Added: 29.07.2019
Edited: 27.01.2022

Day Trading Cryptocurrency: Full Guide + 8 Vital Tips in 2022

Day trading cryptocurrency is a process that involves legal buying and selling a variety of financial instruments throughout the day.
Successful trading also involves the use of thoughtful strategies like Scalping, Reverse trading, Momentum trading, Fading, Buy Dips and Hold, Range trading to achieve the desired result.
In fact, these simple explanations may seem light-touch ones, especially if you want to go into the day trading cryptocurrency strategy in detail or find out how to start trading cryptocurrency.
The SafeTrading team wants to leave all conventions and talk about crypto trading in layman's terms. What’s more, you can get top useful info about the best crypto trading bots.
Sounds good, right?
You no longer need to waste time and nerves looking for a magical day trading cryptocurrency manual - no matter if you are a newbie or a T-Rex in trading.
Today, you'll find a piece of exhaustive information on:
  • Trading essentials
  • Margin trading
  • Crypto market basics
  • Trading tips and more!

Let’s get straight to the point!

Day Trading Cryptocurrency: Essentials to Remember

day trading cryptocurrency

The cryptocurrency market operates 24 hours a day, 365 days a year.
This means that traders can make money day and night - there is no actual opening or closing of the trades.
Traders independently determine when to start a working day and how long it will last. It all depends on the chosen day trading cryptocurrency strategy or the specifics of the time zone in which they live.
Face up to the fact that the US and Chinese markets still hold the lead in terms of the number of participants and active sessions.
You've probably already heard that day traders are financial market players who make an unlimited number of transactions during cryptocurrency day trading.
The time factor is their main difference from other types of traders who can play long and hold positions for days, weeks, or months.
Technical analysis is also an essential part of day trading cryptocurrency strategy as it focuses on intraday time frames.
The use of leverage is also an important distinguishing feature of day trading. As a rule, this indicator can turn out to be much higher than for other traders.
To not overload you with technical information, it is enough to remember - the cost of borrowed capital can differ tens or even hundreds of times from the amount of money in your account. In this way, day traders can make fabulous profits with day trading cryptocurrency.
  • Enough Capital

There's no such thing as too much money for a day trading cryptocurrency strategy. Still, if you want to learn how to trade and show off excellent results on day trading cryptocurrency Reddit forums, you need to set aside a certain amount of money for this venture.
10 out of 10 successful traders will tell you that successful trading in the financial markets depends entirely on your budget.
To start earning with Robinhood day trading app - one of the top cryptocurrency trading tools, even $1,000 may seem enough. The truth of the matter is that $1,000 is far from enough to run on all four cylinders.
A word to the wise: Successful earnings are inversely proportional to the amount of investment.
The bottom line is the more you invest, the more you get!
Get this straight! The day trading cryptocurrency market has tremendous volatility and can change overnight. Price changes are often on tens of percent - Joking Aside, I Mean It.
  • Leverage Trading or Margin Trading

cryptocurrency day trading rules

You may have overlooked it, but cryptocurrency trading can only demonstrate mega-profits because of its high leverage. Thus, traders can have a modest net worth and make transactions for larger amounts.
Leverage trading is a cryptocurrency strategy suitable for those who want to quickly build up their capital and climb into positive territory.
Most often, the trader's deposit hosts as a stop loss for the trading account. It is noteworthy that users can independently choose the validity period of a stop loss feature: a week, a month, or even a year.
Some might argue that the cryptocurrency market hardly boasts a large number of trading exchanges offering leverage. For example, Bitfinex exchange may surprise you most unexpectedly! This is precisely the place where individuals can increase their net worth 3.3 times, hands down.
More recently, Binance, which is the largest exchange platform in terms of turnover, also made its specialty. Today, all registered members have access to a leverage feature and the latest day trading cryptocurrency Reddit discussions keep it honest!
But there is an exchange that kicked them up a notch!
"On everyone's lips" Bitmex allows its clients to trade with x100 leverage.
Did I just say x100? Yeah, you heard it correctly!
Keep in mind that this does not apply to the crypto asset itself but its settlement futures. In crude terms, settlement futures provide a user not with an asset itself but with the difference between buying and selling.
Try to remember that exchange marginality allows you to make short sales of an asset without having it on your balance sheet and repurchase it at the right time - crediting the difference to your account.
You can carry out a sell operation after the exchange has lent a notional crypto asset. Meanwhile, everything in life has its price. Still, the service won't run into bucks. You will need to pay an additional fee to activate this tool.
What if the system has the asset's price drop feature?
Salvation lies within short sale - it is one of the best ways to pile up the rocks.
  • Margin Call

