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How to Day Trade Crypto: Practical Guide


How does cryptocurrency day trading work, and how to day trade crypto? In this article, you will find a practical guide on this matter.

One of the most popular trading strategies, the term 'day trading', originated in the stock market and is a type of short-term trading that involves entering and exiting buy positions on the same trading day.

In other words, it means a trading style that involves trades that are sold and bought on the same day. Sometimes this strategy is also called 'intraday trading'.

The goal of day traders is to use intraday trading strategies to make profits from the price fluctuations of a particular asset or financial instrument.

Day traders are active in most financial markets: from stocks to forex, commodities, and of course, cryptocurrencies. In the following lines, you can understand this a little further.

What You Need to Know About Day Trading Crypto

For you to make a profit with day trading, two market conditions must be present:

  • Liquidity: Traders must be able to enter and exit trades quickly, without prices fluctuating too much.
  • In a market with slippage, low liquidity, when a large position cannot be liquidated at a price desired by the trader, the trader's profits can disappear.
  • In the case of slippage, large positions must be sold in increments, where each order has a lower price than the previous one, which generates fewer overall profits when the whole position is sold;
What You Need to Know About Day Trading Crypto
  • Volatility: When prices do not move, and there is no possibility to buy at low prices and sell at soaring prices, there is a lack of volatility in the market. For volatility to occur, markets need to go up and down on a short-term basis, as day traders usually try to buy and sell during the same day.

Day Trading Crypto Strategy Guide

Day Trading Crypto Strategy Guide

There are a few strategies you should follow in order to know how to day trade crypto. Mainly if you are among those who are interested in day trading,

Here are some strategies for you to know how to day trade crypto:

1. Learn How the Cryptocurrencies Technology Work

In case you want to know how to day trade crypto, specifically Bitcoin, you must know a little bit about how the technology works.

For example, if most miners sell their coins as they mine, downward pressure on prices could increase for a while. This is how Bitcoin mining for itself could play a role on the market;

2. Technical Analysis (TA)

Technical Analysis consists of using mathematical indicators and chart patterns to try to find out how the props will move in the future. While some technical indicators are generated with computing programs, others are identified by humans who look at charts and analyze them;

 3. Range Trading

It is the assumption that prices often move within a determined range. Such strategy involves the analysis of candlestick charts and support and resistance levels.

Traders observe price ranges in the market structure and create trade insights based on these price ranges. When a price ranges between the support and resistance level, the trader can buy at the support level and sell at the resistance level;

4. Scalping

Scalping is nothing more than taking advantage of the small price fluctuations that occur over short periods of time.

Such price movements can be liquidity "gaps", differences between supply and demand called bid-ask spreads, and other financial market inefficiencies. Trades performed with scalping are usually made on margin or from futures contracts;

5. Consult a Crypto Signals Provider

Are you not sure whether day trading is the right strategy? Do you still have doubts about how to day trade crypto? So, you can take advantage of the services of crypto signal providers.

There are a wide variety of crypto signal providers. Those are services provided by a group of Expert traders and analysts who offer various recommendations on whether it is the right time to purchase, sell or trade cryptocurrencies to increase profits.

Consult a Crypto Signals Provider

Fat Pig Signals is a crew of expert analysts who monitor markets and trends 24 hours a day. By doing this work, they are more than accurate to send daily trading alerts with precise information about:

  • Entries;
  • Exits;
  • And stop loss placement advice.

Do not hesitate to visit their web page to learn more about their services. And how about you? Do you know how to day trade crypto? Leave your comments below!


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