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How To Day Trade Crypto

How To Day Trade Crypto

Wondering How to day trade crypto? You are at the right place. It’s a new day, and you’re ready to get back into the swing of things. You’ve reached your coffee in hand, a new tab open on your browser, and fingers crossed that this will be the day that’ll finally put an end to all this crypto nonsense. You know it has to happen eventually, right? That’s when you notice there are only two tabs left in your browser – “Google” and “Crypto.” What should you do? The answer is simple: trade! It doesn’t matter if it’s Bitcoin or Ethereum; click around until you find something interesting enough for today. With any luck, by the time lunch rolls around tomorrow, we’ll all have forgotten about this whole thing anyway.

  1. What is day trading crypto?

Day trading crypto is buying and selling cryptocurrencies many times a day. Unlike traditional markets that rise or drop slowly over time, the value of cryptocurrencies can change drastically in minutes. Traditionally this practice involves placing bids on multiple calls simultaneously to lock in a profit before other traders notice significant fluctuations. Day trading is not easy, and it requires discipline, but done right can yield considerable profits even more quickly than hold strategies do. To be successful and efficient at day trading, you need to read charts and understand technical indicators such as moving averages and oscillators like RSI (Relative Strength Index) and MACD (Moving Average Convergence/Divergence) Stochastics RSI.

  1. How to start day trading crypto?

Now that you know what exactly day trading is, it is time to get your feet wet. There are several effective methods by which one can start day trading.

You either start by depositing money into an exchange or creating with no funds at all. I am explaining the latter in the following paragraph. If you do not deposit any money into an exchange initially, then you obviously cannot trade.

Market Making:

So how will you profit? It is where ‘market making’ comes into play! Market makers create little coins for sale below the current market price and high buy orders above the current market price. When you place these orders, they contribute to creating a ‘liquidity pool, which means that there are people who want to buy, and on the other side of the order book, there are people who want to sell. The difference between these orders is your profit.

Risks associated with this strategy:

Keep in mind that this strategy has its risks; you will need time to fill your orders, so you can get ‘liquidated’ if it takes too long, which means that you get a margin call and depending on how much money you had initially contributed towards creating liquidity, you might lose some or all of it. So what you essentially do is walk up and down the highs and lows, whichever way they seem fit; however, it comes with experience.

Additional Option:

Another option you have is to contribute your funds towards creating liquidity on an exchange. You can do this by simply placing market orders, which means that you are willing to purchase it at this price, whatever the coin’s current price is. As mentioned above, there are risks associated with this type of trading or investing, as it may turn out. Still, if risk management is applied correctly, one can gain significant profits without any hiccups! For example, assume Bitcoin’s price increases by 1% in a day; if you bought Bitcoin at the market price and sold it back at the end of the day, then you would gain approximately 0.97 BTC (at time of writing). If, however, Bitcoin had decreased in value by 1%, then selling your 0.97BTC would result in a loss instead of again.


Here is a simple example of how this works:

Assume the current market price for Bitcoin is 1000 USD/BTC, and you have 1 USD to invest initially. You decide to purchase as much BTC as possible (1% of the total amount of available BTC) at the latest market price, which is $100 (I am rounding this number off for ease; it makes no difference if you use 100 or 1000 USD, but I prefer using 10x-100x of the actual value). The next day Bitcoin’s price increases by 1%, so now your initial investment of $100 becomes $101. If you were to sell your Bitcoins at this point, you would get $101 for every BTC. This $101 is made up of your initial investment ($100) and the extra 1%, which gives you a total of 100+1 = 101 USD in profits, thus turning your initial investment into a 100% return ($100 into $101).

Now, if Bitcoin had decreased in value by 1%, you would still have made 0.999BTC, but when selling them back, this results in a loss of approximately ($100 -$99) or -0.01BTC (at time of writing).

  1. Tips for day trading crypto

Crypto trading is a volatile space. It can be challenging to understand what you are doing and even harder to make money consistently. But some tips will help you get started with crypto day trading. Here’s how!

