How to Day Trade Crypto Like a Pro? The Smart Trader’s Playbook

The cryptocurrency market is continuously evolving, and so are the strategies to trade in crypto and other digital assets. There are many strategies through which you can make a profit, depending on your capital and other requirements. Here, we are going to discuss one of the most implemented strategies for short-term trades known as ‘Day Trading’. This blog post will give you a clear understanding of how to day trade crypto like a professional trader. 

Day Trading is one of the crypto trading strategies where traders make small amounts of profit with little price movements. This strategy normally includes opening and closing the trade within the same day. For example, you opened the trade at 1:00 pm and closed it at 8:00 pm. It can be any time, but it should be within the time period of the same day. 

There is no official timing of opening and closing the market, like we see in traditional markets. Cryptocurrency markets are open 24 hours a day and 7 days a week, so without time restrictions, traders have the opportunity to choose a suitable time for day trading. That is the beauty of a day trading crypto strategy, where traders can choose the best timeframe to trade and make a profit within a day. 

However, implementing day trading strategies is not as easy as it seems. It requires proper research on the market trend, technical analysis, price analysis, current market sentiments, latest news, and economic meetings. Make sure that you have a good knowledge of all these key factors for positive results through a day trading strategy. 

It doesn’t matter if you are a beginner or a professional trader; you need to have a clear trading strategy every time, regardless of the type of strategy. The following are some of the important suggestions and steps that will help you significantly implement the day trading strategy in cryptocurrency. 

Select a Suitable Time Period 

You need to select the time frame based on your trading objectives and availability. For example, there are 4 most popular and significant intervals that most traders use for day trading, including charts for 15, 30, and 60 minutes, and 4 hours. The short time frame of the chart allows you to make a profit instantly, while the longer time period requires broader technical and price analysis. 

Conduct Technical and Price Analysis 

Technical and price analysis is the cornerstone of day trading. Once you have learned to read and analyse the candlesticks and understand the patterns, you can make sound decisions based on data analysis and current market sentiments. 

There are plenty of indicators that allow you to conclude the patterns and take the right trading decisions at the right time. Bollinger Bands, Aroon, Average True Range, and Commodity Channel Index are some of the many significant indicators. 

Prepare for Risk Management

Risk management is one of the key factors to consider when it comes to trading cryptocurrencies, commodities, or any other digital asset. Always make sure that you set SL (Stop Loss) and TP (Take Profit) for every trade you open. 

This will allow you to manage your risk significantly without losing all your capital within a single trade. Make sure you only risk your capital in the range of 1% to 2% on a single day of trading. Assess the level of your risk tolerance so that you can set clear boundaries. 

The amount of profit a day trader can earn is entirely dependent on the level of skills, experience, capital, and the currency conditions of the market. There are traders who make hundreds and thousands of dollars every day, while some also face big losses with the intraday trading strategy. The following are some of the factors that determine the profitability of the trades. 

• The highly volatile crypto makes the most effective price movements and creates a lot of profit opportunities for the traders. 

• Profit earned by day traders depends on the boundaries you set for every trade and the amount of capital you have in the account. 

• Strategies with high frequency can make small but consistent profits. One such strategy is Scalping, however, it demands regular discipline and great focus throughout the trading sessions. 

Choosing the right cryptocurrency for day trading is very important. There are certain factors that you must consider in a cryptocurrency before implementing the day trading strategy. Let’s see and discuss these factors one by one.

Highly Volatile In Nature 

Make sure that you choose a cryptocurrency for day trading that is highly volatile in nature. For example, BTC and ETH are popular because of their quick price movements within a day. The highly volatile cryptos allow you to lock in the gains within a short period of time. 

Highly Liquidate

High liquidity in the crypto market means that you can buy or sell cryptocurrencies quickly without causing a big change in the price. This shows that there are many sellers and buyers of that specific cryptocurrency in the market that can impact the price movement of the coin. 

Large Market Capitalization 

Cryptos with highest market cap are considered to be more stable than those that dive in one direction instantly. It is not only good for beginners but also for expert and experienced traders in the market. These types of digital assets give a secure entry point for day traders. 

Market Sentiments 

Make sure that you stay updated with the latest news and events that have the potential to impact the entire crypto market and directly to the crypto you are investing in. Also, stay updated with the regulations set by the government, trends of social media, and the global economic progress, since these factors can impact the price of the cryptocurrency market dramatically. 

Resistance & Support Levels

Identifying and understanding the resistance and support levels is one of the key helps in finding the right entry and exit points of the trade. This minimizes the overall risk factor and makes your trades positive most of the time. This is indeed a basic yet most effective factor. 

