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Day Trading Cryptocurrency

Can You Make A Living Day Trading Cryptocurrency?

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The volatility of Crypto leaves many opportunities for profit with day trading. You can have success using methods such as News Trading, Range trading, Scalping, and High-frequency trading, to name a few.

 

What is Day Trading?

Day trading is a skill which entails buying and selling of stocks, securities, foreign exchange, and Cryptocurrency to make a profit at the end of the day’s market.

The forex market is open for 24 hours a day and 5-days a week. This is the process day traders follow every day, they don’t have the mindset of investing in a stock for the long-term, they deal with short-term profit. 

Discipline and strategy is an essential virtue of a day trader as they often need to make quick decisions based on the fluctuations of the market. Day Traders rely a lot on the volatility of these stocks; they take their profits in bits till the end of the day.

Gone are the days when trading is associated with only financial institutions. With the increased advancement and civilization the world has experienced, the stockbroker has created a more accessible avenue for small-time investors or traders to join the game.

 

Do Day Trading Rules Apply to Cryptocurrency?

Day trading is the same for all markets, be its foreign exchange, stocks, securities, or Cryptocurrency.

The Same rules of trading apply to all of them; Cryptocurrency is very volatile and therefore makes it very suitable for Day Trading. But with every advantage comes a disadvantage.

A trader needs emotional self -control, more self-discipline, and a strong focus on your strategy to trade.

A Crypto day trader must handle training as a daily job more like an employee.

A little loss of focus can result in you losing your money due to the high volatility of Cryptocurrencies. The intense fluctuations of Cryptocurrencies can, in short lead to more profit or loss.

To become a professional trader who can make a living from daily Crypto trading, you need to educate yourself about all essential aspects related. This can be achieved through the reading of books and studying the marketplace. 

How can I Day Trade Cryptocurrency?

There are many strategies and analytical tools day traders employ in their daily trade. These strategies include:

 

News Trading 

News Trading is perhaps one of the most straightforward and most popular techniques used by most day traders. It involves making trades based on reliable news releases.

There are specified times news is released for top currencies; News trader places a lot of importance on this news.

This doesn’t mean this news always have an effect on the Crypto, but most times, they influence the market.

 

Range Trading

Range Trading is one of the most basic techniques all traders possess when trading.

It is an efficient strategy and can be solely used for trading but may work with procedures such as trend following and breakout trading.

This strategy works with two central regions called the “Support region” and “ resistance region.”

A boundary is selected in the support and resistance region, which implies that the trader intends to buy when the price is at support region and sell when the price is at the resistance region.

 

Scalping 

The Scalping strategy is employed by both beginner and professional traders; it involves opening and closing of trades within a short time.

The plan aims to make a small but steady profit the later add up to a larger one in the end. This strategy works with keeping trades for just some seconds or minutes.

This strategy assures early accumulation of profit from the market; once the market moves in the trader’s favor, the traders close position very quickly.

This strategy requires concentration and patience to increase the chances of success. Traders that work with this strategy usually make use of tools like RSI, pivot points, moving averages.

 

High-Frequency Trading

A High-Frequency Trading strategy is mostly employed by experienced traders. It involves making use of complex technical analysis tools and sophisticated software, to take profit from short-term market fluctuations.

Recommended Crypto Tools

 

What is the Best Cryptocurrency Exchange for Day Trading?

There are no perfect Cryptocurrency exchange trading platforms, you can only select exchanges based on what you need and what the exchanges have to offer.

Most exchanges have a selected number of Cryptocurrency you can trade on them. This means you have to choose the one that has the Crypto you wish to trade.

Due to the high volatility of the Cryptocurrency market, day trading can be a very lucrative strategy for trading with Cryptocurrencies.

Cryptocurrencies experience fluctuations in prices than the traditional stocks, therefore, making it a focal point for most traders. There are a lot of several exchanges online which offers Cryptocurrency day trading options.

To select an exchange for trading Cryptocurrencies, some factors must be considered. This factor includes:

  • Quick access to funds
  • Service fee applied
  • Charges applied to trades
  • If the interface is user-friendly 
  • Cost factors, for instance, trading spreads,  deposits, and withdrawals charges.
  • The Cryptocurrencies you can trade on them

Here is a list of some Exchange for Cryptocurrency day trading: 

BinanceBinance supports Trading of 200 Cryptocurrency and allows deposit through the use of Credit card and Crypto exchange. This is the second-largest Crypto exchange and also offers low transaction fees.

CoinbaseCoinbase allows Trading of 5 Cryptocurrency and allows payment through all accepted mode. This is the world’s biggest and most recognized crypto exchange with its service available in the United States, Canada, and the majority of nations in Europe.

We also highly reccomend Coinbase. You can read our full review of Coinbase and learn how you can earn free crypto as well.

BitmexBitmex is a popular exchange and allows Leverage and Margin trading.

ChangellyChangelly offers the option to exchange 104+ Cryptocurrency on its platform and supports all for of deposit (Wire transfer, Credit card, and Crypto). 

We highly reccomend Changelly. Be sure to read our full review of Changelly.

Yes, Changelly is more of an exchange than a trading platform but you can exchange many different cryptos across multiple exchanges which can be helpful. If you want to exchange altcoin’s quickly across platforms to capitalize on an opportunity.

 

Is Day Trading Bitcoin Profitable?

Bitcoin trading is one of the hottest trading markets. Trading Bitcoin with a planned strategy, a positive mind, and self-discipline is very profitable.

Studying the marketplace, Bitcoin is perhaps the best place to trade over most coins in a Cryptocurrency.

If you are interested in other ways to earn Bitcoin take a look at our article called, “How to Earn Bitcoin | Little to No Investment Needed.”

 

What are the Qualities a Day Trader must Possess?

Trading cryptocurrecy can be intimidating for sure. If you are thinking of getting into trading cryptocurrency you should focus and be comfortable with the following:

 

Strategy

A good day trader must work with an efficient approach which gives the trader an edge over the rest of the market.

Some of these strategies have been discussed above.

If you are new to trading Bitcoin or cryptocurrency consider a service like Signal Profits that utilizes professional traders and pushes trading signals to you.

 

Discipline

No matter how effective a traders strategy is, without restraint, the trader stands on the edge of losing all investments.

A day trader must learn to stick to their own approach and not jump to others; they aren’t well vast in just in the name of making more profit.

 

Knowledge of the Marketplace

A good day trader must understand how the market works. A day trader must understand the effects certain news or analysis will have on the market.

Without this skill, you are not likely to survive for a long time as a day trader.

 

Capital

For every trader, you have to invest your equity before you can trade. For a day trader, you intend to make small profits on trades;, therefore, a day trader might need to invest sufficient money in a trade.

If a deal fails, as all trades involve the risk of losing your capital, a day trader must be able to invest more money.

 

Final Thoughts on Day Trading Cryptocurrency

Day trading is a business like any other business, and it can serve as a steady source of earning to full-time traders.

But, this doesn’t mean it is the right business for everyone. We all have different skills, talents, attractions, and things you enjoy and love to do.

If the knowledge of the market interests you, then this might be the right business for you, and with proper research and self-discipline, you can make a considerable profit from there.

Make sure you have the proper tools to help you and your crypto remain safe and secure. To help we have a short list of our recommended tools for crypto that have been battle-tested!

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