Best DayCoin Crypto Day Trading Strategies

Crypto day trading has been a common form of trading among traders in recent years, especially among those active in the financial markets. But what exactly is cryptocurrency day trading, and what are the best strategies to move forward in this type of trading?

What is crypto day trading?

Crypto day trading is a form of trading that involves going in and out of a position in the market on the same day. Some call it “intraday trading”, as trades are usually opened and closed within a day.

Day trading in cryptocurrencies is about profiting from small market fluctuations. And since cryptocurrencies are quite volatile, day trading may not be a bad idea. A typical stock or commodity that sees a value increase of 10% in a single day is small, but such peaks happen all the time in the crypto market.

Day trading has many benefits. For example, you avoid the complexity of buying and selling cryptocurrencies, and quick gains can even be achieved by investing in short-term exchange rate fluctuations. Let’s take a look below at some of the best approaches to day trading with crypto.

Best day trading strategies with crypto

Crypto day trading can be very profitable, but there are trading strategies and risk management rules to stick to if you want to get out of a trading day with tangible profits. These strategies are not necessarily complicated; As long as you diligently use the right approach, you should see positive results.

1. Arbitrage Arbitrage has a long history and with good reason. It is widely implemented because it is both proven and relatively simple. All you have to do is buy one coin on one platform and sell it on another, and take advantage of the price difference between the two.

For example, at the time of writing, the price is $ 29,840.89 on Binance and $ 31,602,445 on Coinbase (NASDAQ :). If you buy 1 BTC on Binance and sell it on Coinbase, you will take home the difference as a profit in minutes and without technical knowledge.

Arbitrage, however, has its drawbacks. For example, fees, ie withdrawal fees, are sky-high on most platforms, so if you do not move a significant volume of cryptocurrencies, you will lose a large part of the profits to withdrawal fees. Therefore, in order to make it work for you, you need to take note of the precautions you need to take while trading with arbitrage.

2. Scalping Scalping is similar to arbitrage in some ways, except that in scalping you stay on one platform and earn at a higher trading volume. In scalping, you end trades minutes after you have entered them for the purpose of making small profits in the process. Traders who use this approach make anywhere from ten to hundreds of trades daily, believing that smaller price changes are easier to catch than large ones.

A scalper aims to detect small increases, so he is always found to “scour” the market for small gains. Below is a hypothetical example of a trader who through scalping profited from price changes on stock X, which originally traded at $ 7.

The trader bought a large number of X shares, for example 30,000, in the hope of a small price increase later. A few hours later, the stock rose to $ 7.05, and the trader immediately sold his shares, making a profit of $ 1500 for himself.

3. High-frequency trading HFT is a type of algorithmic day trading where quantum traders use trading robots and algorithms to get in and out of the market quickly. Market fluctuations in crypto trading happen in an instant, so traders use computers programmed with intricate algorithms to detect and profit from these rapid fluctuations. Their systems monitor and analyze real-time cryptocurrencies across many exchanges to detect trends and other trading triggers.

The only drawback is that building such robots requires a deep understanding of computer science and mathematics and a deep understanding of complex market concepts. As a result, this approach is used mainly by skilled traders.

4. News and sentiment analysis This strategy is similar (but not entirely) to technical analysis because it involves forecasts. It differs because it is based on human reactions and behaviors rather than price movements. Day traders use this method to predict whether the demand for specific cryptocurrencies will rise or fall by examining a variety of information sources to measure the social consensus about the currency and predict people’s actions.

There are many tools and sources from which useful sentiment analysis data can be gleaned. Press, social platforms, customer service telephone center data, customer feedback, public information, employee interaction data and electronic health records are all examples.

5. Range Trading The spread between the lower and upper prices of an asset over a given period is referred to as the range.

Therefore, range trading is a simple strategy where the analysis of candlestick charts is used to select a suitable area that a trader can buy in and buy out over a short period of time. Support and resistance levels are used in range trading.

If the price varies between two support and resistance levels, a trader can buy the support level and sell the resistance level. Conversely, they can sell short at the resistance level and finish at the support level.

Traders usually rush to buy companies’ shares when issuing fantastic earnings reports. This then drives their stocks to reach new heights. But when the hype disappears, demand is usually not solid enough to maintain peaks, so stocks begin to trade a little lower. Over the next few weeks, the stock may trade between the current month’s high and the previous low.

So if a trader thinks the stock will stay within a certain range for the next, for example three weeks, they can buy the stock when the price falls close to the lowest and sell around the highest.

Conclusion

Crypto day trading can be profitable for those who are ready to learn and implement measures. To act well, you need a delicate balance between technical analysis, news analysis and common sense, and it can be difficult to find such a balance.

However, there are several things you can do to make day trading easier for you. For example, everything can be automated. You can create a cryptocurrency trading bot to execute your transactions 24 hours a day, seven days a week.

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