Best Crypto Day Trading Strategies • Benzinga Crypto

In the volatile world of crypto, you’ll need nerves of steel, a winning game plan, and an intuitive trading platform if you want to win. You will find nerves of steel and an intuitive trading platform through search, research and even more research. Let’s take a look at the X factor in this gumbo – the trading strategies you will be using.

Range trading

In many cases, a cryptocurrency will trade for a long time within a certain range. Bitcoin, for example, traded between $ 8,601.40 and $ 10,210 for a period of 30 days. This ± 9.4% range seems volatile until you realize that Bitcoin can make a ± 42% change in 24 hours.

Cryptomarket caps are small enough that they can be handled by a single large player. In some cases, these large players will systematically manipulate the price of a coin up and down to take advantage of a range. If you notice these models, you can also take advantage of them.

If you are range trading you should be careful of overbought and oversold areas. Overbought means that buyers have saturated their need and the stock is likely to be sold; oversold means the opposite. Chart indicators, included in any reputable stock chart program, can help you find these areas. Common indicators used for this purpose include the Stochastic Oscillator and the Relative Strength Index (RSI).

Attribution: Wikimedia

scalping

Scalpers take advantage of the increased trading volume to profit from it. Scalpers can exit a trade within seconds of entering it, and many use automated robots to increase the frequency of their trading cycles. Ideally, scalpers want to exit a trade before a news item or short-term move has a chance to change market sentiment on a coin.

Scalping chart

Attribution: Quora

It is better to have a large bankroll to profit from this very short term crypto day trading strategy. Although the return on investment for each trade is very small, betting a large amount means that the scalp comes back with a substantial amount of money (0.5% of $ 100,000 equals $ 500, enough for the payout of one. luxury car). Trading frequently – sometimes making 10 to 20 trades per minute – also means these small wins add up.

Playing Bitcoin Volatility

The Chicago Mercantile Exchange (CME) offers options on Bitcoin futures, opening up a host of volatility strategies for traders. Crypto has 5X the volatility of traditional asset classes. Volatility trades are ideally directionless, which means there is an opportunity to make money whether Bitcoin goes up or down.

The long straddle is a directionless volatility strategy using Bitcoin options. To initiate, you buy a call option and a put option at the same time for the same strike price and the same expiration date. The Bitcoin straddle pays off when Bitcoin drops or rises more than your premium over the strike price. To exit the trade, you sell the call and place it at the same time.

Put simply, a big move up or down is in your favor.

Attribution: Wikimedia

Arbitration

Arbitrage involves buying cryptocurrency in 1 market and selling it in another market for a higher price. The difference between the buying and selling price of an asset is known as the “spread”. As a generally unregulated market, crypto allows anyone to create an exchange. This can lead to large differences in the spread due to differences in asset liquidity and trading volume.

In the crypto market, traders typically hold a portfolio on an exchange that they trade. To initiate an arbitrage opportunity, open accounts on exchanges that you think will have very different prices for the same asset.

Arbitrage involves buying cryptocurrency in 1 market and selling it in another market at a higher price.

Attribution: Holdbot

At one point, Bitcoin was trading at a price 40% higher in South Korea than in the United States. It was called the “kimchi bounty,” and it happened more than once. Traders profited by simply buying Bitcoin on the US exchanges and immediately selling it on the South Korean exchanges. While the spread is usually not that large, the low barrier to entry for new exchanges brings new arbitrage opportunities more often than in traditional asset markets.

Traders should also consider transaction fees when attempting arbitrage. The fees for making a trade on an exchange can erase the gains from the trading gap.

Are you looking for more trading strategies? Go to Coin Market Manager.

Best Online Cryptocurrency Brokers

Which trading platform you choose will likely make a big difference in your daily trading results. The strategy you choose should make a difference in which platform you choose, as different platforms will have different strengths. For example, scalpers need a quick turnaround time while volatility traders can benefit more from an instant news feed.

Take a look at some of the best online cryptocurrency brokers and what they have to offer.

