Day Trading Cryptocurrency 101 – Ultimate Beginner’s Guide
Day trading is the process of buying and selling shares of a stock or other financial instrument within a single trading day. Day traders typically trade in highly liquid instruments with low transaction costs, such as stocks, futures contracts, commodities, foreign exchange currencies, and options.
The cryptocurrency trading course for beginners free is an ultimate beginner’s guide to day trading cryptocurrency. It offers a step-by-step tutorial on how to get started with day trading cryptocurrency.
Do you want to learn how to benefit from day trading cryptocurrency? We can’t promise you anything, but we can offer you all of the information so you can have the greatest chance of succeeding.
The truth is that the price of Bitcoin is much greater now than it was before.
Right now, you’re probably not buying into the hoopla. How can you earn such incredible profits when investors have experienced 20-30x returns in the last two years?
Within a year, the value of Bitcoin may reach $50,000 or more. That, however, is not a secure bet, and novice investors should avoid making long-term investments.
This tutorial is designed for total beginners.
In every market, we know that hundreds of “strategies” exist. A safe method is the only one-size-fits-all strategy. Later, when you’re more comfortable, you may worry about more sophisticated trading techniques.
Is Bitcoin & Altcoin Day Trading Right for You?
Day traders of Bitcoin and other cryptocurrencies come in all shapes and sizes. Forex traders, online poker players, and stock investors are the most frequent faces in these marketplaces. Wall Street is now supporting the sector as well.
Hedge funds, ICO ventures, and other entities have helped to build the market, and there is a feeling of stability here. Cryptocurrency trading is now more legitimate than it has ever been. More significantly, there is adequate liquidity in these markets to execute conventional day trading methods securely and successfully.
Be Wary of Crypto Day Trading’s Risks
We’re not going to lie: trading cryptocurrencies may make you lose your shirt. The dangers are many; you must safeguard yourself against exchange hacking, fraud, transaction mistakes, and other issues.
Even Ethereum’s inventor (Vitalik Buterin) would tell you the same thing:
Some “stupid money” people may be put off by that message. It’s critical for you astute, well-informed investors to look between the lines.
Cryptocurrencies are very volatile investments. This is correct.
A coin’s value may increase by 10% or double in a single day. Another day, the price might drop by 10% or perhaps be halved. These fluctuations may not occur every day, although price discovery does occur on a daily basis.
The same thing happens in the markets on Wall Street.
The difference is that crypto trading takes place in real time, right in front of your eyes.
There is an opportunity for everyone to earn money here. So, we’re going to emphasize a few key aspects, and you’ll discover how to profit from bitcoin day trading.
The Fundamentals of Cryptocurrency Day Trading
Before you spend a single cent in day trading cryptocurrency, there are five things you should know.
What does it mean to go “long” and “short”?
The term “long” refers to a purchase made in expectation of a price rise.
Short selling is the act of selling in expectation of a price drop.
It is easier to earn from day trading bitcoin on exchanges that allow you to bet in both ways. These marketplaces are constantly fluctuating.
You don’t want to adopt a “perma-bull” mindset, and some exchanges will only allow you to bet on a coin’s upside, not its downside.
What does it mean to trade with leverage?
Leveraged traders borrow money in order to enhance their investing risk. Depending on the platform, the degree of leverage will differ. Some will only enable you to run 1x, while others will allow you to run 20x or more.
Example of a 5x leverage
With $1,000 in margin, you have $5,000 to trade with…
You double your money thanks to a 20% price increase in your favor.
Example of a 10x leverage
With $1,000 in margin, you may trade with $10,000…
You double your money thanks to a 10% price increase in your favor.
Example of a 20x leverage
With $1,000 in margin, you have $20,000 to trade with…
You double your money thanks to a 5% price increase in your favor.
$5,000 is the maximum amount you may trade with.
What happens if the market fluctuates against you?
If the price moves 20% in the wrong direction from your buy price, your margin will be blown at 5x leverage. At 10x leverage, a 10% move against you breaks you. At 20x leverage, a 5% move against you will break you.
You may, however, raise the margin in your account. It’s possible that the price is on the verge of liquidating your position. Increasing the margin may help you avoid losing all of your money. Furthermore, if the transaction swings back in your favor, you may still make a lot of money.
What exactly is a spread?
Trading platforms that use CFDs charge a spread for their services. This fee is a premium added to the price of purchasing and selling bitcoin. Depending on the platform, the spread rate usually varies from about 0.5 percent to 2 percent (in rare cases as high as 5 percent).
At a market price of $10,000, there is a 1% spread.
If you purchase one bitcoin, the price is $11,050.
If you sell one bitcoin, the rate is $9,950.
