Day Trading Cryptocurrency Strategies: A Beginner's Guide (2024)

Day Trading Cryptocurrency Introduction

Can you make money day trading cryptocurrency? Yes, day trading is one of the best ways to make money with crypto. Trying to hold long-term can be risky because of the volatility on the charts. If you buy at a good support level, you can hold longer term, but taking your profits along the way is important.

Day trading cryptocurrency is one of the ways you can grow your brokerage account. Getting good stock training is important as you look into day trading cryptocurrency. Why? Because it’s not as simple as you think. Knowing when to buy and sell, having a trading plan, and practicing proper risk management are the differences between gambling and trading.

The bottom line is using proper risk management will protect you and your account. If you adhere to these principles, you can keep your losses small and let your runners run. The crypto world is like the stock market—a straight-up battle between buyers and sellers, bulls and bears, supply and demand.

You can take advantage of every move when trading cryptocurrency with proper training. You can trade virtually anywhere and anytime, too. I use Robinhoodfor my crypto trading, and it works great!

Markets such as thecrypto market are volatile. They are highly speculative and backed by no real asset. With that in mind, day trading may be the safest way to protect yourself from random volatility. What is day trading?Investopediadefines it as buying and selling a security in a single trading day. We do a lot of that around here!

In other words, you’re not holding a stock or cryptocurrency overnight. You can make just one trade in which you buy and sell on the same day, or you can make many. Volatility is a key part of trading. It makes it a great opportunity.

In essence, you need volume and volatility. Volume and volatility move prices and give traders action to buy and sell. It would be best to have that price movement to make a profit. Getting stuck in a trade that moves sideways too long can be quite boring, but if you’re investing for the long run, that’s completely different.

You may not mind if it trades sideways for months or years if you are an investor. Bitcoin, the biggest and most popular cryptocurrency trading in the market, has seen a 10% increase in just one minute. You could have missed the move or taken a big loss if you didn’t have a good trading strategy. Setting a good alert with your trading toolsis the way to go.

Being a responsible trader, whether it’s day trading cryptocurrency, stocks, or options, is incredibly important to your trading account. The goal of all traders is to grow their wealth. Small base hits add up over time and are much better than home runs one minute and striking out the next.

Hence, there is a need for day trading cryptocurrency safely. The volatility in the cryptocurrency sector can burn you if you’re not careful. Take our day trading courseto learn more about responsible trading.

When we think of pump, dump, and manipulation, we typically think of penny stocks or day trading strategies. However, day-trading cryptocurrency falls into that category now. As a result, beware of the pumper. A pumper is a guy who yells a lot that the crypto is going to the moon but can’t show you a chart explaining why.

It usually is if someone is promising something that sounds too good. Usually, they’re telling you about getting on the ground floor of a revolution. You can either go along with them or do your due diligence. We hope you do your research.

Cryptocurrency has only been around since 2009, and it wasn’t until recently that people became fully aware of it. Day trading cryptocurrency can protect you from bag holding from buying at resistance and not properly planning your entry.

However, ensure you’re trading crypto stocks with a tight bid-ask spread and liquidity. Volatility is good when you can fill your orders and move the stock.

Some crypto stocks people are promising are “going to the moon.” However, when you look at the charts, you’re scratching your head, wondering how that’s possible.

Hence, we stress doing your research instead of following what someone tells you. The goal of our service is to make you a self-sufficient trader.

That way, you’re not getting trapped by pumps and dumps. Getting whipsawed around in a trade is not fun. Sometimes, the best trade is the one you didn’t take—meaning trading less and making better trades. Don’t just trade to trade. That doesn’t tend to work out too well.

To be good at day trading cryptocurrency, you need to be able to find the best setups. Seeing and reading patterns are extremely helpful in finding good profit targets and entries and exits. I like to use Trendspiderfor trade setups.

Day trading cryptocurrency can be extremely volatile at times. If you can’t read the charts, you’re going in blind and just guessing. It’s important to remember that patterns do break down. So, you need to be able to see the small patterns that make up the bigger patterns.

Patterns can profoundly impact the direction of the crypto stock you’re trading. There are patterns on the daily charts and on the intraday charts. If you don’t know what head and shoulders, cup and handles, bull flags, and ascending triangles are, stop now and take our candlestick course! We hold your hand and show you these patterns daily on our streams.

Because of the volatility in day trading cryptocurrency, those different time frames can cause those stocks to trade in directions you weren’t necessarily anticipating. Don’t take the trade if you don’t have an entry, stop loss, and profit target in mind!

However, that doesn’t mean you need to look at every chart before placing a trade. Certain time frames match up best with your trading style and plan. I love looking at hourly, fifteen-minute, five-minute, and 1-minute charts when day trading. Multi-time frame analysis is key!

That may mean you must open a paper trading account to practice and find which style fits you best. The good thing about day trading cryptocurrency is that there’s no right or wrong way to trade it if you use proper risk management and can find the patterns. Check out our bitcoin stockslist.

Technical analysis is important if you’re going to day trade cryptocurrency. In the picture above, you can see that Bitcoin is trading below the 13ema.

Not only is that bearish, but a bear flag pattern is also forming. As a result, you can expect that Bitcoin will continue to move downward.

If you use 9 and 20 EMAs or 50 and 200 SMAs, you want to see if they’re in a bearish formation. That can guide how you trade the sector.

Another thing technical analysis can help with is findingsupport and resistance. New traders often lose their shirts because they don’t know how to find support and resistance.

As a result, they typically buy at resistance because they see the stock ripping. Then traders take their profits, and the stock falls. New traders then don’t understand why they lost money when the stock was ripping.

Check out our livetrading rooms, where we discuss support, resistance, and technical analysis.

Day trading cryptocurrency can result in big, fast moves. Fear of missing out, especially when you see a stock moving, can cause pain when day trading cryptocurrency.

When a sector as volatile as crypto is moving, you may find yourself trying to jump in and catch it.

However, that usually means you’re left taking a loss. If a stock is taking off, wait for a pullback. Don’t rush in trying to be a part of the move. If you miss one move, there will be others.

Day trading cryptocurrency following that philosophy can go a long way in protecting your brokerage account.

Day trading cryptocurrency may be the safest way toinvest in this sector. Therefore, you need to be able to spot entries and exits along with support and resistance.

Knowing what you’re doing with the cryptocurrency sector is important. You want to make money and not lose your life savings.

That requires practice along with study. It also takes time. While we know that’s not what many people want to hear, it’s the best way to become a successful trader.