Can You Day Trade in Crypto? Pros and Cons

A temporary trading method centered on buying and selling cryptographic assets on the same day is known as "crypto day trading." The particular volatility and liquidity of the cryptocurrency markets enable the high-risk activity of day trading cryptocurrencies.

Can You Day Trade in Crypto? Pros and Cons

Yes, it is possible to become a successful day trader in cryptocurrencies. You will need the following to start day trading: an initial investment, a plan, perseverance, and discipline. All of them are covered in our crypto day trade article.

To succeed as a day trader, a trader must fully know the market, bitcoin, and any other cryptocurrency. Characteristically, the plan is to buy a cryptocurrency whose value is expected to increase over the coming hours and then sell it to make money. Although it could look simple to beginners, trading cryptocurrencies is tough and risky. A trader needs to have a lot of discipline, expertise, and reliable day trading tactics to succeed.

One of the most profitable and straightforward ways to profit from cryptocurrency is through crypto day trading. Today's traders are becoming more adept at entering and exiting the market quickly, and they have benefited greatly from coin prices' volatility.

Let's begin with some important data from the online educational site Tradeciety.

  1. In the first two years, 80% of all-day traders quit.
  2. Nearly 40% of day traders hold their places for a month or less.
  3. Only 13% of day traders stick with it after three years. Just 7% are still alive after five years.
  4. Individual investors disappoint market indices on average by 1.5% yearly.
  5. Active traders fail by 6.5% annually.
  6. Traders with a track record of losses for up to 10 years continue to trade.
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1. The Basics of Day Trading Crypto

A position in the market arrived and departed using the crypto day trading method on the same day. It is also known as "intraday trading," which refers to opening and closing trades within the same day.

Profiting from minute changes in the market is the single purpose of day trading cryptocurrency. Due to the instability of cryptocurrencies, day trading in the market can be highly profitable. A 10% increase in value within a single day is unusual for a representative stock or even a product. Hurdles like these are common in the cryptocurrency world.

Most day traders use technical analyses to progress the best trade ideas. They examine price programs, dimensions, chart outlines, and other cryptograms to find their savings entrance and exit points.

Additionally, they keep an eye out for essential news and other developer-related changes that can affect the pricing of digital assets, particularly shortly.

2. Why Day Trade Crypto?

Making money is the main inspiration for day-trading cryptocurrencies. Since cryptocurrency values are more unpredictable than any other advantage class, traders who are aware of the market can benefit from this.

The cryptocurrency market may be gainful for you if you can analyze patterns and have a complete day trading approach aimed at cryptocurrencies.

Because it provides predictions for the short term, day-trading cryptocurrency is also imaginary. You can day trade and make money from the market in such a short time as different from buying, fielding, or taking long assets.

3. Day Trading Strategies for Crypto

As mentioned earlier, the appropriate crypto day trade approach is important for achieving day trading numerical assets like Bitcoin. Three methods that you can use to progress your day trading incomes are described below:

  • Scalping
    Scalping is a day trading method for cryptocurrencies in which participants try to profit from rising trading activity. Within minutes of entering a transaction, they can close it out, taking modest profits. It is more suitable for some scalpers to utilize trading bots to systematize their interchange action.
    A scalper should aim to make modest earnings. They "scalp" the market looking for tiny openings. Because the benefits from this method are typically comparatively small, scalpers necessitate a huge amount of capital to attain returns.
  • Arbitrage
    One of the most widely used market tactics is arbitrage. It entails purchasing a coin on one platform, selling it on another, and profiting from the difference in price between the two.
    For instance, Bitcoin might trade for $45,000 on Binance while it costs $45,500 on Coinbase. You may earn $1,000 fewer fees if you buy 2 BTC on Binance and sell them on Coinbase in minutes.
    Arbitrage frequently results in uncertain profits, much like scalping. Therefore, you can style more currency if your order is greater.

4. Best Network for Day Trading Crypto

We suggest utilizing Etro if you seek the premium cryptocurrency conversation for crypto day trading.

This agent, manufactured in 2007, has gained approval for its adaptableness and suppleness. Additionally, it provides one of the top cryptocurrency apps obtainable. Additionally, eToro is fully governed by several significant fiscal institutions.

With a simple-to-use line and a $10 minimum balance obligation for most nations, eToro makes it simple for new traders to enter the market. The site is well-known for having a cheap 1% trading cost. This way, you may contact the cryptocurrency market reasonably and safely because eToro also gives you access to the top crypto folder.

The fact that eToro bids a Copy Trader purpose that allow newbies to profit with comfort further hardens its position as the top cryptocurrency exchange in the UK for day trading. With this feature, you may easily mimic the day trading plans of eToro's top traders. So, you benefit when they gain monetary achievement.

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5. How to Start Day Trading Crypto?

After going through the particulars of cryptocurrency day trading, we can now establish how to open your first trade.

We'll walk you through each step of how to trade cryptocurrency with the honest stage, Bitstamp, for as little as 0.5% per deal in only a few proceedings.

  • Create a Bitstamp account
    Click "Get Started" on the Bitstamp homepage to become money-making. Your full name, birth date, and email address will be required to establish your account.
  • Verify your identity
    Before fully using their accounts, new users must authenticate their identity. Complete Bitstamp's KYC payments by clicking "Personal account verification" on your exchange board. After that, upload documentation or another form of identification and proof of address (e.g., utility bill).
  • Put Money Down
    Once your account has been validated, Bitstamp will email you and let you make a deposit. If you are a US-based dealer, click "Deposit" on your console and select ACH.
    Following that, Bitstamp will give you some bank data so you can manually transfer money from your bank. After the transfer, it may take 1-2 business days for the money to appear in your trading balance.
  • Pick a cryptocurrency to trade
    Now that Bitstamp's web-based trading platforms (or mobile apps) are available, you can use the investigation box to determine the currency you want to trade. Once it does, select "Buy."
  • Start day trading
    You can input your desired position size, select the order type you want to use, and, if you'd like, select a stop-loss/take-profit level in the order box that will show on your screen. Click "Buy" once more to appearance the contract appear if you are satisfied with everything.