When deciding where to trade CFDs, be cautious. You lose value by paying a premium on both sides of the spread, regardless of whether you’re shorting, longing, or leaving a position.
What’s better: CFD trading or Binance?
Do you want to be able to get your crypto currencies out of your wallet? If that’s the case, binance trading will be a good choice. At any one time, this exchange has around 250 currencies open for trade (including several penny cryptos). You can buy anything you wish and withdraw it to your own wallet, as well as transact on the relevant blockchain network.
Some exchanges, like as Binance, do not, however, provide leverage trading. This implies that keeping a coin that appreciates in value is the only way to profit while trading on this market.
This strategy only works if you purchase penny cryptos with high growth potential. Investing in these coins requires a commitment to retain for many months.
Another issue with Binance is that in order to trade any of their cryptocurrency pairings, you must first have Bitcoin or Ethereum. It may be difficult to calculate the monetary worth of all of these coins. Later in this post, we will go further into Binance. Binance differs from CFD trading firms in that it is a crypto to crypto exchange.
?? CFD trading has a huge advantage for aspiring traders in nations like the United Kingdom: earnings are tax-free. Binance, for example, does not fall under this category.
USDT markets are available on Binance.
However, this “US dollar-backed token” has recently been heavily criticized. USDT has yet to provide a full audit, which is managed by a firm known as “Tether.” Many people in the cryptosphere wonder whether they’re operating a fractional reserve.
If Tether has a terrible ending, it will be very difficult for you to withdraw your funds. Some of these exchanges may even fail, resulting in losses comparable to MtGox. CFD systems do not entail the same risks as traditional currency trading platforms. On the other hand, you may avoid this issue on Binance by sticking to Bitcoin or Ethereum trading pairings.
To cut a long tale short, CFD trading is the simplest choice provided you don’t mind the limited number of cryptocurrencies you may trade. The only problem is that you must locate a platform with affordable rates.
What is the definition of technical analysis?
Technical analysis (commonly known as “TA”) is a pattern-based technique for forecasting market movements. These patterns may be seen in a variety of markets, including Forex, commodities, stocks, and securities.
Here’s how technical analysis works in practice…
Bitcoin has broken out of a short-term uptrend:
TradingView.com is the source for this information.
We can see two weeks of Bitcoin price movement on this chart, and the market is clearly in an uptrend. Because the highs keep rising higher and the lows keep falling lower, we know this is the case.
The ascending channel breaks, causing a significant downward movement. Until that moment, however, the market had remained above the support trend line. What did day traders do when they saw this obvious trend?
Every time the market revisited its rising support level, buyers stepped up to the plate. Before the rising momentum trailed down, it was respected for a long time. Bitcoin day traders had the opportunity to “scalp” for modest gains on a daily basis throughout this period.
The prior support level was challenged when the trend broke.
The bulls were unable to drive the price above it, resulting in a further decline. So, in the weeks preceding up to the event, there were plenty of chances to go long… Following that, when the support line transformed into a point of resistance, it was the ideal time to go short.
In a short-term frame, this is simply a “local” top. At Bitcoin’s $19,000+ ATH level, same behavior would have occurred. When you can make a good profit, you should leave your position. If you are fortunate enough to predict a long-term peak, it may be worth holding a bit longer.
Beginner’s Advice: Go with the Flow
If the market is trending upward, seek for inexpensive entry points on dips and sell after the price has risen somewhat. Wait for the next higher low to develop before buying back in and selling at the next top. Alternatively, go short if the price drops to a lower low and then rises to a lower high.
Don’t anticipate the price to rise every time you go long. Your aim is to make a lot of little lucrative transactions. You don’t have to choose the one jackpot moment that appears every week.
What does a 2% profit each day ($5,000 invested) look like?
$5,100 on the first day
Day 2: $5,202
Day 3: $5,306.04
Day 4: $5,412.16
Day 5: $5,520.40
Day 6: $5,630.81
Day 7: $5,743.43
It’s not terrible… After one week of trading, the gains were almost 15%, resulting in a profit of $743.43 on a $5,000 investment. This amount of profit may not be comparable to what others have made by purchasing Bitcoin years ago and keeping it. That’s OK; just be disciplined, and your money will increase tremendously over time.
$5,743.43 in the first week
Week 2: $6,597.39
Week 3: $7,578.32
Week 4: $8,705.10
Week 5: $9,999.42
$11,486.18 in the sixth week
$13,194.00 for the seventh week
$15,155.75 in the eighth week
$17,409.18 in the ninth week
Week ten: $19,997.66
Week 11: $22,971.01
Week 12: $26,386.45
Have faith in the process. Day trading bitcoin for 12 weeks at a profit of 2% each day may result in profits of more than 5x. These figures are based on the assumption that you would reinvest your earnings in the next days.
