Cryptocurrencies, while they are already heading towards mainstream, still project a “Wild West” trend. In May 2021, Bitcoin suddenly sank to a 30% dip in one day, plummeting at around $30,000. Again, that very same day, the coin piqued up to $38,000 in just a few hours. This extreme level of volatility is the signature of the crypto industry and a major reason behind the rising trend of day trading in digital assets. If you are aspiring to make some quick profits in the crypto scene, there could not be an alternative to day trading. The post below offers the ultimate guide on crypto day trading tips that will come handy not just for beginners but for veteran traders too. Visit here
However, before diving straight to crypto day trading tips, let’s have a quick word on the basic concept of day trading in crypto
Crypto day trading
The name, day trading, says it all. Well, day trading is a type of trading where a trader buys as well as sells off an asset within one single day. Unlike long-term or position trading, day trading does not involve waiting for months and years. In other words, when you are a day trader, your goal is to make profits out of minor price shifts in the market. Although we are discussing crypto day trading tips here, it must be noted that day trading is nothing new- rather, it’s a good old trading strategy that has always existed in the traditional trading market.
The fundamental reason why day trading has piqued in popularity in crypto scape is the extreme volatile character of the crypto market. Crypto is the most volatile of all the trading and investment assets you find today. While BTC took a 30% dip in a day, it can also surge to a sudden 30% jump in a single day. High potential of wild price movements makes crypto a lucrative avenue to make sizable profits in the short term- the core goal of day trading.
However, while we are talking about crypto day trading tips, we should also know that you can’t expect astronomically high profits with day trading. If you want dramatically high ROI, long-term trading is probably the best option for you. If you want to start crypto trading, you must be mentally prepared that profits would be moderate and decent.
Tips for new crypto day traders
Crypto day trading could be a risky venture as crypto volatility can make a person both a millionaire and a pauper just at the drop of a hat. Now, these risk warnings are not to discourage but only to prepare you psychologically about what you might encounter ahead. Nothing is worse than going out to trading blind- as a trader you must be particular about sticking to informed decisions- especially, when it comes to wildly volatile assets like crypto. In fact, this is one of the basic crypto day trading tips that every new trader should be aware of.
Below is a list of some of the most crucial crypto day trading tips to ensure a smart and safe trading experience for a beginner trader.
Choose the right coin
According to pro crypto day trading tips, your success at day trading is largely influenced by the coin you choose. Now, of course, crypto is a volatile industry and all coins show wild ups and downs from time to time. But, then, there are some coins that can assure you comparatively safer, more risk-less trading experience than other coins.
In regard to crypto day trading tips, the first task is to look for coins that usually show higher trading volumes than most of the coins and also excellent liquidity. These coins are usually traders’ favorite and their stellar popularity in the trading market automatically pumps up their trading volume. Bitcoin will always be a good example. Other bluechip coins like Ethereum or Binance Coin, are also fantastic candidates for the best coins for crypto day trading tips.
Bank on technical analysis
This is again one of the most significant crypto day trading tips.
Essentially a form of quantitative analysis, technical analysis refers to a study where you make the use of past price movements, charts, as well as historic price trends to project future price of a crypto asset. These crypto day trading tips involve study of the entire market, the asset price, and the major factors that had surged or tanked an asset price in the past. It is believed that the crypto industry follows historical patterns and hence technical analysis is one of the best crypto day trading tips for both beginner and advanced traders.
Don’t forget the fundamentals and sentiments
All crypto day trading tips will also ask you to get into fundamental or qualitative analysis as well, in addition to technical analysis.
The level of price movements of a crypto asset is also influenced by the fundamentals of a coin and the sentiments or news that surface surrounding it. Thus, fundamental analysis always claims a major place in the chart of top crypto day trading tips.
For example, if you are looking to trade a particular coin, just check whether the coin is poised for a major upgrade or some new development shortly. If the coin is backed by celebrity figures, the coin price will also be influenced by any remarkable announcement or deal cracked by these star supporters. You can schedule the timing of your day trading based on those insights and updates.
Understand the day trading strategies
The list of crypto day trading tips will remain incomplete without the mention of proven day trading strategies.
If you want to make profits several times in a day through day trading, scalping is one of the best crypto day trading tips for you. In scalping, you will buy and sell within the difference of minutes, seconds, or at the most just a few hours. Today, you have bots that help you with automated frequent trades for scalping.
- Range trading
Range trading in day trading refers to a projection that cryptocurrency prices will move within a particular range. As per the crypto day trading tips, if you follow range trading, you will make the purchase when the asset is overselling and sell it when the asset shows an overbuying trend.
- High-frequency trading
A close cousin of scalping, HFT is a strategy where traders buy as well as sell off an asset based on price movements in a fraction of seconds. If you follow the crypto day trading tips for HFT trading, the suggestion is to invest in an HFT software that utilizes intelligent algorithms and bots to execute the trades constantly and frequently on your behalf.
Sign up with the right crypto exchange
We will wind up with one of the most fundamental crypto day trading tips.
All crypto day trading tips will suggest to sign up with an exchange that can boast the following attributes:
- Excellent reputation
- High trading volume
- Great range of crypto assets to choose from
- High liquidity
- Advanced security measures
- User-friendly dashboard for beginners