Day trading is a viable option to earn a quick buck in the cryptocurrency market. As a result of the extreme price swings in cryptocurrencies, many modern traders are honing their skills in day trading.
This primer covers the groundwork for day trading cryptocurrencies.
The Basics of Day Trading Crypto
- With crypto day trading, you enter and exit a position in the market on the same trading day. Because deals are often started and concluded during the same trading day, this practice is called “intraday trading.”
- Speculating in cryptocurrency markets daily means anticipating and capitalizing on price fluctuations. Due to the high volatility of the cryptocurrency market, day trading may provide substantial profits. It’s unusual for a conventional stock or even a commodity to increase value by 10% in a single day. Such transitions often occur in cryptography.
- Day trading, like other kinds of trading cryptocurrency, requires more than blind luck.
- Knowledge of fundamental and technical analysis and a well-thought-out plan for crypto day trading are prerequisites. The vast majority of day traders depend on technical analysis to help them come up with profitable trade ideas. They make investing judgments based on price movement, volume, and chart patterns, among other factors.
- Fundamental news and other updates connected to the developers are also monitored for their potential short-term effects on the digital asset’s value.
Why Day Trade Crypto?
Day trading cryptocurrencies is done primarily for financial gain. However, since cryptocurrency values fluctuate more than any other asset class, savvy investors may profit from this volatility.
The cryptocurrency market might reward you if you have an excellent crypto day trading plan and can evaluate trends.
The short-term gains available via day trading cryptocurrency are another plus. Day trading involves entering and exiting a position within a single day rather than the more traditional methods of purchasing and holding or taking long positions.
Crypto Day Trading Strategies
The proper crypto day trading strategy is essential for successful day trading of crypto assets like Bitcoin, as discussed before. To assist you in maximizing your earnings from day trading, we’ve described three methods below:
Scalping
Scalping is a form of day trading in which investors in cryptocurrencies aim to profit from rapid price fluctuations caused by high trading volumes. For example, they might take minor profits by getting out of deals only minutes after entering them. Certain scalpers use trading bots because they make trading more accessible and streamlined.
A scalper’s goal is to make frequent, tiny gains. They systematically seek and exploit even the smallest openings in the market. Since the profits from scalping are often modest, the required investment capital is relatively high.
Arbitrage
One of the most common investment methods is called “arbitrage.” Gaining from the price difference between exchanges by purchasing a coin on one and selling it on another.
For instance, Bitcoin’s price on Binance can be $45,000, whereas on Coinbase, it’s $45,500. Therefore, you may earn $1,000 after deducting the fees if you purchase two bitcoins on Binance and immediately sell them on Coinbase.
Arbitrage, much like scalping, often results in little net profit. As a result, you may expect greater returns from more substantial orders.
The Best Crypto Day Trading Platform
EToro is the most significant cryptocurrency exchange for day trading.
This broker, which has been around since 2007, is widely used because of its adaptability and versatility. It also has a top-tier cryptocurrency app., eToro, that complies with the standards set out by several prestigious financial authorities.
eToro makes trading accessible to newcomers with a user-friendly interface and a cheap $10 minimum balance for most countries. The platform’s modest trading charge of 1% further contributes to its widespread appeal. By using eToro, you may receive low-cost, high-security exposure to the cryptocurrency market.
EToro’s Copy Trader function is another reason why it’s the finest crypto exchange in the UK for novices. This function may find and copy the best eToro traders in real time. As a result, you will also benefit financially from their success.
What are the best cryptocurrencies to day trade?
The moment has come to research the most suitable cryptocurrency for day trading. There are a wide variety of alternatives, but the best ones are:
Lucky Block (LBLOCK)
- The best cryptocurrency to day trade is the LBLOCK token from Lucky Block. This asset is supported by a solid venture, making it very desirable.
- Lucy Block, a blockchain game, released LBLOCK in the first month of 2022. The platform utilizes blockchain technology to provide openness, speed, and transparency in online gaming for everyone around the globe. Lucky Block plans to shake up the international gaming industry and is well-positioned to accomplish it.
- Users of Lucky Block may play any game on the service so long as they have LBLOCK. The token is a pass for use on any game found on Lucky Block. The asset was first listed for $0.00020, but within a month, it had risen to a record high of $0.0096.
- Even at its current price of $0.0039, LBLOCK is worth more than ten times as much as it did when it first appeared on the scene. Moreover, its price has risen by 4 percent in the last 224 hours, making it an attractive option for day traders.
- Investors can keep a watch out for the asset on PanakeSwap, where it is now listed.
Dogecoin (DOGE)
When it comes to day trading, Dogecoin is the second-best cryptocurrency. The asset is widely recognized as the top digital currency on the market, and its dramatic price fluctuations provide excellent possibilities for day traders.
In addition, day traders love DOGE since cryptocurrency is driven more by fundamental news than technicals. As a result, the asset is a fantastic tool for trading and making money, even for investors who may still need to be well-versed in technical analysis.
Due to its volatility, Dogecoin should only be risked as a tiny percentage of your total money. By engaging in Dogecoin derivative trading, one may get access to Dogecoin or hedge against price fluctuations.
Bitcoin (BTC)
Day traders seeking the best cryptocurrency have Bitcoin as a top option. Bitcoin, now the most popular cryptocurrency by a wide margin, is advantageous because of its high liquidity. In addition, Bitcoin has a large trading volume that varies widely across markets.
So, purchasing Bitcoin is an excellent option if you are a day trader specializing in arbitrage or scalping.
Conclusion
Day trading cryptocurrencies may be very profitable, particularly for those with a short time horizon. You should be fine if you have a good plan for crypto day trading.
We propose LBLOCK as the finest cryptocurrency for day trading. Given the asset’s recent price volatility, substantial profits are possible. Furthermore, PancakeSwap is a marketplace where you can trade lottery tokens like LBLOCK daily.
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