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Day trading is an investment technique which has been used with success in trading markets since forever.

Additionally, the nature and main characteristics of day trading strategy seem to apply very well in the high trading volume and increased volatility that crypto market offers.

So, what is the day trading cryptocurrency strategy?

Is an investment strategy that relies on frequent trades with one or more cryptocurrencies which trades are completed within 24 hours.

This technique can be lucrative, but involves a significant amount of risk meaning that it might not be the best option for inexperienced traders.

Generally, if you want to succeed you’ll need to have a plan and stick to it no matter what, because if you don’t control your feelings and your impulse you are going to fail.

What is the day trading cryptocurrency strategy?

Day trading is a strategy that relies on entering and exiting trading positions within the same day.

In stock exchange markets a day is counted from the opening of the market since its ending which usually equals 7 to 8 hours.

The traders using that technique are not expected to hold any of their positions by the end of the day.

However, the cryptocurrency market is always open for trade and as a result the day trading time frame is considered to be the 24 hours period.

Day trading is not recommended for beginners

Day trading may sound like a simple strategy, but as it usually happens simple things happen to be the most difficult to achieve.

The main barriers that a trader needs to conquer in order to succeed in day trading cryptocurrency are:

• Crypto day trading requires an in-depth knowledge of cryptocurrencies and the environment surrounding it. For example, blockchain technology, the mining procedures for cryptocurrencies or even how wallets work, are some concepts you need to know first before being involved in this kind of trading. Some recommended books in order to get started are “The Only Cryptocurrency Investing Book You’ll Ever Need”, “Cryptocurrency Investing For Dummies”, and many others which you can find here.
• Day trading is known for being profitable for some traders, but you should keep in mind that it is quite stressful and might involve high risk, especially in the case of cryptocurrencies. Additionally, it demands a high level of maturity because you don’t want to let your emotions affect your decisions.
• Successful day traders are adept users of Technical Analysis, a trading analysis that focuses on historical price fluctuations. As a result, mastering the concept of technical analysis is a must.
• Last but not least, a successful trader has to choose the right exchange platform that will allow him to conduct his transactions easily and safely. Some recommended platforms for day trading are Kraken, Bibance, Robinhood etc. Those platforms are among the most used in the cryptocurrency trading market and have already proved their reliability for their clients.

Does crypto apply to day trading?

Yes. 

Day trading strategy applies very well in the cryptocurrency market since their characteristics seem to be in good match with each other.

Subsequently, day trading thrives in markets that have high volatility and high trading volume.

In addition, the cryptocurrency market is well known for its volatility, a characteristic that is not always good but in this case happens to favor the use of day trading tactics.

Furthermore, the increasing popularity of cryptocurrencies results in high trading volume, which is only expected to grow more by the years.

Also, successful day trading depends on technical analysis, a strategy that analyzes historical data in order to find out hidden patterns in the near future.

Crypto market has also proven to offer some easily predictable trends from time to time. Meaning that if a trader knows how to use technical analysis and apply it into the crypto market, it’s not going to be hard to find out hidden patterns and take advantage of them.

Best cryptocurrency for day trading

As already mentioned before, there are some characteristics in crypto assets that favor the use of day trading.

Those are:

• large trading volume
• high price volatility
• high levels of liquidity 
• big volume of recent news

So taking into consideration those criteria we chose the best cryptocurrency for day trading but also 2 more runner ups.

• Ethereum – Ethereum is the second most popular cryptocurrency and its popularity is only going to grow with the passage of the time. And that’s because it offers a lot more than just a coin since it is also a brilliant blockchain ecosystem. An ecosystem that makes it possible to create new tokens but also built decentralized applications. As it concerns day trading, ethereum’s price is very volatile which helps them to create a big margin for profit. In addition, it enjoys a very high level of liquidity and a big trading volume which amounts from 10 to 70 billions dollars daily just in the last 12 months.

• Tether (USDT) – Tether is the cryptocurrency that has the highest trading volume even bigger than Bitcoin and Ethereum. The numbers are impressive since the daily trading volume in 2022 ranges from 40 to 80 billions dollars. That achievement is enough to make it one of the best choices for cryptocurrency day trading since the high trading volume is going to attract new investors and will push it’s price high.

• Ripple – Another one altcoin that offers great opportunities for day trading. Ripple offers a faster and more planet friendly solution from Bitcoin. Additionally, it is considered to be the number one competitor of Ethereum. Finally, it is almost everyday day in the news thanks to the famous litigation with the U.S. Securities and Exchange Commission (SEC).

Final thoughts

Day trading cryptocurrency strategy not only is an interesting strategy but also a very profitable one.

But you should not get confused and think of it as an easy task.

It involves a lot of risk and that’s why you are recommended to be well prepared before getting involved!

Image source: Cryptocurrency360.