You can’t always anticipate the 50 percent movements. On a regular basis, these 2% plays are considerably simpler to catch. If you have commitment and a rigorous bankroll management plan, day trading crypto can earn you a fortune.
Those small-but-profitable trading chances occur often during the day. To minimize your risk and maximize your reward, keep your entry points as close to the trend line as possible.
To avoid being caught if the market collapses, place a stop-loss below this rising support level.
Candlesticks, Fibonacci Retracements, and Moving Averages are three basics to master for a successful cryptocurrency trading strategy.
What is Crypto CFD Trading and How Does It Work?
The term “contract for difference” (CFD) is an abbreviation for “contract for difference.”
You will not get actual coins if you purchase via a crypto CFD site. You’re buying a contract that’s backed up by the asset’s intrinsic worth. The market value is derived from GDAX, Gemini, Bitstamp, and Bitfinex, among other major exchanges.
For their services, CFD platforms charge a spread and an overnight cost.
The spread is a percentage rate that is applied to the price of the cryptocurrency you are trading. For example, if the spread is 2% and Bitcoin is $10,000, buying it would cost $10,100 and selling it would net you $9,900.
The overnight rate is the percentage you’ll pay to keep a position open until the following business day. Depending on the platform you use, the overnight charge may only apply if you have a short position.
Why Trade Crypto CFDs on a Day-to-Day Basis?
When you short cryptos, you earn in dollars.
You don’t have to be concerned about the exchange being compromised.
A single account may be used to handle all of your crypto assets.
That first element is often overlooked.
You cannot keep a fiat balance on certain cryptocurrency exchanges that provide leveraged trading. To go short on Bitmex or Poloniex, you must have crypto money on hand.
Consider the following scenario: With 2x leverage, you short one bitcoin for $10,000 on Bitmex. If the price reaches $5,000 and you close your trade, you’ve essentially used $20,000 and doubled your money. You doubled your bitcoins minus fees, but barely broke even since the price fell so much.
Simply stated, CFD trading cryptocurrency allows you to concentrate on growing your money. You’re lowering your risk of being caught up in the craziness of the crypto markets. When you do feel like trading, though, you may take advantage of the hyper-volatile market.
What are the Best Places to Trade Cryptocurrency CFDs?
We now suggest Plus500, eToro, and IQ Option as three trading platforms that provide CFD crypto trading.
Here’s a quick rundown of what each have to offer, as well as some advantages and drawbacks for each.
Plus500 offers a diverse range of cryptocurrencies to trade.
Prices are for illustration purposes only.
Plus500 is covered by the Financial Services Compensation Scheme (FSCS).
The Financial Services Compensation Scheme protects deposits of up to £50,000 if the business goes bankrupt for whatever reason (FSCS). Plus500 is a large publicly listed CFD trading company.
Start Day Trading Crypto Today With Plus500!
When trading CFDs with this supplier, 80.6 percent of retail investor accounts lose money. You should think about whether you can afford to take such a big risk with your money.
The FCA (#509909) has approved and regulated Plus500UK Ltd. The underlying assets are not yours, nor do you have any rights to them. Please see the Disclosure papers on the Plus500 website for further information.
eToro is a social trading platform that allows you to trade with others.
Social trading allows you to adapt an experienced trader’s approach to your own trading. Thousands of copiers are available to the finest crypto trading professionals on eToro.
For crypto trading, eToro does not provide leverage.
You may buy and sell crypto CFDs at 1x leverage on eToro. This level of risk needs no margin since it is fully supported by your account balance.
You may trade nine different cryptocurrencies on eToro:
eToro has a number of additional flaws that make it a poor choice.
The inability to set stop-loss orders is eToro’s greatest flaw. To safeguard your money, you must manually clock in and out of the transaction.
The pricing spread is another problem. While trading Bitcoin (1.5 percent spread) and Ethereum (2% spread) is acceptable, the other crypto CFDs have spreads ranging from 3-5 percent. You must also account for overnight costs, which apply when you are running low on cash.
Have you had enough? Take a look at the current trades that successful investors are making!
Are you having trouble getting started on eToro? Don’t worry, our knowledgeable guide will show you how.
The CySEC and the FCA both regulate e-Toro.
RISK WARNING: YOUR CAPITAL MAY BE IN JEOPARDY.
IQ Option offers a wider range of trading choices.
With 16 different coins to trade, IQ Option presently has the most varied assortment of cryptocurrencies. They sell Bitcoin Gold, EOS, OmiseGo, TRON, QTUM, and Zcash, among other cryptocurrencies sold on eToro.
IQ Option is a trading platform for binary options.
