Best strategy for crypto day trading

We often hear about all the money you can make by day trading stocks. But what about crypto day trading? Our team at Trading Strategy Guides is lucky to have over 50 years of combined day trading experience. So, you need a day trading cryptocurrency strategy to protect your balance. The high volatility nature of Bitcoin and other cryptocurrencies has made the crypto market like a roller-coaster. Otherwise, your experience can be like skydiving without a parachute.

Day Trading Cryptocurrency: How to Day Trade Cryptocurrency 101

HodlBot helps cryptocurrency investors automate portfolio creation, indexing, and rebalancing. Day trading refers to the act of purchasing and selling assets in short, intra-day time intervals, sometimes spanning mere seconds. In order to make a return, day traders will employ strategies and analysis that will allow them to predict the market, arbitrage price discrepancies, and take advantage of news outbreaks.

The cryptocurrency market is less developed than the equity markets. There are fewer participants and also fewer sophisticated traders. Therefore, there are typically more opportunities to exploit price discrepancies in order to make money. If played correctly, volatility can lead to more profitable trading. Because the cryptocurrency market has fewer participants, it is also less liquid. A market is considered less liquid when the order book is thin and trading volumes are low.

This phenomenon is known as slippage. If you are trading in a market with low volume and liquidity, you need to be careful. That being said illiquidity itself can be a trading opportunity if you are able to exploit it.

Recognizing a price discrepancy caused by illiquidity, and arbitraging it between two different exchanges. Algorithmic trading bots are designed to automatically execute orders based on some programmed strategy.

They are lightning-fast and much quicker than humans. However, usually, the strategies are set in stone and cannot be changed on the fly. If you are trading by hand, you cannot compete against a trading bot on execution speed and data-ingestion speed. Anything that is difficult only because you need to ingest a lot of data, monitor prices, and execute trades quickly, becomes trivially easy for a machine. However, anything that is ambiguous and circumstantial is something that humans will often have an edge in.

There are a few good options off the shelf that you can configure to supplement your trading strategy. Whales are participants with a lot of money who can change the market with large trades. Whales intentionally push the price down in order to trigger stop-loss orders. Then they turn around and buy coins from these stop-loss orders for cheap while waiting for the market to recover.

This strategy works well for coins with low trading volumes and small order books. With enough coins, whales can push down the price by introducing a slew of market-price sell orders. In this article, I go into detail on the strategies whales use to manipulate the market. These kinds of traders use indicators and charts to help them make predictions about how the market is going to change.

It is quite a difficult thing to do for both humans and trading bots alike and take a lot of practice to get right. The MACD indicator is calculated by subtracting the day exponential moving average from the day. The important thing here is to note when the MACD and average lines cross. The crossovers are indicators that the price is about to accelerate in the direction of the crossover.

Bollinger bands are a set of lines plotted two standard deviations away from a simple moving average. When the bands close together, it is called a squeeze. A squeeze signals a period of lower volatility. A break out happens when the price moves past the range of the Bollinger band.

Some view this as a trading signal, others as a simple sign of increased volatility. When important news breaks, it will often have an effect on the price.

Some traders use news breakouts as an opportunity to predict the market. News trading works better during a bull market when market participants are more sensitive and actually paying attention. It is also important to note that the market may already have predicted the news and priced it in.

Therefore a news breakout can often have a null effect or even an opposite tone. Market making is a strategy where the trader simultaneously places both buy and sell orders in an attempt to profit from the spread between the highest bid and the lowest ask, otherwise known as the bid-ask spread.

Market makers stand ready to both buy and sell from other traders, thus providing liquidity to the market. There are two different ways to arbitrage cryptocurrencies.

The first is by finding prices mismatches through different trading pairs on a single exchange. The other is by locating price differences across multiple exchanges. Inter-exchange arbitrage opportunities are more readily available because there is additional complexity associated with having to withdraw assets from an exchange.

Arbitrageurs made a profit by buying Bitcoin on US exchanges and selling it on exchanges where BTC was trading higher. In order to trade in both directions, traders need to be able to short. The most common way to short cryptocurrency is by using futures contracts. A futures contract is an agreement to sell or buy an asset at a specified price at some future date.

In order to take a short position, a trader can take on an obligation to sell some amount of cryptocurrency at a specified price in the future. This allows you to maintain your position. In order to enter into a futures contract, you need to have an initial amount of collateral on hand. If you cannot pony up enough collateral to meet the margin requirements, then your contract will be liquidated and you will lose all your money to the exchange.

Leverage gives you access to more capital so you can trade with more money than you have. You are essentially loaning money to trade. Just like futures contracts, you need to have a certain amount of capital as collateral. If the value of your collateral shrinks because the asset you bought goes down, then you will be margin called by the lender.

This means that you lose all your money to the house. Typically the more leveraged you are, the larger the amount of collateral you will need, and the less wiggle room you will have before you get margin called. Be very wary of this because the cryptocurrency market is so volatile.

