In recent days, crypto has skyrocketed. Cryptos’ high volatility and liquidity are ideal for short-term trading. Beginners want to know all about cryptos trading strategies and rules. If you are planning for day trading crypto, then you are at the place. This post will learn everything about day trading crypto in 2021.
How to pick crypto for day trading?
You can day trade crypto by picking coins with a high level of volatility and liquidity. Using the Money Flow Index Indicator on the 5-Minute Chart, keep an eye on the Money Flow Index until it reaches 100, and buying for daily MFI is equal to 100 and the next candle is bullish.
Here we will cover details on technique, program, and trading plans. We further explain how to find the perfect one about you by ranking the best crypto brokers in 2021.
5 Best CryptoCurrencies for Day Trading
Newcomers and expert traders equally choose cryptocurrencies that are well-suited to crypto day trading. Especially in recent years, the crypto market has boomed in digital currencies all over the world. Politicians, artists, and common students who are looking to spend a lot of money on trendy cryptocurrencies are one of the intended audiences.
The concept of predicting crypto rates and commodities well for a single day or a few hours is referred to as crypto day trading. It enables making revenue from crypto day trading in a digital wallet. For this, traders forecast a short-term price action of the key coins mentioned below:
1. Bitcoin Crypto for Day Trading
Due to its widespread success across businesses and companies all across the world Bitcoin is projected to be amongst the most popular crypto for crypto day trading in 2021. This currency is excellent for crypto day trading as it has a fixed quantity of 21 million units as well as no chance of being mined.
Just about all enterprises have resorted to using Bitcoin to transfer currencies and execute trades that use a digital wallet. This cryptocurrency is preferred by investors due to its strong volatility and demand in the bitcoin market.
Besides Bitcoin, Ethereum is the 2nd most common coin for day trading in the cryptocurrency world. It is a frequently adopted crypto blockchain platform that enables the formation of new tokens, blockchain-based, and something via (DApps).
In 2021, there is enough unpredictability, liquidity, and volatility for dealers to consider crypto day trading one of their best picks. It is uncomplicated to trade with fast trades, and it has offered numerous potential for revenue in a short time.
3. Binance Coin
Binance Coin is the 4th crypto in the cryptocurrency world. With its trading platform, it is named as Binance Exchange for cryptocurrencies all around the world. Binance Coin is preferred by investors because it was launched on its exchange platform and has a significant trading volume. As a result of this feature, there is a high demand among traders for crypto day trading via a digital wallet.
Ripple was among the most lucrative coins since it uses low and is speedier than Bitcoin. This commodity is considerably cheaper than normal of the cryptocurrencies in the digital wallet for crypto day trading. It can be employed as a gateway to speed things up transactions and trans coordination.
Due to its high volatility in the cryptocurrency market, Tron is likely to be a popular platform for crypto day trading in 2021 with traders and investors. It was established as a solution for promptly and efficiently deleting different types of digital barriers. It is regarded as the speediest blockchain, with a strong volume of trade and predicting short-term price fluctuations.
5 Powerful Day Trading plans To Pick Crypto
You may trade and generate income with cryptos in a lot of formats. One of these trades daily. You will be capable of creating a regular number of dollars per day if you invest in day trading.
1. Open An Account
Pick either you want to buy the coin or if you expect its price will change. You should have an account if you’re going to use cryptocurrencies.
2. Get A Digital Wallet
You can open wallets that provide you huge bitcoin wallets, profits through Quantum AI, coinbase, among others. Remember, that it is possible to lose money. Your capital is at risk during day trading because it is still trading.
3. Prefer The Overbought And Overbought Range
You should give importance to oversold and overbought levels if you’re trading. Overbought implies that investors’ needs are fulfilled. At the same time, commodities will be off, whereas oversold predicts the negative.
4. Take Benefit From A High Trading Volume
Scalpers win by taking advantage of rising trade volume. Swing traders may quit a transaction multiple minutes after placing it. and they should usually quit before any instability or shift. You can day trade as a scalper before something comes to pass.
5. Arbitrage Strategy
Arbitrage is a strategy that a day trader can use. Such an approach implies getting currency in one market and trading it for a higher price from another. Anybody can establish a trading system.