CFDs are still being purchased here. Don’t get tangled up in the jargon. You have the option of using a trade “multiplier” instead of “leverage.” You may utilize a 5x multiplier with IQ Option, allowing you to trade with up to five times your account amount.
Fees for IQ Options
For crypto trading, IQ Option imposes a fee of 2.9 percent.
Want To Trade Cryptocurrencies With The Largest Cryptocurrency Selection Of Any CFD Broker?
RISK WARNING: YOUR CAPITAL MAY BE IN JEOPARDY.
General Risk Warning: The company’s financial products involve a high degree of risk and may result in the total loss of your money. Never put money into an investment that you can’t afford to lose.
Using Leverage to Day Trade Cryptocurrency
Leverage trading allows you to purchase or sell coins with a larger investment than your account balance allows. The money is obtained via a low-interest loan. When you invest with a 10x leverage, every $1 you put in may purchase $10 worth of coins.
To say the least, this additional investment money is profitable.
A ten percent pricing fluctuation may either bankrupt you or quadruple your money.
If you make leveraged transactions, don’t jeopardize your whole account balance. If you choose to take a high-risk approach, make sure it’s just a small portion of your overall investing portfolio.
What exactly is “margin” in leveraged trading?
Simply stated, margin is the amount of money you must put up as collateral to obtain financing for a leveraged transaction. If you trade with 10x leverage, your margin will be 10% of the total amount you may trade with.
Putting a Stop-Loss Order in Place
Warning: Stop-loss orders are not available on all exchanges and CFD platforms. This trading feature is essential, but you also have the option of using a service like Coindera to set up price notifications.
For leverage trading to work in your advantage, you’ll need to prepare ahead. Many novice traders, for example, will utilize the stop-loss feature. This method allows you to choose when your assets are liquidated.
When the price falls below a key support level (when “longing”) or rises over a key resistance level (when “shorting”), a marker order may be immediately activated to avoid further loss.
After fluctuating far above and below this price-point, a coin’s price is now range-bound between $50 and $55. Regardless matter the direction, the following move will be explosive.
Let’s suppose you put a $50.25 10x purchase order and it’s fulfilled.
When the price rises to $55.28, your investment doubles.
When the price drops below $45.23, your investment is lost.
Due to unfactored borrowing costs, these numbers are not exact.
You’d place a stop-loss order at $49.99, which would then activate a market order if the price fell below that amount. As a result, if the strong support at $50 collapses, your trade will immediately liquidate. The highest available purchase offer will be used to sell your assets.
In the worst-case scenario, let’s suppose your coins sell for $49.75 due to some market slippage. Your loss would be about 50 cents per coin, or about 1% of the total value of the coin.
If this strategy resulted in a stop-loss order owing to the price dropping below a critical support level, your loss would be 10%. With the same amount of leverage, every $5.03 higher price movement will result in a 100% return. Intra-day trading may potentially earn you 2-3x gains if you catch a bull trend starting to form.
Don’t get caught up in the stop-loss trap!
In a perfect world, the example above would work. In the crypto world, though, it’s difficult to get enthusiastic about a decent entrance point. Stop-loss hunters will come after you.
What do these individuals do for a living?
Big players will “shake-out longers and shorters” by temporarily breaching support and resistance levels. The goal is to get rid of the individuals who are currently holding jobs prior to a major shift.
How to Avoid Being Targeted for “Stop-Loss Hunting”
Round numbers represent psychological levels rather than actual areas of support or resistance. When these levels are checked, you may discover some excellent entry opportunities. However, don’t be surprised if the price temporarily breaks through that level before quickly swinging in the other way.
Setting your stops below psychological pricing is a bad idea. If you get in at $50.25, you may want to set your stop-loss at $46.50 or even lower. If you trade with leverage, this strategy will not work, but for 1-5x leverage, it is essential.
How to Make $100s a Day Day Trading Crypto?
Are you ready to start day trading cryptocurrencies on your computer? Don’t rush things; there are a few things we need to inform you first. As an aggressive speculator, a $10,000 investment in day trading cryptocurrencies may provide daily returns in the hundreds of dollars. In reality, with the proper discipline, many intermediate-level traders may have very few loss days – the trick is to limit your risk exposure.
Two variables influence your capacity to successfully day trade Bitcoin and altcoins on a regular basis. If you understand how to master these two factors, day trading may become a highly lucrative full-time career. You must be able to manage your bankroll prudently while also catching, reading, and playing price fluctuations when they occur.
What is the Best Way to Day Trade Cryptocurrency?
Day trading cryptocurrency requires a high level of discipline and understanding. We will try our best to teach you, but bear in mind that this world is not something that can be taught in a day. To succeed as a day trader, you must be committed.