Every newcomer to crypto trading should know if a trader ends up in a hole and has lost about 80% of the trading deposit, a broker closes the opened position.
However, if we are talking about the day trading cryptocurrency Robinhood tool user who did not deposit the required amount of funds, then a broker is forced to incur losses at his own expense. In this case, a trader is obliged to pay the commission to the broker.
Sadly, but sometimes the amount of the loss can exceed the amount of the deposit. Considering the trader and the broker's obligation, the trader can go to court in case of refusal to pay damages.
In fact, such cases are instead the exception to the rule and rarely occur in real life. A trader and a broker often come to an understanding, and the case rarely comes to litigation.
In the worst case, the day trader will lose the deposit, and the account will be closed etched in stone.
  • Market Understanding

cryptocurrency day trading reddit

One of the main mistakes that almost all beginners face is a lack of understanding of the characteristics of the market and financial tools. Put merely, inexperienced users struggle to trade assets without a day trading cryptocurrency strategy and experience behind them.
To not overload you with unnecessary information, let's divide the “market” term into two main components:
  • Market mechanics - a system that describes trading microstructure, price dynamics, order flow, and other things that form the trading process.
  • Fundamentals - essential knowledge needed to understand the trading system, including trading strategies, graphical indicators, technical analyses, etc.

What is a market anyway?
The market is a system that includes operations for placing and closing positions, buying and selling orders, and quotation of shares. This term also includes the process of trading various crypto coins on various cryptocurrency exchanges.
Believe it or not, before you start choosing a cryptocurrency trading strategy, you need to know about the types of orders that exist. It is necessary to correctly select the ones that are suitable for future trading operations.
If you took a breather and thought it was enough, then this is not the case!
You definitely need to learn about margin trading's peculiarities before getting on the roll with borrowed capital.
Still, there's nothing complicated about making money with selling/buying crypto today.
And here's a core tactic:
Knowing the day trading basics allows day trading cryptocurrency Robinhood hotshots to understand and anticipate price fluctuations and other vital indicators. In other words, before buying a cryptocurrency, a user must assess the asset's value relative to other coins and predict further Ups and Downs.
It won't hurt you to delve deeper into the fundamentals and mechanisms of a day trading cryptocurrency strategy. In fact, this is the only sure way to succeed in the unpredictable crypto market.
What’s more, you should concentrate on the good cryptocurrency asset to make a profit. Good coin means the one with high volatility - BTC is a top choice now. High volatility is a great way to earn cash while buying low and selling high.
Are you planning to become a successful trader and hit the jackpot? Use this article as a pocket guide to the volatile world of crypto signals!

Day Trading Cryptocurrency Strategy: Key 6 Steps

day trading cryptocurrency reddit

If you plan to master day trading strategy you need to use particular steps to succeed. Let’s check them right away.
  1. Day Trading Cryptocurrency Strategy: Find The Entry Point

Many professional traders talk over the importance of the moment when a user starts the day trading cryptocurrency session and opens the first position.
This may seem simple at first glance.
The day trading cryptocurrency strategy includes a set of rules for cryptocurrency used to make the most comfortable entry. Moreover, it allows you to minimize risks and open a position at the most favorable price.
Signals to enter and exit a position are the cornerstones used in a day trading cryptocurrency strategy and arbitrage cryptocurrency trading.
Don't be surprised that the opening and closing phases on the best cryptocurrency exchange for day trading are really critical steps for some players. In fact, it is precisely closing a position that allows you to fix gains or losses.
This is why an optimal trading strategy should consider entry and exit points equally. Even investors using copy trading platforms always check whether it is appropriate to buy a coin at a particular price.
What's the bottom line?
Keep in mind that trading strategies are very often based on technical analysis of a particular crypto asset. Beginners can use a whole host of useless indicators, while experienced traders only pay attention to the fundamentals and stick to a given vector of a day trading cryptocurrency strategy.
  1. Day Trading Cryptocurrency Strategy: Use Technical Analysis

If you thought that technical analysis is an attribute of special mathematical knowledge, this is not the case. Technical Analysis is the backbone of all day trading cryptocurrency players.
This term means nothing more than a graphical display of trading transactions on the market or exchange.
Perhaps the most popular technical analysis indicator is the so-called candlestick chart. Some experts also use a Japanese candlestick chart term. It is noteworthy that this pattern formed the basis of bull and bear markets used by traders worldwide.
It's a commonplace truth that making a profit during the day trading cryptocurrency session is possible only if volatility and price indicators move.
This is super simple!
Technical Analysis is one of the most essential tools for correctly reading market signals and analyzing the current situation.
  1. Day Trading Cryptocurrency Strategy: Fundamental Analysis