There are some professional and skilled traders in the market with crypto day trading as their primary source of income. However, there is no guarantee of profits for every trade. It is highly recommended for beginners to focus on developing the skills and understanding the crypto market trends before relying on day crypto trading. Traders who have years of experience and are successful invest their money in education and modern tools to make their strategy more effective. 

Market Sentiments refers to the overall attitude and feelings of the investors. When traders or investors feel positive about the market situation, they start buying the digital currency, leading to a bullish trend in the market. Similarly, when traders feel negative, they start selling the crypto in fear of losing more of their capital or earned profit. 

There are many factors that change the entire market sentiment, like social media trends, economic and social news, and international events, that can instantly create big price fluctuations and movements in trading volume. For example, a single tweet from Elon Musk or Donald Trump can cause huge price fluctuations in the market. 

Day trading strategy in cryptocurrency is legal in most countries around the world. However, there can be some specific rules and regulations based on the country you live in. 

• Most governments ask the traders to report the capital gains they made through trading cryptocurrencies throughout the year. Make sure that you understand the crypto tax requirements of the country you are living in.

• Choosing a trusted and big trading platform makes you automatically follow the regulations of the country you are trading in, such as Binance, Coinbase, Gemini, etc. 

• There are still many countries around the world that have banned trading in cryptocurrencies. One such example of these countries is China, which is the second biggest economy in the world. However, some countries limit crypto trading by imposing certain restrictions.

The following are some of the top crypto strategies other than day trading. Let’s see them one by one. 

Moving Average Crossovers

Traders use Moving Average Crossovers to identify changes in the trends of the cryptocurrency. This strategy tracks two moving averages: one that responds quickly to price changes (like the 50-day average) and one that moves slowly (like the 200-day average). 

When the faster average crosses above the slower one, it may signal a buying opportunity, suggesting prices might rise. However, when the faster average drops below the slower one, traders often see it as a reason to sell. This method helps traders catch momentum shifts without constantly watching the charts.

Relative Strength Index (RSI)

The Relative Strength Index helps traders determine if a cryptocurrency is overbought or oversold. The RSI is a number between 0 and 100, with two key levels: 70 and 30. If the RSI goes above 70, the asset might be too expensive and due for a price drop. 

If it falls below 30, the price might be too low and ready for a rebound. RSI doesn't predict the future but gives helpful hints about potential market reversals. Many traders use it alongside other tools to support their trading choices.

Event-Driven Trading

Event-driven trading is based on price changes caused by news or major events in the crypto market. This can include exchange listings, new regulations, partnerships, or tweets from influential people. Traders using this strategy stay alert to announcements and act fast to take advantage of price spikes or drops. 

The main objective is to benefit from market reactions before things stabilize. Since news can quickly affect the market, this strategy works best for people who can follow crypto developments in real-time.

Scalping

Scalping focuses on making small, quick profits throughout the day. Instead of holding onto a coin for a long time, scalpers enter and exit trades within minutes or seconds. They look for small price changes and high volume to build gains. 

This strategy requires careful attention to charts and quick decision-making. While each trade may bring just a small profit, consistent trading can add up. Scalping is not for everyone; it requires a lot of focus and fast reflexes.

Dollar Cost Averaging (DCA)

Dollar Cost Averaging, or DCA, is a simple and steady way to invest in crypto. Instead of trying to find the perfect time to buy, you invest a fixed amount of money at regular intervals, like every week or month, regardless of the price. 

Over time, this helps lower your average purchase cost and reduces the risk of buying everything at a high price. It’s a great strategy for beginners or anyone who wants to avoid the stress of timing the market. DCA helps you stay consistent and committed to your long-term investment plan.

BlockDAG is becoming a popular topic in the crypto community because it solves the slow speeds and blockage that traditional blockchains face. With its unique design, BlockDAG can create multiple blocks at the same time, resulting in faster transactions and less waiting time. This is great news for day traders and active investors.

The interest in BlockDAG is backed by facts. It has raised over $217 million in its presale, and the BDAG token is currently priced at $0.0248 in its 27th batch. Early investors have seen returns as high as 2,380%, and experts predict the price might reach $1 by 2025. 

BlockDAG is also preparing to launch on the top 10 crypto exchanges. This move will increase visibility and make it easier for people to buy, sell, and trade BDAG tokens, potentially boosting interest further as the project gains popularity.

Additionally, BlockDAG offers the X1 Miner app and the TG Tap Miner game, allowing users to mine BDAG directly from their smartphones without needing expensive equipment. This makes it easier for casual users to participate and earn while growing the BlockDAG community. 

With important partnerships, including with football clubs, a global ambassador program, and a built-in crypto coin calculator to help track earnings, BlockDAG is shaping up to be one of the most accessible and promising projects of the year.