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Cryptocurrency is a new form of currency that has been gaining in popularity in recent years. It is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units.
Day trading is a type of trading that takes place on the day’s open and close. It can be done with any asset, but it is most commonly done with cryptocurrencies. The how to pick crypto for day trading article will teach you how to find coins that have been performing well in the market recently and trade them accordingly.
Day trading altcoins is a new idea, but it’s difficult to master as a novice in these marketplaces. Because these speculative markets are so volatile, veterans have a significant edge. There are many bits of advice available, but just a handful will really benefit your bottom line.
Take a look at the tips below from cryptocurrency trading professionals with over seven years of expertise. These cryptocurrency trading strategies can help you maximize the return on your investment.
You’ll notice that many of these suggestions are different from what you’ll typically see on the internet. Please do yourself a favor and go over this whole list of useful cryptocurrency trading advice.
#1 – It’s Profitable to Scale Small Price Moves
Scalping tiny price movements for large profits is possible with leveraged trading. A 1% price change becomes a 10% balance variation when using 10x leverage. The upside potential increases dramatically, but so does the danger.
As you can see from the graph above, every 1% fluctuation results in a 10% price change. A 10% price fluctuation may cause your investment to double (or your position to liquidate). Your risk is reduced by placing your stops closer to the “mark price” used by your exchange. In the meanwhile, you may benefit from the upswing to a larger degree.
Get some ideas on how to make fast trades extremely lucrative by reading our ‘Scalping 30 Minute Trades – Day Trading Guide‘. Playing volatility is how some of the greatest crypto traders in the world make a livelihood, and this article will show you how to do the same.
#2 – Look for signals on TradingView.
Many traders, from novices to professionals, trade cryptocurrencies and record their trades on TradingView charts. This information may be shared with the rest of the world. Then you may look for data to chart for almost any cryptocurrency and BTC trading pair. You’ll also view any other members’ public charts, which will give you an indication of what they believe will happen to the coin’s price.
By clicking on a charter’s username and checking their subscriber count and reputation level, you can see how important they are on TradingView. Each plotted forecast appears in its own block on the TradingView website. The trading pair is shown by the blue text, while the letters adjacent represent the chart’s time duration. Chart your forecasts and compare them to others’ to view things from a new perspective if you’re attempting to improve at predicting price movement.
This is a screenshot of their cryptocurrency section…
Image courtesy of tradingview.com
This graph depicts the performance over time. You may show how much the coin has increased or decreased in value over the last week, month, three months, six months, a year, or year to date.
This information is accessible in both USD and BTC, making it very helpful. If the altcoin market bubble resumes after the early to mid-2018 price lulls pass, you can easily identify which cryptocurrencies have the greatest potential to expand.
#3 – Stay away from Pump and Dump Signals
Everyone wants to be able to discover lucrative trading signals as soon as they occur. The issue is that bots are ahead of the game, and the signals that are publicly released are largely trash. Poor pump signs are often posted in crypto forums, Discord and Telegram groups, and cryptocurrency sub-Reddit sections.
Essentially, you don’t want to be caught purchasing a currency that everyone is promoting right now. On the /r/ethtrader and /r/cryptocurrency sub-Reddit groups, for example, you’ll see a specific alt or two getting insane buzz for a week or so. The coin may seem to be a fantastic purchase, with a potential return of 10 to 50 times, but another “golden move” will be the talk of the week next week.
The issue is that the shot callers keep bags in their hands before signaling you to purchase. When the signal is given out or soon after, these individuals sell their shares to you. The coin’s purchase support vanishes quickly, leaving many people with depreciating coins they don’t want to keep.
A coin’s price almost never rises significantly and then stays there. When a long-term cup and handle pattern breaks to the upside, this is the most frequent situation.
When the handle on POA (POA Network) broke to the upside, prices remained 30-50 percent higher than previous levels. This important TAplay may be seen in this TradingView user’s forecast…
The cup and handle were created over a lengthy period of time. The handle would either signal a strong move down or raise the price to a new trading range. As you can see from the upswing that occurred when the handle resistance broke, the latter occurred in this instance…
#4 – Trust TA instead than people.
Many technical analysts who make forecasts have an ulterior motive. They may use their clout to persuade their followers to invest in low-market-cap currencies. The influencer will usually only advertise the admission opportunity to influencers once they have secured a place in the currency. The ultimate consequence is that you’ll get dumped on straight away or very soon.