With that in mind, let’s go over some essential groundwork…
How to Become a Day Trader
Trading is, without a doubt, the most thrilling aspect of the whole experience. Being a successful crypto day trader, on the other hand, requires more than simply understanding how to locate the correct deals. Before you begin trading, you should evaluate your risk management and make plans for it.
Before we get into the strategic stuff, let’s go over the fundamentals.
1. Setting Up Your Bankroll
First and foremost, we must determine how much money you have available to devote to your day trading budget. Your choice should be based on how much money you can afford to lose. Don’t expect to lose everything, but go into it with the mindset that your money will be inaccessible to you for the rest of your life.
Every trading day, it is your duty to protect your investment and concentrate on increasing your money. Your crypto investing fund does not have to be made up entirely of day trading money. Many day traders maintain long-term positions in specific currencies, whether it’s an altcoin from a promising ICO or one of the bigger cryptos like Ethereum.
Your account must be funded…
For the sake of this tutorial, let’s assume we’re playing with $10,000.
Bitcoin may be purchased from a variety of places. Coinbase and LocalBitcoins are two popular options for newbies. Take your Bitcoin and deposit it on the exchange where you want to trade.
Make sure you double-check the deposit address before submitting it. Also, be sure it’s for the cryptocurrency you’re attempting to deposit, since transferring money to an incorrect address may result in them being lost.
2. Determine your level of risk
Risk tolerance varies from person to person. For some, the deciding factor is whether or not their capital can be replenished. Will you spend another $10,000 to play if you go totally broke? Sure, you could wait six months — don’t go into debt to keep trading; that’s gambling — but consider if you’ll abandon crypto trading permanently if your investment fails.
If that’s the end of the game for you… Protect your money at all costs.
Understand This Before You Begin…
For a novice, day trading cryptos with smaller market capitalization is risky. However, by making this “risky choice,” you get access to coins with enormous upside potential. Your task is to read the play and choose which entrance will put you in the least amount of danger. With tight stops in place, you may gain a lot of upside without incurring a lot of risk.
You may safeguard your money in a variety of ways. To begin, segmenting your account and just trading with portions (10-20% chunks, for example) will minimize your risk of losing money (and also limit your gains). Second, and maybe more difficult, you can securely enter positions with 100% of your money by playing the correct entry with effective use of stop losses, trailing stops, and other techniques.
3. Be aware of risk-to-reward ratios
There are a plethora of extremely lucrative trading settings. Calculating their risk-to-reward ratio is the key to determining their prospective investment worth. This number represents the potential profit or loss you might make if you make a certain transaction. A risk-to-reward ratio of 1:3 may result in a profit of $300 or a loss of $100. Meanwhile, a risk-to-reward ratio of 3:1 indicates that a $300 loss is conceivable in exchange for a $100 return.
Here’s another way of looking at things…
Assume you have the option of choosing between two distinct transactions.
Trade 1: Buy at $100 with a limit sell at $140 and a $90 stop loss.
Trade 2 – Buy at $100, sell at $120, and stop at $80.
Which profession should you pursue?
On a $100 transaction, Trade 1 has a possible profit of $40 and a potential loss of $10. This results in a risk-to-reward ratio of 1:4. You may make mistakes with these bets; but, you must win more than 20% of your transactions.
On a $100 transaction, the possible price change in Trade 2 is $20 in either way. A $20 profit/loss is conceivable, resulting in a risk-to-reward ratio of 1:1. Trading with the chances of a coin flip is no different from playing blackjack in a casino.
These “risky moves” may seem tough, but it all comes down to time. You must see a “breakthrough” or “trend reversal” as soon as it occurs and respond quickly. Because the coin’s upward momentum is buffering the price from a large drop, they are really fairly safe trade chances. Furthermore, any genuine breakout will provide enough purchasing pressure to propel the price much higher.
Day trading is all about detecting signals and profiting from the volatility of the market. Your account balance will undoubtedly grow if you keep an eye out for imminent price increases and scalp for large gains on a regular basis. Never marry a coin; instead, consider it as a mathematical problem to solve and assess the trading arrangement!
4. Decide on an exchange
Cryptocurrency exchanges differ in terms of trading choices, security, volume, and other factors. The question of “which coins should I buy?” should not be your first consideration. Instead, concentrate on identifying the exchangers that provide the features you need and ignoring those that are not completely trustworthy.
When deciding between trades, keep the following in mind:
Are you investing in actual crypto or CFDs? CFD systems monitor real-time exchange prices, but they can’t be used to buy bitcoin. The costs on these exchanges are higher, but they provide a better degree of security. They’re not advised for day traders; stick to crypto-to-crypto and crypto-to-crypto exchanges alone!
