A Beginners Guide To Day Trading Cryptocurrency

Photo by Executium on UnsplashI have been trading cryptocurrencies on Binance for a few months now. EToro supports debit/credit cards, e-wallets , and bank transfers. This is because the eToro platform is denominated in US dollars. If you’re based in the US then there is every likelihood that you know about Robinhood.

how to become a crypto day trader

Leverage Technical Analysis – Make use of solid technical indicators such as OBV to help you justify each of your trades. Even though a trading platform seems easy to use, it is also important to consider how easy it is to reach the help care desk. You can check Reddit and other relevant places to read reviews about a platform’s customer support efficiency. When it comes to crypto portfolio management, you want to know how much of a particular asset you hold and where it is stored.

Crypto Signals For Day Trading

Since these levels are more extreme, the signal will be more reliable. Similarly, if the market is oversold, a price increase would be expected. If the market is overbought, one would expect at least a slight price correction/decrease. The RSI compares the strength of a markets recent increases compared to recent decreases and is strictly confined to the one market you are looking at, for example, BTC/USD. If a shorter moving average is above a longer one, this signals that the uptrend is still going. On the other hand, if the longer moving average is above the shorter one, this signals a downtrend.

On the other hand, if you’re a complete novice, then you might want to start with less volatile crypto markets. In a similar nature to Bitcoin, Ethereum is a large-cap cryptocurrency that benefits from large levels of volume and liquidity. As the world’s second-largest cryptocurrency in terms of market capitalization, you’ll have no issues finding a suitable platform to trade. If you’re still not sure which cryptocurrencies are the best to day trade for your investment objectives – consider the five digital assets discussed below. As you can see from the example above, the crypto day trader was happy to close their BTC/USD position at a profit of 7%.

how to become a crypto day trader

They are different in that results from trading activities are generally expected within a short to medium-term period. This could be anything from minutes or hours to a few days or weeks. Alternatively, you may want to set up positions that will open if the price meets key levels how to become a day trader – such as around support and resistance levels. It’s not possible to be right all the time when it comes to the crypto markets. Moreover, since the crypto market is still highly unregulated, cryptocurrency day trading can be even less restricted than stock market day trading.

Trading Times

But which is the best online trading platform for day tradingcryptocurrency? Just go toBinance, convert yourfiat currency to cryptocurrency, and get started right away. Before trading cryptocurrency, you should be aware that you risk losing your money to the market. If you really believe in the future of cryptocurrency, holding your crypto assets for the long term may be more beneficial than trying to time the markets.

how to become a crypto day trader

Andrew Munro was the global cryptocurrency editor at Finder, covering all aspects of cryptocurrency and the blockchain. Andrew has a Bachelor of Arts from the University of New South Wales. Earn US$10 in BTC when you refer a friend and they purchase $100 of cryptocurrency. On holdings, pay with your crypto for cashback at stores, get loans and more with this complete crypto-finance platform. Trade a handful of leading cryptocurrencies with this easy to use mobile app.

To help you out, we have created this detailed guide to cryptocurrency trading for beginners updated for 2021. This assists traders with spotting trends, including the identification of support and resistance levels. Day traders must maintain a balance of $25,000 or more in their brokerage and meet other criteria in order to file taxes as a day trader. If you do not have enough money to buy into certain cryptos, then an app like Robinhood will allow you to buy fractional shares of the most popular coins. One influence on support/resistance levels is the fixation on round-number price levels by inexperienced or institutional investors. You might try automatic crypto trading with software like Coinrule if you’re looking for a crypto trading strategy.

Fundamental Analysis

One of the first things that you will need to learn when day trading crypto is that digital currencies are bought and sold in pairs. For example, at eToro, the platform allows you to trade both fiat-to-crypto and crypto-cross pairs. Although the platform is typically used by traders with little to no experience, Coinbase Pro has since been launched for seasoned Finance investors. Not only does this come with more markets – including crypto-cross pairs, but more advanced tools and charting features. Furthermore, Coinbase Pro utilizes a maker/taker pricing structure like Crypto.com, and this subsequently translates into lower fees. Coinbase also offers a mobile trading app for iOS and Android, as well as a secure crypto wallet.

Can you get rich off Robinhood?

In general, trading on Robinhood is not more risky than trading on any other platform. However, Robinhood’s margin trading feature is risky for the average investor. Trading with money that is not yours is very risky. If you borrow money and the share goes up, and you sell in time, you can make a big profit.

Traders profited by simply purchasing Bitcoin on U.S. exchanges and immediately selling it on South Korean exchanges. Although the discrepancy will not usually be this large, the low barrier to entry for new exchanges brings new arbitrage opportunities more often than in traditional asset markets. The Chicago Mercantile Exchange offers options on Bitcoin futures, opening up a wealth of volatility strategies for traders. Volatility trades are ideally directionless, meaning there is a possibility of making money whether Bitcoin goes up or down.

Step 3: Pick A Crypto To Invest In

Refers to a situation where a government regulation or policy negatively impacts an asset or a trading platform. This could lead to liquidity problems if buyers for your asset are barred from purchasing it. Also, if a trading platform is banned from your jurisdiction, you could end up losing your funds stored with the exchange. Since the stock market has been around for ages, regulators have had enough time to develop and implement rules and regulations governing the market’s conduct.

