Day trading cryptocurrency can be a lucrative enterprise. The underlying principles are simple: opening a position at one time, closing it at another, and repeating the process several times within the same day. The goal of day trading crypto is to profit from smaller wins based on predictable price movements. While this can be a high risk business, if done correctly, it can be very lucrative. If you’re new to the field, here are some things to keep in mind.
First, you should know what the market cap is. A crypto’s market cap is a good way to measure its stability. Some traders claim that you can earn 100% to 200% of your initial investment in a month. Then, you can follow a successful trader’s moves by using copy trading. This will ensure that you don’t lose all your money or get stuck in a losing position. You should only invest what you can afford to lose and can sustain your losses.
Next, you should decide which cryptocurrencies are best for you. A day trader will enter a position and close it quickly. This approach requires a good understanding of technical analysis and drawing tools. It’s best to stick to cryptocurrencies with upward-trending prices. If you don’t have the time to study the market, you can opt for copy trading. eToro offers copy trading services to more than 20 million clients.
Another consideration for a good day trader is the liquidity of the exchange. In crypto, there’s no such thing as a “closed market,” so you’ll need to find an exchange with a tight spread. It’s important to remember that spread is a percentage difference between the bid and ask price. You’ll want to make gains greater than the spread if you’re serious about day trading crypto. One example of such a spread is BTC/USD at 0.75%.
Other things to consider when day trading crypto include fees. In general, you’ll need to pay fees for the exchange’s services. For example, fees for trading cryptos on exchanges can range from a few dollars to several hundred. In addition, you should be aware of regional differences in rules. You don’t want to end up losing all your hard-earned money due to unforeseen regulations. In addition to trading fees, there are also other expenses that you may incur.
One indicator that’s crucial to day trading crypto is the RSI (Relative Strength Index). RSIs measure market momentum by looking at data from various charts. The RSI of Bitcoin compares its closing price to the highs and lows of its last 14 days. This lagging indicator allows traders to determine a trend’s strength and predict when to buy or sell. A lower RSI is more favorable for beginners, but you’ll still need to follow some basic rules.
The best crypto to day trade is Lucky Block’s LBLOCK token. The Lucky Block token is a highly valuable asset backed by a solid project. Lucy Block launched in January 2022. The platform uses blockchain technology to promote online gaming. This means that it can be traded at high speeds. With such high speeds, Lucy Block is on the verge of disrupting the global gaming space. If you’re thinking of trying it, make sure to choose a few cryptocurrencies that offer a good chance for success.
AvaTrade is another great platform for day trading cryptocurrency. It allows you to buy and sell crypto against a number of fiat currencies and is commission-free. It has an excellent reputation in the crypto industry and is regulated by several financial regulators, including the UK FCA and the US CySEC. As a bonus, eToro allows for zero fees when depositing and withdrawing your USD balance. You can also invest with eToro’s CryptoPortfolio, a diversified basket of digital currencies.
Lastly, remember to set a stop-loss order before you begin trading. This is the price at which the platform will automatically close your position. This is extremely important because the crypto market is highly volatile and you don’t want to end up losing money on a trade that doesn’t work out. Also, remember to set stop-loss orders on your trades so you don’t burn your account balance. There are many ways to protect yourself while day trading crypto and making smart investments.
Aside from day trading, a successful strategy also involves identifying high-volume cryptocurrencies. While you can target any digital currency for day trading, it’s important to be aware of the price volatility and liquidity of the digital currency that you’re trading. Day trading is the best way to take advantage of short-term trends, so you’ll want to select cryptocurrencies with high liquidity. Furthermore, high volatility means higher profit opportunities. This is especially important when you’re trying to time your trades right.