Traders in the crypto market do have a profile on the marketplace in which they are trading. To start an opportunity for profit, register accounts on sites where you expect the same commodity will trade at significant price ranges.
5 Steps To Pick Crypto For Day Trading
The target of crypto day trading is to spot market opportunities that will allow you to make good cash. For day trading sounds to you, go get started with the following step-by-step guidelines about how to daily trade crypto:
Step-1: Pick coins with a higher value and liquidity.
As said before, the first most critical decision you must make is to pick currencies with extreme volatility and liquidity. Unless you’re not day trading Bitcoin. One of the most liquid coins on the marketplace. However, you should prefer altcoins, hunt for coins with high volatility and liquidity and volatility.
Here are well over 1600 currencies available on the market, with more on the way. You can limit down your choices by upholding the top coins. Day trading minor coins can be a very lucrative venture, but it brings a lot of risks. Please note that market rates can collapse just as suddenly as they can climb.
Going ahead, you’ll find how to win from crypto day trading.
Step-2: Just Use The Money Flow Index Indicator On The 5-Minute Chart
The Money Flow Index is the only graphical tool used in this day trading strategy. This indicator is being used to monitor the smart money’s behavior. Moreover, it determines whether institutions are planning to purchase cryptos. The MFI indicator’s recommended settings are 3 periods.
Step-3: Stay Updated On The Money Flow Index Till It Hits 100
The existence of the large sharks stepping into the markets is signaled by an MFI score of 100. Once it comes to shopping, smart money can’t keep its footprints. They always leave traces of their trading volumes in the trade, which we can detect using the MFI indicator. Even though chart patterns aren’t always reliable, they’ve included a few more criteria for day trading style.
Specifically, we should discard the very first two MFI scores of 100 today and try to concentrate on the crypto equity issues. During the first and second 100 MFI readings, the price must remain stable.
If the prices fall from the first two MFI 100 levels, we’re definitely in for a bad day. Let’s figure out where the best place to buy Bitcoin is, as well as what technical requirements must be met.
Step-4: Buy If The MFI Is Equal To 100 And The Next Candle Is Bullish
Now, all we have to do is sit tight for the third MFI score to rise over 100. It is not the 3rd MFI = 100 signal; any other MFI = 100 reading will qualify. If you will not have enough time to catch the third 100 reading on the MFI indicator, pick the next round as soon as all technical criteria are met.
Finally, we require the candlestick to be a bullish candle when we get the MFI = 100 value. The candle’s closure should be at the peak, giving in a candle with very small wicks. This leads us to the next major decision we must undertake whenever day trading cryptos: wherever to put our defensive stop loss or how to grab wins.
Step-5: Place Your Protective Stop Loss Well Below Day’s Lower
In the first 60 minutes once you open the trade, take profit. A most simple point to set your safe stop loss is below the day’s lowest. If it goes below it, it leads to a change in market attitude, and it’s advisable to quit the bet. This might simply be the onset of a reversing day.
When it comes to our exit plan, we’re more versatile. The only condition you must take is to take profits within the first hour after your trade has been completed. If you hold the transaction running for more than an hour, you’ll have a lower performance level. Certainly, that’s just what the data of our demo account indicated.
Frequently Asked Questions
Is it possible today to trade cryptos?
Day trading crypto commodities, for example, is not only practicable but also a good practice in some scenarios. Though day traders are most aggressive in markets such as commodities, currencies, and forex, the crypto market’s unique volatility is especially inspiring to those getting rich rapidly.
Is it necessary to have $25,000 today trade crypto?
Everyone who makes 4 or more day trades in 5 days must have a credit of at least $25,000 in their cash account. If they wouldn’t, they won’t be authorized to change any more highly leveraged day trades, until they do. One such rule should apply to accounts that are margined and where the trader takes margin.
The Final Thought
By following the day trading crypto guide, you should be able to purchase and sell Bitcoin and altcoins. This way you can make money daily and make some money. If you want to day trade cryptos, ensure you have all of the necessary knowledge before getting started.
Thus it can be a superb key to developing your crypto wallet. Due to the dramatic volatility of the cryptocurrency market, getting living day trading cryptocurrencies is often an easy way. High volatility is good for day trading, therefore you’re in the right place to win.