Crypto trading has emerged as one of the fastest-growing trends in the recent years. Today, many individuals have started looking it as a highly lucrative area to earn potential gains. Day trading is one of the most popular crypto trading strategies that involves higher risks but offers sky-high rewards to the traders.
Crypto day trading refers to the buying and selling of crypto assets within a single day. It’s an attempt to generate profits from short-term price fluctuations in the market. This kind of trading demands considerable knowledge, discipline, and experience from the traders to achieve success. Let’s understand about day trading in deep:
Table of ContentsWhat is crypto day trading?
There are traders who make several trades in a single day, hoping to end with bigger profits. But this kind of trading is quite risky and rewarding when talking about crypto. The crypto day trading is different from traditional day trading. This is a short-term strategy based on buying and selling of crypto assets on the same day.
Successful day traders rely on a number of tools and resources to capitalize on the short-term market price fluctuations. The successful day traders have a deep understanding and knowledge about the market along with a good chunk of experience. They use technical analysis to create trade ideas along with chart patterns, price actions, volume, etc. Day traders aim to profit off the market volatility.
In a single day trading session, the goal of a trader to take advantage of rapid price changes to extract earnings. If done properly, your assets will be worth more than expected. Now, let’s understand how to pick the right cryptos for day trading:
How to pick the best crypto for day trading?
The best options for day trading actually differ from week to week. The better way to pick up the right investments is to choose the one based on some important guidelines:
- High liquidity
Day traders can take benefit from the crypto tokens which have high liquidity. High liquidity means you can complete your buy and sell orders speedily. All this is correlated with high volume and therefore, liquidity is considered an important metric for day trading.
- Higher volatility
The profits of the day traders come from the change in the price of an asset. If a token is highly volatile, then higher highs and lower lows can increase your profit potential. Most traders choose tokens with higher intra-day volumes to take advantage of the same.
How to perform day trading?
No matter how the market is going on, a day trader must have a thorough knowledge about the crypto as well as trading principles. Only invest how much you are prepared to lose. Here’s what you need to know to get started crypto day trading:
- Choose the right platform to trade
This is the very first step a trader has to take to decide which platform to use. Make sure to choose the right trading platform by researching well. Growlonix is one of the best crypto trading terminal that provide advanced features to place trades. It has the best crypto trading bots for multiple exchanges.
- Choose your investments
Once you have chosen the trading platform, it’s time to pick what and where you are interested to invest.Volatility and liquidity is something that is necessary to participate actively in crypto trading. When choosing what to invest in, consider volatility, trading volume, and asset liquidity.
- Choosing the right trading strategy
There are many strategies available that day traders use to make gains on the short-term price fluctuations in the market. The day trader must devise a winning strategy backed by research and well-plans to enter or exit the trades. Some of the popular strategies used by day traders are arbitrage, bot trading, range trading, long straddle, scalping, etc.
- Technical analysis
Technical analysis is all about studying the market data like historical price, volume, etc. This provides traders withthe science to find opportunities to trade and earn better profits. Traders can apply their strategy to any market as long as they have historical data. In crypto trading world, this analysis can be used as a guideline to evaluate how their past performance can indicate future gains of traders.
Pros and Cons of cryptocurrency day trading
All investments in the crypto trading world are highly rewarding as well as highly risky. Here at Growlonix, we provide the best crypto trading platform to perform day trading. There are numerous benefits of crypto day trading, let’s have a look at these:
- Potential for higher returns
- Low fees and low taxes
- Global access
- Always open 24×7
- Favors both average and large investors
- Benefit from market volatility
- Immediate results
- Flexibility
Cons
- Risks of getting hacked
- Day trading occurs through speculations
- Increased stress level due to 24/7 trading
- Only a few coins can be traded on famous exchanges
Wrapping up
Cryptocurrency day trading can let traders earn higher profits and at the same time, it may cost you significant losses. Therefore, choosing a stable trading strategy is important to avoid making any kind of losses especially if you are a beginner. Despite its risks, this kind of trading will help you to expand your portfolio. Following the above guide and choosing Growlonix for day trading can help you understand what to consider when getting started.