Some crypto trading gurus with clout can provide sound advise. A few day traders, for example, (such as ‘Philakone’) record and broadcast their plays and position sizes. Without hesitation, these specialists can hop onto any chart and analyze everything in front of you. Those that make live calls are more responsible, and if they don’t provide outcomes worthy of a follow, they will soon be exposed as a bad analyst.
Even yet, seeing day traders in action provides a unique viewpoint. This method of learning exposes you to the logic behind a “chart reader” and puts the numerous candles and chart patterns you hear about all the time into perspective.
Returning to our TradingView suggestion
You can discover traders who regularly produce excellent calls and follow them. To obtain accurate price forecasts, look for traders with large subscription numbers. Alternatively, read the section below for information on how to locate some of the most prominent experts.
Image courtesy of tradingview.com
Many prominent traders provide chart forecasts for Forex, commodities, and other markets. Even general analysts, on the other hand, prefer to cover cryptocurrency (or, at least Bitcoin). To set themselves apart, some users add crypto words in their names.
‘CryptoManiac101′ is an excellent technical analyst who often shares his predictions on different cryptocurrency trading pairs. He has over 1 million views, 3,500 followers, and over 6,000 likes as of this writing.
Many of his transactions happen as predicted, but he also publishes updates as action unfolds, and many people react with their own charts that match or refute his forecasts. Check out the published charts on TradingView for plenty of excellent TA perspectives!
Tip: Don’t be afraid to go back and listen to past calls. Examine 2017 forecasts to discover how (and why) that individual was correct or incorrect. Consider the unexpected price direction shifts, such as huge short squeezes that averted Bitcoin’s “certain collapse” (everyone went short when China “banned” Bitcoin), providing additional fire for an upward wave when $3,000 support was established in September of last year.
#5 – Safeguard Your Assets
It may seem foolish, but you should safeguard your assets in every manner possible. Do your homework before depositing money into any wallet, website, or other account. Keep up with the most recent happenings in the crypto world. Store an eye out for security issues at any exchanges where you keep your money, for example.
If you’re actively trading on an exchange, only leave money there. Aside from that, the money should be held in “cold storage” to ensure their safety. That way, if your account or the exchange is hacked, you won’t lose your money.
Don’t forget about the stop-loss feature.
Above all, keep the stop loss function’s value in mind. You never want to wake up to find Bitcoin has lost 30% of its value overnight. Do you know what occurs when Bitcoin’s value plummets in a short period of time?
The market for altcoins is as follows…
If this situation happened, your altcoins’ satoshi value would plummet by the same amount or more. If you owned $10,000 in altcoins and they were worth 30% less, your $7,000 in BTC would be worth $4,900 in conventional currency. Failure to use appropriate stop losses may result in a 51 percent loss of money. A 5% loss would be $9,500 BTC, which would convert to $6,650 in conventional currency. If Bitcoin’s price falls below a certain threshold, you may always use a bot to liquidate your alts and subsequently your BTC holdings.
You may even take it a step further by adding a trailing stop. The transaction is initiated when the price hits a particular high point. Once it falls below a certain price, you’ll be forced to sell. To learn more about how the trailing stop function works, look at the examples below.
Let’s say an altcoin is valued $25 at the time of purchase… If the price rises over $40 (your goal), you sell if it falls below $35, ensuring a $10 profit. This strategy is a safe bet, but it helps you prevent losing out on profit opportunities. It’s especially useful when scalping short-term price surges to guarantee you earn money and don’t wind up holding a bag.
#6 – Find out all there is to know about market capitalization.
CoinMarketCap.com is a popular source of cryptocurrency market capitalizations and other useful information for investors. They sometimes experience problems with some of their listings, but their staff usually resolves the issue within a fair amount of time. They’re really a #1 source for market cap information, with hundreds of currencies and digital assets listed and data pulled from numerous exchanges.
We suggest that you go to their website and do a search for several cryptocurrencies that interest you to discover how useful their database is. For example, Golem was just added to Binance… Let’s take a look at the one on CMC for a minute.
This is a screenshot of their profile page:
Image courtesy of Coinmarketcap.com.
Section on Markets
Here’s a link to their Markets section (click the arrow next to USD to change price figures to BTC). Visit this page to compare prices across exchanges for potential arbitrage possibilities – in case of API latency, double-check the price on the other exchange’s site. Pay close attention to volume and solely evaluate price strength on the biggest exchanges.
