nano or Trezor One.

The best app for crypto trading is eToro crypto and Voyager. Most investors prefer to use brokerage platforms and exchanges to buy and sell crypto. There are apps to manage your portfolio, and some apps help you earn passive income on your crypto investments.

The best app to buy cryptocurrency is through exchanges. With a fiat currency like US Dollar or crypto holdings like Ethereum and Bitcoin, you can buy cryptocurrencies on most exchanges. Once you comply with SEC guidelines and provide identity verification, you can start trading crypto.

  1. Decide on the Crypto to Trade

Everyone is showing interest in cryptocurrency these days. The top cryptocurrencies in the market cap are Bitcoin and Ethereum. Digital assets are speculative investments, and wild price swings are the darker side of crypto trading. You can enter cryptocurrency trading only if you are willing to face the risk of losing everything.

  • It is best to trade on one of the top 20 crypto coins in terms of market cap. Do research to choose the crypto and the best cryptocurrency exchanges for trade.
  • The volatility of markets depends on economic data, the news cycle, and research reports. Small market cap altcoins are more volatile than top cryptos, such as Bitcoin or Ether.
  • Crypto with high liquidity involves less risk.
  • Best cryptocurrencies 2022 for day trading are Ethereum, Bitcoin, Binance Coin, and Ripple XRP. They offer good volatility for traders, which is essential for making profits in day trading. They are easily available on most cryptocurrency exchanges.
  • The best cryptocurrency brokers for Coinbase and Interactive Brokers. To gain more knowledge about crypto trading, you can choose crypto brokers to help you trade and invest in cryptocurrencies.
  • There are 18 crypto trading bots customized to suit individual trading strategies at Pionex. Crypto traders can choose from Grid trading bots, leveraged grid bots, and rebalancing bots, customized to suit individual preferences. On the Pionex app, you can earn passive income.
  • The Gemini crypto is the best crypto trading app for new investors. Gemini crypto has a mobile and web app for newbies in crypto currency trading for the first time. ActiveTrader is a tool for advanced crypto traders on the Gemini crypto exchange.
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Robinhood crypto day trading is a free crypto trading app. But it offers few cryptocurrencies and does not allow the transfer of digital assets off its platform.

  1. Select the Best Day Trading Strategy

Day trade crypto is to take positions and exit on the same day. The trader takes advantage of intraday price movement and makes profits. He has to figure out the exact entry and exit points by referring to technical analysis.

Be sure to remain updated with the best Bitcoin news websites to get the latest news that moves the crypto market. Cointelegraph, CryptoSlate, Bitcoin Magazine, CoinDesk are top Bitcoin price news websites that you should stay connected with. Reddit cryptocurrency news is a leading news website with a high web content rating. The Reddit crypto is a discussion website with more than 500 crypto communities.

Etrade crypto, TD Ameritrade crypto, and TradeStation are a few cryptocurrency trading platforms that provide the best crypto option trading facilities.

Let us go through some basic strategies in day trade crypto to get favorable returns. Crypto trading is basically gambling, and trading strategies will not work 100%. So watch the market and remain updated on crypto news.

  • Range Trading: All cryptocurrencies move within a particular range. The lower range limit is the support level, and the upper limit is the resistance level. Many experienced analysts can identify the trading range, and traders rely on such analysts to buy at support levels and sell at the resistance level.
  • Scalping: Traders increase their trading volume through this strategy. However, you have to watch out for the margin requirements while applying a scalping strategy. Some key elements to be noted are the past trend of the crypto asset, volume, and the daily price movement of cryptocurrencies. A good crypto scalping trading strategy is to make small profits frequently. It will generate a substantial return at the end of the day.

A simple scalper uses this short-term strategy to make a profit from small intra-day price movements in crypto. Traders use volume heatmaps and other technical indicators to determine their entry and exit positions. It is a high-risk strategy that may negate your profits.

  • Arbitrage: Traders make profits from value differences. Cryptocurrency trading pairs are traded with one exchange on another as prices vary between crypto exchanges.
  • Crypto Trading Bots: it involves trading using an automated software tool. The trader predefines conditions, and the crypto trading bots perform trade when these conditions are met. High-frequency traders prefer a computer program to conduct the trading itself. Trading bots come with a specific strategy. The crypto auto trader executes the strategy through a pre-fed program. The automated trader software constantly monitors, backtests, and updates the algorithm according to market conditions which change constantly.

