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Best 5 Strategies for Day Trading Crypto

The term "day trader" comes from the stock market, where trades usually only occur during regular business hours on the day of activity. One significant comparison when day trading cryptocurrencies is that the crypto market is always open 24 hours a day, 7 days a week.

For aspiring daily traders, it is a good idea to know the bottom half of each day's trades along with a few things to know before investing in crypto with this method.

5 Day Trading Crypto Strategy

Over the span of a multi-year period, simply holding bitcoin or some other cryptocurrency has become a profitable strategy. Profits have largely surpassed other legacy categories.

So when thinking about how to fund in Bitcoin, one strategy might be to just buy and hold. This can be especially true during a crypto bull market, when the expectations are short-lived. However, it is also important for investors to remember that Bitcoin and other cryptocurrencies are very hypothetical investments. Just because investment has increased in the past, that doesn't mean it will continue.

1. Technical Analysis

Technical analysis (TA) relates the use of mathematical markers and chart patterns to try and figure out which direction the price will go next. Some technical markers are only created with a PC program like TradingView (RSI, for example), while others must be identified by people by looking at the diagram (cup-and-handle patterns, for example).

2. Analysis of Information and Sentiment

Although less well-known among short-term trading people, viewing important information and market effects in a holistic way can also be used in Bitcoin daily trading. Often times, big pieces of information can move the crypto market with lightning.

For example, on the day this post was written in mid-April 2021, the Turkish state announced that it wanted to prevent Bitcoin and other cryptocurrencies as payment alternatives within its borders. This resulted in a general sell-off in the crypto market, with Bitcoin falling near 3.2% at first and more than 10% after that.

3. Reach Trading

Range trading takes into account that the price leads to move within a specific range. Using this strategy involves looking at candlestick charts and levels of support and resistance.

Traders may buy when the price reaches the support level and sell when the price reaches the resistance level. Or they may go short when the price reaches resistance and close short positions when the price drops to support.

4. Scalping

This strategy involves trying to profit from very small price movements over a short time span. Often this is a market inefficiency such as a gap in the bid-ask spread or a gap in liquidity.

Because they intend to profit from small price movements, “blantik” often do business using leverage such as limits or futures contracts to strengthen their profits. However, it also increases the ability to lose, so managing risk is very important with this strategy.

5. Bot Trading

Bot trading, or big wave trading (HFT), involves the use of algorithms and trading bots that can be programmed to execute most trades very quickly. Using this method requires insight into advanced trading strategies and programming.

While crypto trading bots do the trades themselves, big wave traders don't just lean back and let PC programs do the whole job. Trading bots involve creating specific strategies, developing appropriate programs to execute those strategies, and after that consistent control, backtesting, and updating of algorithms to track changes in market conditions.