Fundamental analysis - tactic used to assess the financial performance of a business or crypto assets. This allows traders to define a correct day trading cryptocurrency strategy.
Meanwhile, advanced experts assess the company's business processes against the promising technologies that it uses.
If you look at the foreign exchange market's fundamental analysis, then the valuation of crypto assets looks like a more complicated process. This is why traders use fundamental analysis to accurately assess currency fluctuations. In order to see a company's underlying value and potential for future growth, experts run fundamental analysis including the check following essential points:
  • Future growth
  • Profit margins
  • Revenues
  • Earnings
  • Return on equity and other info
  1. Day Trading Cryptocurrency Strategy: Follow a Trading Plan

A trading plan is the number one thing that day trading cryptocurrency experts must adhere to daily. We all know perfectly well that positions in the market are opened and closed during the same day. That is why specialists prepare in advance for trading to foresee possible changes.
Often, traders use specific strategies to achieve the best results. However, this does not mean that they use the same patterns all day long.
Hotshots are always searching for up-to-date trading ideas, using Fundamental and Technical Analysis, and testing multiple day trading cryptocurrency strategies.
Some sleek traders take advantage of different time zones to maximize their efficiency. The crypto market operates 24 hours a day, 365 days a year. That is why some fixer-uppers have long been accustomed to selling coins in markets with maximum liquidity, including America and China.
Take it for granted!
Some strategies show tremendous effectiveness at certain times, for example, from 7 am to 9 am GMT.
Let's put it simply: If you want to master inside trading like a real professional, start preparing a strategy in advance.
Otherwise, you risk blowing up your account in no time flat.
  1. Risk Management: A Set Part of Any Day Trading Cryptocurrency Strategy

Little by little, we get to the fun part - Risk Management.
Almost every financial expert will tell you that risk management is one of the most important courses for studying business administration. The importance of risk management is no less relevant for crypto traders.
A pro player most likely knows when it is time to open or close positions.
Risk management is an excellent day trading cryptocurrency tool used to assess potential losses, considering possible price fluctuations and other vital indicators.
Many day trading cryptocurrency professionals conduct a thorough analysis well before opening a position. Thus, they calculate the possible profit and decide whether they are ready to join the battle.
Bear in mind that the cryptocurrency market is incredibly volatile. This means that you can become flat broke at any time.
Though, no guts, no glory!
Therefore, be sure to master risk management's basic principles, especially if you plan to start trading with leverage:
  • Identify the risk
  • Analyze the risk
  • Evaluate the risk
  • Treat the risk
  • Monitor the risk, etc.

Planning to become a pro, then act like a pro!
  1. Day Trading Cryptocurrency Strategy: Consider Money Management

If you carefully read all the given above, you probably realized that risk management allows you to anticipate the amount of cash that may be lost.
In the meantime, money management will tell you the amount you can spend on a trade without risking to overspend.
To provide proof, let's turn to statistics. Day trading cryptocurrency Robinhood old hands pledge the risk of loss in 5-10% of the deposit. If a trader manages to close several successful positions and fix the profit, then the amount of risk can be increased proportionally.
However, if you have suffered multiple setbacks in a row, then you should lower your risk score no matter what.
Because of risk control, day trading cryptocurrency users can get rid of several wrong positions without hitting the red line.
Money management is a key pillar of absolutely all day trading cryptocurrency strategies.
Here's the deal:
Control your capital and expand the crypto day trading platform background to manage costs as efficiently as possible.

Analyze Exchanges Terms and Conditions for Crypto Trading

day trading cryptocurrency robinhood

Day trading always goes hand in hand with the fees that exchanges charge after each transaction. Modern financial markets can charge completely different costs. In any case, commissions are a must-have livelihood component of any trading platform.
Exchanges never set themselves the goal of drawing your eye-teeth by charging impressive commissions. Some operators may offer you a discount if you trade limit orders.
A discount is a common practice if a user stores the exchange token in his/her account. In any case, the amount of commission is inversely proportional to the number of open positions.
The more positions, the higher the commission!
If your day trading cryptocurrency strategy is based on leveraged capital, then you should always stay alert.
Take your time and study the terms and conditions of the exchange you are interested in before clicking on the "Confirm" button to use the leveraged money.
Key Takeaways:
  • Traders can only succeed if they take it seriously and follow a well-planned course of action.
  • Cryptocurrency day trading is not just a hobby; stay alert, focused, diligent, and keep your temper in check.
  • Heed the advice given in this article and use our know-how tips to become a successful trader.

Day Trading Cryptocurrency: Proven Tips to Use in 2022

cryptocurrency day trading

If day trading cryptocurrency is new to you, all the data above may sound intricate.
That’s why we asked some pro traders to share some tips that work fine for newcomers.

Tip #1: Follow the News for Day Trading Cryptocurrency

Some conservative experts are outraged at the risks of increased volatility in cryptocurrencies. However, coins' sensitivity to the news has advantages that even novice traders can take advantage of.
The emergence of day trading cryptocurrency news, including government regulations, a hacked cryptocurrency exchange, or a short Elon Musk tweet, can dramatically raise prices or push them to the very bottom.
If you are always aware of the crypto market's essential news, you will have the edge over the rest of the day traders.
Master of information, Master of the situation!