How much do they charge for trading? The majority of bitcoin exchanges will charge 0.1 percent to 0.2 percent, if not more, each transaction. Binance, the most popular cryptocurrency exchange, presently costs 0.1 percent in trading fees, but provides a discount if you pay using “Binance Coin (BNB)”.
What kind of altcoin listings do they have? It’s all about identifying chances when you’re a day trader. If you can’t choose among a large number of coins, you’re likely to miss out on all the excellent scalps. Binance is presently our favorite since not only are their fees very cheap, but they also offer a large number of cryptos and a high trading volume.
Is there enough trade volume to create possible slippage? You may decide to invest in a cryptocurrency exchange with low volume. Even though the large market cap coins are regularly traded throughout the day, the mid-level selections (sluggishly) follow other exchanges… They don’t pay attention to trading indications. If a cryptocurrency breaks out or receives a lot of publicity, trade it on an altcoin exchange with a consistent volume of activity.
If Bitcoin collapses, will you be able to sell your BTC for fiat? Knowing how to detect market emotion and act on it is an important element of risk management. Focus on low-risk transactions when Bitcoin is going down in the near term (but not collapsing). As altcoins grow more bullish, increase your risk exposure. When alts aren’t flourishing, it’s possible to lose a lot of money on “choppy transactions,” so sit out in fiat (preferred) or USDT and stay away from alts during collapses, instead waiting to buy back or short BTC. To be secure, make sure the exchange you choose offers fiat or USDT crypto pairings.
Terminology on TotalCrypto.io
Alternative cryptocurreny, often known as Alt or Alt Coin. Any cryptocurrency that isn’t Bitcoin is referred to be this.
Do you need assistance getting started on Binance? Everything you need to know is in this fantastic guide.
If you’re prepared to put in the additional effort to obtain your money on an exchange, Binance is the way to go since the fees are so cheap. The traffic is soaring, and the coin selection much exceeds that of other exchanges. On the coins exchanged here, price fluctuations are frequent and severe. Day trading at Binance is simple money if you know how to capture a surge at the appropriate moment.
Binance’s main flaw is the absence of a leverage trading option for any of its currencies. Once you reach the expert level, we believe this is an essential trading feature. It’s not always possible to gamble on a bullishly volatile cryptocurrency market… You have to gamble against the house every now and again.
In fact, holding an alt from January to June saw BTC decline by more than 60% from its high. Many alts followed suit. Just by “hodling” your investment since the beginning of the year, a $100 alt became $40 ATH BTC, equating to $16 left (an 84 percent loss). That’s a very simple yet eye-opening calculation.
Bitfinex and Bitmex are the finest exchanges right now for crypto to crypto leverage trading. Bitmex is simple to use, but Bitfinex needs new users to have at least $10,000 in order to trade. If you can go into Bitfinex, though, you’ll have access to a broader range of currencies. Although the maximum margin level is smaller, Bitmex’s maximums remain dangerously high.
Binance (no leverage), Bitfinex (yes leverage), and Bitmex are the winners (yes leveraged)
Bitmex offers CFDs for its altcoin-to-BTC pairings but no actual BTC liquidity. Bitcoin is the only currency that may be deposited and withdrawn. This implies that even if you’re betting on the currency falling in value, you’re entering a short in BTC. Your long positions, on the other hand, are financed with BTC, which means you’ll make more money.
You now know where to begin…
Day Trading Strategies for Cryptocurrencies (That Work)
Are you ready to go live as a savvy crypto day trader with your money uploaded? If that’s the case, it’s time to devise a trading plan. It’s good to experiment with different methods and to be adaptable, but certain trade settings simply seem to perform better than others.
Here are some day trading methods for altcoins and Bitcoin to consider…
Scalp Small Moves, Catch Big Spikes! Strategy 1 – Scalp Small Moves, Catch Big Spikes!
Whether coordinated or not, you may observe that a coin with a smaller market value is showing indications of a significant increase in the near future. Having the ability to capture these moments may result in increases of 20-200 percent in minutes to hours. In fact, if you know how to do it correctly, this approach may be a goldmine.
Make an informed decision while selecting an exchange.
Make sure you trade on an exchange where many of the altcoin pairings receive significant activity on a regular basis. This basic is critical since any possible, big pump requires consistent day trader volume on the site. It’s also a big part of daily price movement, and it’s where you’ll find a lot of your low-risk scalps for 1-5 percent profits.
Trading on a higher-volume exchange means you’re more likely to be ahead of the pack, with enough liquidity to enter and leave without significant slippage. When purchasing an inflated currency on eBay, you may find yourself trapped holding your luggage.
Find the appropriate coins.
There are a variety of methods that may be used to locate these coins. To get a sense of how the professionals do it, check out our guide to comparing currencies. Any day trader, on the other hand, may perform well if they keep track of both the news and the current developments in different inexpensive alts.