The automated crypto trading system requires knowledge in advanced trading programming and strategies.

On the social trading cryptocurrency platforms, you can copy trades of other successful cryptocurrency traders. eToro crypto is the best crypto trading platform for multiple digital assets.

  • Long Straddle: it is also known as the option straddle wherein the trader opens a put and call order.
  • Day Trading and Swing Trading: Crypto traders prefer day trading and swing trading the curve, depending on their time horizon. However, both strategies come with inherent risks, and the investor must be prepared for the high risk in volatile cryptocurrency trading. In crypto swing trading, the traders wait for notable price swings to take profits. Traders feel that they are less stressful as it involves a longer timescale.
  1. Crypto Trading Analysis For Beginners

Coinbase is the best cryptocurrency trading platform, which provides easy access for crypto trading. Traders prefer it as it is the largest cryptocurrency platform. It is a simple platform to help traders gain experience in crypto day trading. But, it charges higher fees than other cryptocurrency exchanges.

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Traders apply technical analysis to their trading strategies. The past performance of crypto indicates its future profit or loss. Trading indicators like the Relative Strength Index (RSI) and Money Flow Index (MFI) are some indicators required to determine the price direction.

  • Crossover Trading Strategy: When a golden cross or death cross occurs on the charts, traders can use this opportunity for profitable trading. Here prices rise or fall sharply, making it make profits. The golden cross occurs when the 50 DMA crosses above the 200 DMA. The death cross occurs when the 50 DMA crosses below the 200 DMA.
  • RSI Indicator: It helps traders identify if a particular digital asset is overbought or oversold. It helps traders to determine the entry and exit points.
  • RSI Divergence Strategy: It is a technical strategy that is more advanced than the RSI strategy. It identifies the price trend and shows the best time frame, preparing them well before the direction change.
  • Market Sentiment: Trading news crypto affects market sentiment. Big news tends to cause high fluctuations in the crypto market. Further, Twitter chatter is bound to affect the crypto movement. Elon Musk, the electric-car maker of Tesla, is well-known to impact most crypto prices with his tweets. Bitcoin price news took a beating in May 2021, when he raised environmental concerns on crypto mining. China’s regulatory action on cryptocurrencies affected Bitcoin cash news.

Refer to the news aggregator platform CryptoPanic as it is a free tool available to monitor your cryptocurrency portfolio. You can download the app to get a categorized display of information.

A Few Pointers Before you Day Trade Crypto

The crypto market is the most volatile asset class. Choose top cryptocurrency exchanges such as Coinbase that offer security and safety of digital assets. Select the best crypto exchanges that offer diverse research and analytical tools and charts.

  • Research the crypto before investing or trading on it. Keep yourself updated on the news flow regarding the digital asset.
  • Set an investment goal while choosing the day trading strategy. It will protect your investment.
  • The crypto market is open 24/7, and traders can buy and sell crypto without limits.
  • Inexperienced traders should be cautious while trading. It is best to learn the basics of the crypto trade before you venture into the market.
  • The volatility in the crypto market may not suit those who are risk-averse.
  • The crypto market is unregulated, and traders should be cautious about hackers and scammers.
  • Do not choose the pump and dump type of crypto, as prices are artificially pumped up to dupe investors.
  • Stick to the predetermined entry and exit points and do not make hasty decisions.
  • New traders can undergo training through mock trading activities to acquire knowledge of the real market.

To Summarise

Day trading is a high-risk strategy in which traders try to make a short-term profit. Most day traders make losses, so make sure that you invest not more than 5% of your portfolio in crypto trading.

Day trading cryptocurrency has gained popularity over the past few years. It is best to be well-versed in it to be profitable.

Select the best crypto trading platforms that offer a wide variety of crypto for trading. Fast order execution and lowest fees crypto exchanges for debit and credit cards help traders make more profits. Choose the top crypto exchange that offers stock and forex, depending on your preference.

3Commas is the best crypto trading platform that allows users to build automated trading bots. Its Smart Trade has risk management tools for traders to use these tools for the trade. It is attuned with 22 crypto exchanges. Its auto trading robot allows copy trading and portfolio analysis.

If you are willing to take risks, you can day trade crypto.

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