If you are not careful, you can quickly lose a lot of money by making leveraged trades. BitmexRekt tweets these liquidations in real time. You can follow them here. There are several trading bots with configurable options off the shelf that you can employ as your own. In order to help you choose the best one, we wrote a guide on the different kinds of trading bots in this article.

Just as a disclaimer, HodlBot is an example of such a bot. HodlBot makes it easier for daytraders to create custom portfolios. Because you will likely have your cryptocurrency split up amongst many exchanges, a good aggregator is much appreciated. A portfolio viewer tool like Delta will aggregate all of your assets so you can see it in one place.

Tradingview is a very popular trading tool amongst technical traders. You can draw charts, look at candles on a tick by tick basis, and much more. I like to talk about all things data, finance, and crypto. You can find me on Twitter here. An Analysis of Slippage on the Kraken Exchange.

Crypto vs.

Step #2: Apply the Money Flow Index Indicator on the 5-Minute Chart. Step #3: Wait for the Money Flow Index to reach the level.

C ryptocurrency trading today is no longer a niche and somewhat hidden way for people to make money online. This growth has led for many of the systems that are used in trading traditional assets such as stocks and forex to perforate into the way that cryptocurrency is traded. One of these parts of traditional trading that has become a part of trading digital assets is day trading cryptocurrency. Cryptocurrency is one of the most exciting technologies in the world today, moving further and further in the mainstream consciousness every year, and looking to redefine the way that global trade is conducted and how the something is determined to have value.

Do you want to learn how to trade cryptocurrencies like a pro? Well, I understand the reason.

Day trading cryptocurrency has boomed in recent months. High volatility and trading volume in cryptocurrencies suit day trading very well.

Crypto Trading Strategy For Winning Trades: With Live Proof

Not to worry — the parachute has arrived! Read on for some of the key basics about the day trading market. People thinking about day trading would do well understand the nature of the cryptocurrency market before they start. There are distinct benefits to the cryptocurrency market that make day trading in it potentially lucrative, but there are also distinct dangers that can make it extremely volatile and very easy to lose money. The small size of and high interest in the crypto space has historically led to large price swings. This makes it less likely that an order will immediately be filled, inadvertently closing position that was actually favorable.

Day Trading Cryptocurrency – How To Make $500/Day with Consistency

Well before you do, I think you should read my guide first! This will start by explaining exactly what day trading is, followed by the things you need to consider. By the end of reading my guide from start to finish, you will have all the information you need to decide if day trading cryptocurrency is right for you. When people talk about trading, they are referring to buying and selling an asset with the aim of making a profit. For example, in real-world stock exchanges, people trade all kinds of things. This can include stocks and shares like Apple, currencies like U. Dollars, and even metals such as Gold and Silver. Whatever is being traded, the objective is the same. Buy an asset and then sell it for more than you paid for it! This is exactly the same as trading cryptocurrency.

You could try this instead: Develop your own day trading strategy with indicators and rules that you understand and hold yourself to.

Are you confused and don't know how to day trade bitcoin and other cryptocurrencies? Information overload is a big problem these days and many people don't know they are a victim of this dangerous mind problem.

Day Trading Cryptocurrency - Strategy Guide for Beginners

It is now common knowledge that you can make good money from day trading cryptocurrency. However, cryptocurrency trading is not a get rich quick scheme. In fact, it is quite the opposite. You will need to learn a Day Trading Cryptocurrency Strategy, before you can start trading successfully. The strategies will help you to read and interpret market trends, and use them to make intelligent guesses on where the markets are headed. It is with that in mind that we came up with this guide on day trading cryptocurrency strategy for beginners. Read on to learn what you need to know before you take the plunge into the world of cryptocurrency trading. Although the focus here is learning the strategies to use when day trading, you still need to learn the basics of how the blockchain works. While it is a technically advanced subject, you should know its basics such as why it is better than other existing technologies used to manage databases. That will help you to learn why investors will prefer other altcoins such as Monero and Ripple, to Bitcoin. For example, you will learn that Bitcoin, although it is the pioneer cryptocurrency, it lacks scalabilty and privacy. That has shifted people to other coins that promise greater scalability, and identity protection. If you are a risk taker, the smaller coins offer you a chance to risk your investment and make a huge profit within a day. That is where the creators of the coin simply publicize it as being the next big thing, cash from the sudden popularity, and then abandon the investors with worthless coins.

Cryptocurrency Day Trading 2020 in Armenia – Tutorial and Brokers

HodlBot helps cryptocurrency investors automate portfolio creation, indexing, and rebalancing. Day trading refers to the act of purchasing and selling assets in short, intra-day time intervals, sometimes spanning mere seconds. In order to make a return, day traders will employ strategies and analysis that will allow them to predict the market, arbitrage price discrepancies, and take advantage of news outbreaks. The cryptocurrency market is less developed than the equity markets. There are fewer participants and also fewer sophisticated traders. Therefore, there are typically more opportunities to exploit price discrepancies in order to make money. If played correctly, volatility can lead to more profitable trading. Because the cryptocurrency market has fewer participants, it is also less liquid. A market is considered less liquid when the order book is thin and trading volumes are low.