Look for currencies that are moving bullishly toward the top of their trading channel and approaching a resistance level. On a weekly chart, the golden setup is an upward breakout from inside the handle of a “cup & handle” pattern formation. Additionally, verify that the volume is greater than it has been on most days in the last several weeks or longer.
Purchase at the appropriate time
If everything seems to be in order, buy the breakout and place a tight stop loss a little below it. Alternatively, wait for it to rebound once it has moved up. Most of the time, a resistance breach triggers the #1 Elliot wave, which has a pullback and finds support around the breakout price before flying considerably higher as panic buying kick in.
Pro tip: As of June 2018, when a currency sees large volume trading across short time periods, Binance’s latency is extremely apparent. This seems to be a problem mainly for desktop users; trade via the Binance app to avoid the latency. Your stake will be liquidated sooner if everyone begins panic selling. As a result, your losses will be reduced and your profits will be increased.
These pumps may be profitable, but you should only utilize a tiny portion of your day trading budget to benefit from them. If you purchase inexpensively and can afford to place a tight stop below the breakthrough price, you can raise your budget.
Sell for the best possible price.
Let’s suppose you purchase at a great entry point and the price seems to be on the verge of a strong upward trend. To put a limit sell order, look for a faraway price in the order books. This is your “Hail Mary,” and it’s effective!
Here are a few instances of purchasing unexpected pump breakouts and profiting greedily.
This is a real-life example of a transaction.
I purchased for 5100 satellites and sold for 7,900 satellites.
I was only there for 5 minutes and 17 seconds.
My five-minute trade netted me around $6,600!
I traded POA currency for the first time on this day. It was, in fact, the first time I had heard of the currency. Before looking into the currency for news, value, or valuation, I like to go over each of the coin pair listing sites and check how the price movement and order books appear.
POA’s potential for rapid growth drew my attention. The currency just broke to the upside from a long-term cup and handle pattern, which I observed. This move is one of the most bullish pushes any market could possibly witness.
I usually check TradingView to see what other people think and if there’s any buzz around a call that seems to be a no-brainer. When I looked at the historical data more closely, this graphic appeared in my study and confirmed my own findings.
Tradingview.com provided this image.
This transaction took place while Bitcoin was trading between $6,600 and $6,800. In only three weeks, the price double-bottomed in the low $6,000s and jumped over $9,000, signaling a turning point. Breaking over the handle on this chart resulted in a nice 50 percent price increase for POA.
These beautiful moments significantly enhance your wealth. When it comes to earning possibilities, you’ve opened up a whole new world. It’s always worth it to perform a fast double up. Even if you just risk 20% of your money and earn a 100% return, that’s still $2,000 profit on a $10,000 investment.
In the best-case scenario, $10,000 profit if you went all-in with a tight tight stop (5%). Your bankroll increases by twice as much for every ten percent profit you make on your following transaction. If you lose, you’ll only lose around 5% of your money, which is a bit looser than the “safer” bets out there.
A Few Words of Trading Advice
Surprisingly, you don’t need to look for a coin that will become a billion-dollar cryptocurrency. Day trading is more about following the market’s rhythm than it is about determining asset worth. Guys, this is a crucial thing to comprehend!
Since the last screenshot…
The coin in the above-mentioned play fell more than 20% below my entry price. The price of Bitcoin is now in the same range as it was back then. Even while it was a very bullish move, it does not guarantee that it will continue indefinitely. Due to the insane volatility in the altcoin markets, it’s best to play the action as it occurs (scalper mindset 101), but avoid holding the currency overnight.
Below is another big winner.
I sold for more than 60% more than my entrance price in less than an hour. This was a “gut feeling” deal, which is OK provided you have stops in place and play the action manually the whole time you have the pushed coin.
Don’t pursue pumps all the time; only do so when you think you’ve seen the next double-up before it occurs. In the same day, GRS almost tripled my initial buy-in price, making it difficult to predict the peak.
Be greedy while being technically sound in your argument. There were several medium-sized sell orders in the 30-40k satoshi area, while the 20-25k zone saw some sales and a 25k sell well, with the 25-30k range being empty.
If the price rose suddenly, it seemed that my sale would be successful. I got it when the price settled down following a false pump when the currency was posted on Binance, which added to the flames.
Play Trading Channels with Leverage (Strategy 2)
Trading channels predict where the price will go before a significant breakthrough or collapse. The background noise is easily discernible. It’s simple to scalp 1-5 percent gains everyday trading certain alts if the trading channel isn’t too tight (common when a breakthrough isn’t close).
