How to Day Trade Cryptocurrency

One word most commonly associated with cryptocurrencies, especially by investors and “experts” who do not consider cryptocurrencies as viable investment assets, is “volatility”. They say it’s an asset that is purely speculatively driven, or that it could be devalued if only one major player sells a majority stake in Bitcoin to create a snowball effect. I will tell you.

What these people are unaware of is that volatility is the bread and butter of cryptocurrency day traders. If you want to enter this very lucrative and exciting market, there are a few things you need to know.

What is Cryptocurrency Day Trading?

The term “day trading” is taken from the stock market where traders enter and exit investment positions on the same trading day. Day trading is fundamentally different from investing in which investors hold investment assets over the long term and use a “fundamental analysis” of the investment assets to predict growth.

Cryptocurrency day trading is the same. Traders are looking for cryptocurrencies that are highly liquid (which essentially means they are easy to buy and sell) and have high trading volumes. The larger the volume, the more many of the cryptocurrencies are changing hands. With so much activity, traders find it easy to buy and sell assets, but they make money primarily from crypto volatility. It involves trading by predicting how quickly prices will fall and rise (if you can predict accurately, you can make money in both directions).

If you want to day trade cryptocurrencies, you need to accumulate considerable knowledge and market experience before predicting the same day trading pattern. Expert day traders primarily employ technical analysis to make important trading decisions using chart patterns, technical indicators, price actions, volumes and sometimes news.

Bitcoin is a form of digital currency, created and held electronically. It’s the first example of cryptocurrency—an asset that relies on cryptography to generate money and verify transactions as well as control the creation of new units. You can buy bitcoin in two ways with CommSec – via an online market or through an order book. If you’re looking for more information about how to invest in crypto, check out our blog post “How To Buy Crypto With CommSec.”

Where can I trade cryptocurrencies?

If you understand how cryptocurrency prices go up and down, and how to make a profit by opening a position (buying a crypto) and closing that position at the right time (selling a crypto). The next major step is to choose the right crypto trading platform, like CryptoInvestor

There are a few things you need to look into.

  • Transaction costs: Some trading platforms charge a flat rate, while others may make money from the “spread” of crypto exchange.
  • Security: Since crypto is a digital native asset and there is no concrete product to back it up, security is of paramount concern when day trading crypto. Make sure the platform you choose takes the security of your digital assets seriously.
  • Updated easy to use: If you are new to day trading, overly complex platforms can hinder your trading activities. Make sure the platform is easy to use and provides updated information.
  • Various crypto assets: If you want to trade cryptocurrencies other than the most common ones, you need to choose a platform that offers a wide variety of crypto assets.
  • Reliable: If you want to reinforce or validate your trading decisions compared to other trading professionals, you need a platform with credible insights and advice.

It’s worth considering a few other things, such as the exchange rate and the cost of buying a cipher along with another cipher.

Day trading crypto strategy

There are several day trading strategies that crypto traders may adopt. The three most common are:

  • Range Trading: Range traders make trading decisions based on predicting two different price levels of cryptocurrencies. Predict the “range” of high / low patterns.
  • Take advantage of small price fluctuations: This strategy is also known as scalping. Day traders who follow this strategy look for liquidity gaps and sometimes spreads between bids and asking prices.
  • High Frequency Trading / Algorithm Based Trading: It can be too advanced for novice traders as it relies on algorithm creation and bot training to get in and out of positions within a few milliseconds.


Unlike investing, trading is something you can’t do without a complete understanding of the market first. If you want to trade crypto, make sure you have a deep understanding of blockchain and focus on a limited number of cryptocurrencies in the early stages. Before actually connecting money to the market, it is advisable to gain experience in “simulated crypto trading”.

How to Day Trade Cryptocurrency Source link How to Day Trade Cryptocurrency

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