Image courtesy of Coinmarketcap.com.
Section “Social”
If the project has a Twitter account or a sub-Reddit area, you’ll find it here. Check out the coin’s Twitter account to discover what fresh releases or rumors have made their way around the internet.
Data from the Past
This area may be the most underappreciated of all the data collected by CoinmarketCap. The fiat price of the currency by day, the market cap value by day, and the trading volume by day are all shown here.
Image courtesy of Coinmarketcap.com.
When attempting to assess if a sudden pump is sustainable, make use of previous trade data. You can calculate how much more expensive it is today than it was before. At the very least, this information will show you where the price will come to a stop to test a resistance level. Alternatively, you may discover that the price has been steadily increasing in recent months and will have to skip the transaction entirely.
We can observe a currency that can climb 10% further before requiring a volume breakthrough in the screenshot above (but the current lack of volume is concerning). Unless Bitcoin displays some bull legs, nothing positive is going to happen. If the price falls, a large amount of volume on the negative side is required to break below 5%-10%. A 20% drop would very certainly need significant negative news or another crypto market collapse.
*Trade past data while keeping the current state of the Bitcoin market in mind. If BTC is generally bullish, the altcoin market will be able to absorb price increases easier and have a higher chance of breaking resistance. All traders attempt to assess a coin’s market cap in order to determine if it is cheap, but we must keep in mind that the impression of a large market cap is subjective.
The fiat value of a cryptocurrency will fluctuate depending on market sentiment at the moment. Altcoin prices may tumble significantly in hours to days if BTC is excessively pessimistic. The inverse is also true: if BTC is excessively optimistic, altcoin prices may skyrocket, although this isn’t always the case.
Understanding the Data on Coin Supply
Both “Circulating Supply” and “Total Supply” statistics are included on their currency profile pages. Depending on who you ask, the definitions for these words may differ, but here’s how they view it:
“Total supply refers to the total number of coins in circulation right now / Circulating supply refers to the best estimate of the number of coins circulating in the market and in the hands of the general public.”
You may also see a “Max Supply” number, which is just the best estimate of how many coins will ever be produced. Some cryptocurrencies will continue to expand indefinitely, with no limit on the number of coins available.
As an investor, bear in mind that when the altcoin market isn’t in a huge bull run, deflationary crypto assets suffer the most (STEEM suffered severely before the late 2018 crypto boom).
#7 – Make Use of Catchy Fundamentals
It’s difficult to express this suggestion in words.
Some aspects of a coin’s fundamentals have been shown to enhance its value. Traders that have been in the business for a long time will know what makes a difference. Many aspects will be discussed and suggested as worthy of consideration. Only a seasoned trader will be able to identify a bullish trigger.
Here are some key characteristics to look for in younger, low-market-cap currencies. We recommend keeping these in mind when day trading cryptocurrencies if you intend to purchase and hold for the medium to long term.
Masternodes
Masternodes let individuals to profit from their investments. This currency basic encourages staking, which locks up more supply and lowers the quantity available on open markets. Masternode coins with low market capitalization but bright prospects may be used as lottery tickets. For example, if you invested in DASH early and acquired masternodes, you would almost definitely be worth a million dollars today now.
Why are people so enthusiastic about masternode coins? Because masternodes provide a passive revenue stream. You’ll not only be speculating on the coin’s value rising, but you’ll also be receiving additional payments for as long as you keep your holdings.
New Listings on the Stock Exchange
You should keep an eye out for new listings on crypto exchanges. When the news is made, the value of these coins typically rises significantly. Traders predict that as the number of purchasing options expands, demand will rise. Furthermore, the trading supply will be distributed across multiple exchanges, resulting in increased purchase strength.
For speculators, not all new exchange listings are lucrative. If the market mood is favorable at the moment, this kind of news is worth trading for a fast scalp. Many currencies increased in value from 40 percent to 400 percent in a short period of time after being launched on Binance (a fast-growing crypto exchange) in early 2018.
You want to get in on these announcements as soon as possible and avoid getting in on the action if the currency has already inflated significantly in previous days/weeks. Use a software like ‘Crypto Tracker Bot’ to get immediate notifications whenever a new currency is rumored to be listed on any major exchange (for example, when a coin is “tested” by an exchange).
Here’s a look at how the Crypto Tracker Bot works…
This software is compatible with a variety of cryptocurrency exchanges. Binance, Bitfinex, Bithumb, Bittrex, Coinbase, Huobi, Kraken, and Kucoin are some of the more well-known names.