These arrangements aren’t pretty; they’re practical. Let’s suppose the trading volume of a coin is decreasing as it approaches the top of a trading channel. It will most likely make a lower peak than previously and look for its next low (within the channel).
Trading Bitcoin with Leverage in Price Channels
Tradingview.com provided this image.
Day trading Bitcoin is a popular method to make money because of its high liquidity and unpredictable price movement. However, relying only on your account balance will not increase your daily earning potential. Trading on margin improves your risk-to-reward ratio without requiring you to chase bigger price movements.
Let’s suppose you’re trading with a 10x leverage in a 5% trading channel. On average, every 2% price change represents a possible gain or loss of 20%. By predicting a 2% scalp five times in a row, Bitcoin day traders employing leverage may more than quadruple their investment.
Finding volatile scalp trades on margin in a safe manner
The difficult aspect is deciding where your stop loss should be. Technical analysis will be used to make this decision: how is the volume playing out, where are the supports and resistances, and so on.
Invest in crypto signals that are supported up by technical analysis.
Terminology on TotalCrypto.io
Technical analysis is a kind of financial research that employs patterns in market data to identify trends and predict market movements. The term ‘technical analysis’ is often abbreviated as ‘TA.’ Check out our full guide on TA and discover how you can use it to forecast crypto markets if you want to brush up on or learn more about it.
The Cryptocurrency Signal Finder Tool from TradingView will tell you all you need to know about the top cryptocurrencies. You may use this tool to monitor a variety of indicators, including price highs/lows depending on time intervals, moving averages, Bollinger bands, and more.
TradingView.com provided this image.
This tool’s capabilities are really limitless. Because you must develop tactics based on particular data points, the learning curve is high. Not every strategy will succeed, but there will be some big winners. It’s also a fantastic place to go if you want to understand everything about technical data and how it may help you make better trades.
Notice the “General” option in the horizontal menu’s selection box on the far right side? When you do this, you’ll be presented with more than a dozen prediction factors. “Top Gainers (and Losers),” “Outperforming/Underperforming SMA50,” “Most Volatile,” and “Oversold/Underbought” are some examples.
The section on “Trend-Following” is very useful. SMA20, SMA50, SMA200, BB UP, and BB LOW default filters may be found here. We’re looking at price data points that represent the current trading channel in which the currency is moving.
Identifying a trend allows you to make a large number of scalps at 2%, 5%, and higher with little risk. The trend-based filters are very helpful, with features such as “Bull Bear Power,” “Average Volume (10/30/60/90 day),” and “Volatility by Day/Week/Month.” Another reason to keep a close eye on these indicators is to be able to anticipate and prevent hazardous volatility before it occurs.
TradingView may be difficult to grasp at first. When you learn how it actually works, it becomes a game-changing tool. Take the time to study the various controls, watch some video lessons, and continue to improve your TA trading skills.
Without using leverage, you may play Bitcoin day trade setups.
An extract from “The Basics of Day Trading Cryptocurrency” is provided below.
As shown, assuming your bankroll grows at a rate of 2% each day, you may convert $5,000 into $25,000 in only three months. This is a perfectly reasonable goal, but we don’t suggest chasing a set profit every day since it may affect your trading decisions.
Remember that the example above requires 84 consecutive days of profitable day trading. Even the most successful traders have terrible days when they lose money. Any day when you lose 2% of your trip adds two days to your journey in the provided example.
Concentrate on maintaining a disciplined trading approach. Don’t get caught up in the market’s emotions if you want to pursue 2% gains. Irrational behavior may strike at any moment. Unless major news breaks, a steady strategy is your best bet.
Good luck with your trading!
The topic of cryptocurrency day trading is vast.
There are so many diverse methods to enhance earnings, minimize losses, and protect your money that no single website can teach you everything. The trick is to take in all of the available information and interpret its correctness in a logical manner.
We’ve been putting in a lot of effort to get all of the essential information up on our website. TotalCrypto’s mission is to become a one-stop shop for authoritative guidelines and articles on crypto markets, particularly in the area of trading.
There are a few more articles on our site that may be of use to you. Before investing a penny in Bitcoin or altcoin day trading, we highly advise you to read our technical analysis tutorial for cryptocurrency day trading.
Make an effort to educate yourself, keep track of your progress, and learn from your errors. Maintain your investing money by being diligent and enforcing risk control. Cryptocurrency day trading may make you anything from $100 to $500 each day. If you keep working hard, your bankroll and daily profits may more than tenfold!
DISCLAIMER: The activity of the cryptoassets discussed in this paper is uncontrolled. This post is not intended to provide financial advice. Always do independent research.
The bitcoin 101 pdf is a beginner’s guide to day trading cryptocurrency. It includes information on how to buy and sell cryptocurrencies, as well as the basics of what cryptocurrency is.