Tip #2: Devote Enough Time for Day Trading Cryptocurrency

It's a bit of a cliché, but day trading cryptocurrency will require your concentration and time. If you want to become a successful trader, you will have to devote most of the day to trading.
Even if you trade using day trading cryptocurrency bots, you still have to administer the software no matter what.
As soon as you learn how to analyze Pips, Points, and Ticks and instantly identify opportunities, you will notice that time spins away.

Tip #3: Start Day Trading Cryptocurrency Simple

If you are a beginner trader, then focus on one or two assets per session. You shouldn't go out of your way to open the maximum number of positions. Minimal experience can become a hindrance and lead to irreparable losses.
Tracking day trading cryptocurrency indicators and finding opportunities will be much easier if you open no more than 2 positions.

Tip #4: Learn Patterns of Day Trading Cryptocurrency

Even novice traders may notice that some indicators can trigger price volatility. Learn to recognize them and choose the most appropriate options for making a profit.
If you are a newbie, you need not make life-changing decisions during the first 15-20 minutes after the market opens. Read the situation and watch the price changes!

Tip #5: Be Realistic About The Results of Day Trading Cryptocurrency

No cryptocurrency day trading strategy would provide a profit in 10 out of 10 cases. Each option has its own degree of risk.
A strategy can be considered a successful one even if it does not win over and over again.
Even seasoned traders can take profits from 50 to 60% of trades. Their main success lies in the fact that earnings on successful deals offset losses, and that's it!
There are times when the cryptocurrency market tests your nerves. As a day trader, you must be realistic about the profit potential, hold back greed and fear.
Some traders manage to make up to $1000 a week on crypto trading. Actually, that depends on the amount of investment and the right entry point.
Each of your decisions should be based on logic and exclude unnecessary emotions!
There's a widespread mantra among trading old hands: "Plan your trades and trade your plans.

Tip #6: Learn Trading Day Trading Cryptocurrency Basics

Once you have mastered the vital concepts and rules, you can test your day trading cryptocurrency with a demo account. To get started, you need to build a solid foundation and learn to use the basics, including preparing to trade and managing account risk.
Put that in your pipe and smoke it:
Increasing your trading capital is a drip by drip process. It's a universal principle in a day trading nature! Remember that cryptocurrency day trading risks should also increase gradually. If your strategy shows a stable profit, you can raise your rates.
A day trading cryptocurrency strategy must show the correct proportion of profits and losses before you start playing big and paying huge day trading cryptocurrency taxes. Unreasonable risk can lead to the loss of the entire deposit - a real nightmare for a trader of any level.
Why on earth should one face it anyway?

Tip #7: Day Trading Cryptocurrency Involves Emotions Management

A successful trading business must include even the smallest details. Therefore, every trader must develop confidence and patience to learn how to cope with increased risks and make the right decisions.
None of us are perfect. People tend to experience a whole range of emotions, especially when it comes to earning money with cryptocurrency day trading.
Almost all day trading cryptocurrency Reddit forums have a "You Can Lose Your All" writing on the wall.
Do you know what separates the men from the boys here?
A seasoned cryptocurrency day trading trader can lower the temperature, use a solid cryptocurrency day trading strategy and minimize the influence of emotions during a trading session. There are a vast number of external stimuli that can blow up your account on a dime.
Unfortunately, not every rooky can abstract from emotions.
Therefore, it is best if you start trading on a demo account. Once you feel confident and find the most optimal day trading cryptocurrency strategy, you can kick off with a small deposit.

Tip #8: Follow the Market Fluctuations

Market fluctuations are an integral part of a day trading cryptocurrency session. Most of you have probably heard that some popular coins have dizzying volatility for a short period. For this reason, users who are planning to try out the day trading cryptocurrency Robinhood process should meet a situation head-on!
Changing market trends means that you must change your strategy accordingly.
If you've witnessed a bullish trend, then get the short out of your head! The ability to quickly adapt to abrupt market changes is a vital skill for every trader.

The Conclusion Is Forced Upon You 

day trading cryptocurrency strategy

Today's cryptocurrency day trading might sound like a university lecture. Take my word for it; the basics of trading is the right magic wand that you were probably looking for before stumbling upon this article.
We made sure that you learn everything you need to know about such concepts as capital, margin and leverage trading, technical analysis, emotions management, and so on.
What's the next shoe to drop?
You should now focus on effectively structuring the cryptocurrency day trading information you read and then practice, practice more and practice forever!
Those of you who do not have enough time to learn how to trade with cryptocurrency day trading indicators in detail may pay attention to crypto bots.
These handy boosters can do analytics while you go about your own business. All you have to do is take care of the start-up capital, and the thing is in the bag.