Many traders lose a lot of money when they purchase a new coin listing blindly, particularly on Binance, where millions of people trade. The trick here is to look at the coin’s market cap history (which you can do on CoinMarketCap.com) and see whether it has previously been pushed.
Also, bear in mind that unless an exchange listing coincides with a long-term trend reversal, high-market-cap coins won’t gain anything from it. While low-market-cap coins are generally riskier investments, catching a big exchange announcement early may result in a 50-200 percent return in minutes or hours.
Growers with a Different Price
- The coin catches fire.
- Coin supply is limited.
- MVP has already been released.
- Lockups for team and advisor tokens
- Profitable mining with a strong network
- Influential crypto traders provide coverage.
- With excellent credentials, lead developers are in high demand.
- First-come, first-served license and regulatory clearance
These are only a few of the many potential basics for a coin. On a coin-by-coin basis, you’ll gain a clearer sense of what matters to speculators and what generates excitement over time.
#8 – Pay attention to a variety of crypto media sources.
The crypto industry has expanded at a breakneck pace. Previously, Reddit would be flooded with all news articles. Prior to that, everyone checked the Announcements section of BitcoinTalk to stay up to date on the newest bitcoin news. Everyone is now engaging in a variety of ways, including chat rooms, Github, LinkedIn, Reddit, Steemit, and other platforms.
The idea is that news may be obtained from a variety of sources. When there’s a lot of buzz about a coin you own or want to trade, you’ll want to keep up to date on the newest developments. You may also aggregate news, such as by using CryptoFlash.io to see what’s fresh (real-time crypto news source).
Here’s an example of what a news aggregator performs…
Image courtesy of CryptoFlash.io
Isn’t it convenient?
You may also visit crypto news websites on a daily basis. CoinTelegraph, CoinDesk, CCN.com, CNC, and Forbes are the most trustworthy sources. Many announcements are promoted or announced through social media, particularly on Twitter – look for any currency that interests you on CoinMarketCap.com and utilize the ‘Social’ tab to discover the newest tweets from the project.
You should be cautious about which sub-Reddit sections you depend on for news. Use Reddit to look for links to popular news articles that you can understand. You may also use Google News to tailor the way key crypto news is shown.
While actively trading, the most trustworthy Reddit sub-sections at the present are /r/cryptocurrency, /r/ethtrader, and /r/bitcoinmarkets — sort by Top first, then by New (to catch scalps based on small bumps from news). Check out the sub-Reddit sections for each cryptocurrency.
#9 – Put your trading strategies to the test first.
Assume you’re creating a bot. What changes would you make to make it more profitable? Iterations would be used to test any changes. You’d create a testnet version and tweak it until you discovered the ideal, winning approach. You may still monitor and test on a much smaller scale by writing down your trades and settings on paper.
Simply choose dynamically your entrance and exit locations. After that, utilize a Bitcoin CFD platform’s demo or practice account to observe how your trades perform. Then, once the iterations have been completed, compare the results. To get the maximum benefits, include the most lucrative code into your bot.
How difficult is it to create a trading bot? You’ll need to be able to code. Many languages, including Java, JS, and PHP, may be used to create a trading bot. Python is the most often used programming language for crypto trading bots.
Trading bots that are adjustable may also be purchased. If you’re not sure about your coding skills, this option offers you the basic essentials. There may be certain restrictions, so consider the benefits and drawbacks before investing.
Finally, stay dedicated.
Take the time to learn from others, from your own errors, and from how not to set yourself up for failure. It’s OK to start with testnets or practice accounts to ensure you understand how to execute a successful strategy and safeguard your money.
Everyone has to begin somewhere. For a time, most successful traders are losers, but they eventually figure out what they need to do to start winning more. Don’t become disheartened; instead, learn all you can and get as much free experience as you can to become a great crypto day trader.
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DISCLAIMER: The activity of the cryptoassets discussed in this paper is uncontrolled. This post is not intended to provide financial advice. Always do independent research.
The how to trade cryptocurrency and make profit is a blog post that lists top 10 altcoin day trading tips.
Frequently Asked Questions
Which coin is best for day trading?
I dont know.
What Altcoin should I buy for 2020?
Currently, I would recommend investing in Bitcoin.
What is the easiest Altcoin to mine?
Monero is the easiest Altcoin to mine.
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