  • -Know the market trends of your coin by reading news sources or watching videos on YouTube about it before making trades
  • -Do not use all of your capital in one trade. Only set aside 10% of your total portfolio for each trade
  • -Track coins in an excel spreadsheet so you can keep up with them easier
  • -Watch out for pump and dump schemes when investing; this means buying when the price is high (pump) then selling after it goes back down (dump). These schemes aren’t all bad, as some coins may pump and dump several times before actually having any good news for the price to rise.
  • -A stop loss is a line of code that automatically sells your coin if it reaches a certain point that you set. It is helpful because your stop loss will protect you if you are day trading but do not have time to look out the markets.
  • -Don’t spend more than an hour each day trading; leave it overnight and see if there were any significant changes in the market the next day (up, down, or even sideways)
  • -Do not invest too much into one coin. Most new traders make the classic mistake; they put all their capital into one trade rather than spreading it out over many transactions. If this coin plummets overnight, then you’re stuck with a large amount of money tied up in one place. Many people say, “Well, no worries because crypto is volatile, so I’ll just wait for it to come back up.” Sure, this may happen, but what if it doesn’t? What if you have to wait several months to be able to sell it at a reasonable price? That’d suck.
  • -If you enjoy day trading, only do so with coins that are under $5. If your currency does not meet specific percentage increases in short periods, it will take more capital out of your portfolio than you previously put into it. Therefore, don’t use trading as an opportunity to get free money by buying something for cheap and selling it high. Only trade actual profits that can give you greater returns down the road.
  • -Take breaks every hour or two while trading; go on Facebook or YouTube until you feel like coming back or even play a video game! It’s to lose track of time when you’re in your zone, and before you know it, 3 hours have passed.
  • -Remember, crypto trading is a marathon, not a sprint. You will see other people’s portfolios growing much faster than yours but don’t compare yourself to them! Finally, if you stick with it long enough, your portfolio may increase from 0.3 BTC to 1 BTC to 3 BTC…that means even if it takes another year for this, after two years, you would have tripled your money! That’s something no one can take away from you 🙂


  1. Day trading mistakes and how to avoid them

4.1 Not controlling emotions

Your mind is a powerful weapon when trading but also a dangerous one. Because of the market’s natural fluctuations, you can end up making decisions that are not rational. If your investments seem to be going against your strategy and you feel powerless over them – it means that your mind has taken control from you, and you’ve lost focus. You have to remember that “you should never take things personally in the financial markets.”You need to stay focused on what you’re doing and become self-sufficient enough to make choices based on facts rather than feelings.

4.2 Day trading blindfolded

This mistake consists of following only a single trend without analyzing others or trying to predict them. It’s like driving a car and looking only through the rearview mirror; we know we should make predictions about upcoming events, but too often, we try to avoid doing so – it seems like an impossible mission. However, it would help if you didn’t ignore your analysis: make sure you stay aware of other market movements and their probable effects on your investments. As for technical studies (see chapter 2), they’re just as important as ever!

4.3 Ignoring risk management

The best way to succeed at day trading is not to take too significant risks for our account size or strategy. Let’s say that you are willing to open a new position with 5% of your capital as soon as possible under certain conditions: it doesn’t matter which market conditions these are, but let’s say it’s a given. If the 5% of your capital was $500 and you have other positions open for other cryptocurrencies, then you should never put more than $50 at risk on any single trade. Risk management is critical because if something goes wrong, this could easily ruin your day trading career.

4.4 Not knowing how to manage profits properly

This mistake consists in closing our position as soon as we see that it’s beginning to go against us instead of waiting for it to recover its initial value or make another decision – like adding to our position with additional funds. We should always avoid making hasty decisions because they’ll only lead us to lose money quickly! So, if you see that your investment is beginning to go against you, the best thing you can do right now is nothing. If this goes on, lower your position size but never close it immediately because if it recovers its value, you’ll miss out on much money!

4.5 Trying to take advantage of all markets at once

This mistake consists in trying to compete with institutions and other experienced traders instead of focusing on what we’re good at technical analysis and understanding market trends. We need to remember that we’re not going to become successful day traders overnight – so try limiting yourself only to one or two assets for now and expand your portfolio gradually as you get better at analyzing their charts. Allocate money for additional positions only when you already have some experience.

How to day trade crypto: Conclusion

Do you want my honest opinion? I only recommend day trading cryptocurrencies through the Cryptohopper app (currently in beta). Once it gets out of beta, they will offer A LOT more features that can help you learn how to trade cryptocurrencies successfully. Plus, the best part is that they provide 24/7 support, and they are super friendly, so if you ever feel overwhelmed, shoot them an email with your questions! ​​​Lastly – My friend has been making over $100k per month using this method for quite some time now, so don’t miss out on this opportunity! It’s free, so there is no risk.

Featured Image: Photo by David McBee from Pexels

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