1 minute exam

Crypto.com strives to make cryptocurrency a part of everyday life by offering a comprehensive suite of services to crypto users. The company offers a Crypto.com app, exchange, Visa card, DeFi exchange, DeFi wallet, DeFi Earn, Crypto.com price, staking, crypto loan and many other services. What really sets them apart, however, is the combination of very low fees and incredibly generous rewards programs for their users.

Best for

  • Traders who want to access a secure and low cost cryptocurrency exchange
  • Passive investors who want to earn interest on their balance without having to make frequent transactions
  • Mobile investors who prefer to manage all their crypto needs through their phone or tablet
Advantages
  • Low fees
  • High security
  • One stop shop for all your crypto needs (wallet, trading, spending, etc.)
  • Many ways to earn interest, rewards and discounts
The inconvenients
  • Low privacy
  • Customer service response time could be improved
1 minute exam

Coinbase is one of the largest cryptocurrency trading platforms on the internet. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes buying and selling major cryptocurrency pairs exceptionally easy.

You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and improved functionality.

While Coinbase doesn’t offer the most affordable prices or the lowest fees, its straightforward platform is fairly easy for complete newbies to learn in a single transaction.

Best for

  • New cryptocurrency traders
  • Cryptocurrency traders interested in major pairs
  • Cryptocurrency traders interested in a simple platform
Advantages
  • The simple platform is easy to use
  • Full mobile app mirrors desktop functionality
  • Coinbase Earn feature rewards you with crypto to learn more about available coins
The inconvenients
  • Higher fees than competitors

Robin Hood

To start

securely via the Robinhood website

Crypto trading doesn’t have to be cryptic

Whichever strategy you choose, you must be prepared to accept losses in a volatile market like cryptocurrency. Prepare your exit plan before entering into a transaction. Don’t follow the crowd for good deals; only invest in coins you really believe in, even for just one day.

Also, remember that the market offers endless opportunities. So don’t bite your head if you play it safe and miss one, and don’t chase gazelles that have already run away from the farm. Trading is more than an emotional journey – you have to keep a clear mind and stick to your chosen strategy through thick and thin.

Frequently Asked Questions

Which cryptocurrencies are best for day trading?

1

Which cryptocurrencies are best for day trading?

demand

Chris Davis

1

A. Day traders look for volatility. Volatility is more prevalent in micro coins or coins with small market caps compared to other cryptos. Currently, any coin with a market cap of less than $ 1 billion is considered a small cap. Some small cap coins with a good trading volume include SiaCoin (SIA), Basic Attention Token (BAT), and Fusion (FSN).

Reply link

answered

Benzinga

How much can you earn in crypto day trading?

1

How much can you earn in crypto day trading?

demand

Chris Davis

1

A: High volatility microcoins can earn price multiples in 1 day, providing exponential returns to lucky investors. High volatility also means that these coins can go in the wrong direction just as quickly. As the potential reward increases, so does the risk.

Reply link

answered

Benzinga

Are there any restrictions for day trading cryptocurrencies?

1

Are there any restrictions for day trading cryptocurrencies?

demand

Chris Davis

1

There are no restrictions on cryptocurrency day trading.

Reply link

answered

Benzinga

Can I trade cryptocurrencies with $ 200?

1

Can I trade cryptocurrencies with $ 200?

demand

Chris Davis

1

You can open an account on a cryptocurrency exchange using $ 200 and start day trading.

Reply link

answered

Benzinga

Associated content:

Benzinga has developed a specific methodology for classifying cryptocurrency exchanges and tools. We prioritized platforms based on offers, prices and promotions, customer service, mobile app, user experience and benefits, and security. To see a full breakdown of our methodology, please visit our Cryptocurrency Methodology page.

SoFi creates crypto products to help you buy, sell, and store your bitcoin and cryptocurrency. You can instantly buy Bitcoin, Ethereum, Cardano, Solana, Chainlink, Uniswap, and other DeFi tokens. For a limited time, get a $ 10 BTC bonus when you make your first transaction of $ 10 or more!


Source link

Comments are closed.