What do I need to be a day trader?

Once you’ve got a broker, to be considered a pattern day trader by the Financial Industry Regulatory Authority, or FINRA, you’ll need to fund your account with $25,000 and make four or more open-and-closed stock trades within five business days – and those trades must represent more than 6% of your total trading …

Ledger is a great hardware wallet brand many investors trust to store their crypto assets on. If you’re looking for a software wallet, there are several options on iOS, Google world currencies Chrome and Android that are free to use. And one of the best ways to learn this is through price action; the technique that the majority of professional traders use.

How Can Arbitrage Be Employed As A Day

And as such, if you’re just starting out in this space, Coinbase might be the best platform for your skillset. In a nutshell, Coinbase has been offering crypto trading services since 2012 and its platform is primarily used by beginners. This is because you only need a few dollars to get started and accounts take minutes to open. Different plans for all levels of traders include the Starter, Hobbyist, Trader and Pro. Each plan helps you build your skills and knowledge to become better at cryptocurrency trading. The platform is one of the best for digital currency trading and learning how to be a consistently successful crypto trader.

How many hours do day traders work?

Your total time commitment should be about 15 hours per week on the low end and up to 40 hours per week on the high end (if you’re trading most of the day). In the U.S. market, the most active time for stocks, currencies, and futures is near the market’s opening time each morning.

While traditional buy-and-hold investors are concerned with the long-term performance of a company, day traders seek to take advantage of more immediate profit-making opportunities. Technical analysis is a trading discipline predicated upon the idea that a trader could predict an asset’s future price movements, given its historical price action. TA uses a host of technical indicators to achieve this, including trade volume, moving averages, trend lines, candlesticks, chart patterns, and more. At the end of a technical analysis, a trader should have identified trading opportunities and a potential entry point. In the case of cryptocurrencies, a trading portfolio will likely consist of Bitcoin and altcoins. Many cryptocurrency traders use support and resistance levels to bet on the direction of the price, adapting on the fly as the price level breaks through either its upper or lower bounds.

Traits Of A Successful Options Trader

Similarly, if you are on the 1-hour chart, 100EMA uses the last 100 hours of price data. EMA is designed to be less of a lagging indicator than SMA, so it is more affected by current price movement. With divergence, the longer time scale you are on, the stronger the signal is.

Is becoming a day trader worth it?

Day traders rarely hold positions overnight and attempt to profit from intraday price moves and trends. Day trading is a highly risky activity, with the vast majority of day traders losing money—but it is potentially lucrative for those who achieve success.

If so, we are now going to show you how to use a crypto trading platform. For our tutorial – we have opted for regulated broker eToro – which allows you to buy, sell, and trade digital currencies on a 0% commission basis. There are no fees to register and USD-denominated payment methods are free. Otherwise, you will pay a small FX conversion charge of just 0.5%.


There are hundreds of crypto platforms and Bitcoin exchanges that allow you to buy, sell, and trade digital assets online. On top of licensing, you also need to consider what crypto markets the platform offers, fees and commissions, trading tools, and supported payment types. For prospective day traders, certain websites allow users to track and copy the most successful traders on the platform. Below are some of the most popular trading strategies in the crypto day trading game.

  • On the other hand, if the longer moving average is above the shorter one, this signals a downtrend.
  • CoinMarketCap is a good free resource to read and gauge the market volume of any particular coin.
  • Tokens like MANA and SAND are in-game currencies for the blockchain based metaverses Decentraland and The Sandbox, respectively.
  • This means we’ll sell your cryptocurrencies in the order you bought them.
  • Though the broker could do more to improve its customer service, it’s an excellent option for beginner investors and seasoned professionals alike.
  • Being able to detect patterns and cycles in the market is crucial for having clarity from the macro perspective.

Our platform includes access to advanced stock trading techniques and more. There are also various beginners and advanced guides online that you can check. Additionally, exchanges and wallets’ official websites have training materials and video guides that can be helpful for you.

There are two main techniques to use to analyze and evaluate cryptocurrency. The techniques have existed for generations and have successfully been implemented for traditional financial assets. Often they are used complementary to each other, but it is possible to apply either independently. You can easily create an account in an exchange and start trading in a matter of minutes. The crypto market may be innovative and revolutionary with the assets designed to append the current financial system.

Can you start day trading with $500?

Day trading is possible with only $500. But there are several things you need to consider as you grow this initial investment. With the right learning, practice, and strategies, you can minimize day trading risks and capitalize on better odds for success.

The current market price is 200, and you decide to sell 5 contracts to open a position at this price. You believe that the price of ether – the token of the Ethereum network – is going to fall in value, and decide to go short by selling ether against the US dollar (ether/USD). Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Wire transfer is typically your cheapest option to fund your account –– it’s free on Coinbase and Gemini. Also, keep in mind that the market provides endless opportunity. So don’t bite your head off if you’re playing cautious and miss one, and don’t chase the gazelles that have already run off of the farm. Trading is more than anything an emotional journey — you must keep a clear head and stick to your chosen strategy through thick and thin. Anyone interested in earning interest on their crypto investments. Though the broker could do more to improve its customer service, it’s an excellent option for beginner investors and seasoned professionals alike.

Author: Annie Nova