6. What is the Best Crypto for Day Trading?

In the present day, that we know what to look for in a good day trading crypto, let's take a look at some of the best choices out there.

  • Fantom (FTM)
    Even though fantom is arguably the least popular cryptocurrency on this list, day traders can still profit from it. It contains all the characteristics one could want in a numerical advantage suitable for day trading in cryptocurrencies, including cheap costs, quick transaction times, and large volume.
    It was among the top 70 cryptocurrencies on CMC during the writing period, which assurances at least a trifling level of fluidity. This important crypto asset is also more likely to be listed on numerous crypto day trading platforms, enabling users to engage in sophisticated trading techniques like arbitrage.
  • Ripple (XRP)
    For several reasons, Ripple is a fanciful option for crypto day trading. First rotten, it has a very small transaction fee of just 0.000001 XRP, making it perfect for those who want to conduct numerous trades without worrying that high fees will reduce their profits. Second, it confirms transactions in only four seconds, thanks to Ripple's lightning-fast speed. Day traders that need to execute trades quickly and don't have time to wait around for lengthy block times will love this speed.
    Furthermore, Ripple's price variations might produce important profits if you know how to benefit from them. Additionally, because of its incredible popularity, individuals are always prepared to profit from its price fluctuations, making them even more extreme.
  • Solana (SOL)
    Solana is a fantastic choice if you're penetrating for a quick and walkable cryptocurrency for day trading. This coin can handle up to 50,000 transactions per second when associated with other blockchains. Additionally, you won't have to worry about losing money on fees because Solana's transaction fees are extremely minimal.
    Solana has the extra benefit of actuality being both well-liked and future-proof. While the latter is less significant for day traders, it promises that new (and frequently novice) traders are continually looking for this cryptocurrency on every crypto trading platform. This further increases its liquidity and profitability potential.
  • Bitcoin (BTC)
    The largest market cap in the space belongs to Bitcoin, the major and best-known cryptocurrency. Aside from this, it is the most liquid cryptocurrency, which means that purchasers and suppliers can always be found. Given its extreme trading volume and significant volatility, one can generally say that bitcoin is a good option for day trading.
  • Cosmos (ATOM)
    Cosmos is a wonderful choice if you're seeking a volatile cryptocurrency with the potential to generate significant gains. In the quick passé that this coin has been on the market, its price has varied histrionically, and it doesn't seem to be slowing down. The secret to crypto day trading in Cosmos is to keep a close eye on the market and seize every chance.
  • Ethereum (ETH)
    Due to Ethereum's tremendously wide price range, there will be many probabilities of obtaining low and selling high. Aside from that, Ethereum is one of the most broadly used cryptocurrencies. Therefore there will continuously be buyers and sellers.
    Ethereum's relative constancy is yet another noteworthy feature. Ethereum doesn't frequently undergo important price swipes as some other coins do. Although it seems inconsistent, it can also be helpful for day trading because it enables you to choose less risky techniques and leave the trading session with a more expected profit.
  • Cardano (ADA)
    Cardano is a delightful cryptocurrency for day trading since it has a lot of upside budding and is very unstable. Cardano is faster and more ascendable than ADA, often compared with Ethereum. The fact that Cardano has a healthy community trying to make changes also ensures that there will be interest in this cryptocurrency.
  • Polkadot (DOT)
    Everything a day trader would require is available at DOT, including strong liquidity, availability on a wide range of trading platforms, affordable fees, and more. This cryptocurrency has a dedicated community and, more outstandingly, robust and cutting-edge functionality that makes its price schedules interesting to watch.
    Overall, DOT is a solid pick for crypto day trading with more than sufficient profitable chances and dangers at bay.
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7. Pros and Cons of Day Trading Crypto

People concerned about the cryptocurrency market but don't want to deal with the problems of purchasing and selling cryptocurrencies sometimes turn to cryptocurrency day trading. This trading style makes gambles on brief price activities without owning any cryptocurrencies to produce rapid gains. It's critical to remember that day trading, like all other types of investing, has hazards.

Over the past year or two, crypto day traders have made huge profits, but many have also lost money because they didn't know what they were doing or had bad blessings with their trades.

a. Pros of Day Trading Crypto

  • The market is open continuously
    Since the market is open continuously, deals can be affected at any time. It is beneficial since you can contact markets anytime or at night, depending on your date zone. Moreover, since chances can feature at any time, you don't have to be concerned about losing out on them if they present themselves during certain work times.
  • Volatility Has Benefits for You
    Despite being a risky achievement, day trading cryptocurrencies has frequent advantages. One of the main advantages of day trading cryptocurrencies is the ability to profit from volatility. Since the market's price will unavoidably vary throughout the day, you can profit when prices are up and down.
    Taking modest places is the key to making this work for you since, if something goes wrong, your loss won't be as significant as it would be with a larger picket size. Another advantage of day trading cryptocurrency is that you have more control over your trades than you would if you were to make direct funds in a particular asset class, such as equities or bonds.
  • The Information is Open
    Cryptocurrency prices are willingly available for anyone who needs to buy or sell since they are presented on worldwide contacts. The current price somewhat tells you everything you need to know about whether or not you should buy it right now, so there's no need to worry about how much approximately it should cost.

b. Cons of Crypto Day Trading

  • Stress Levels Rising as a result of 24/7 Trading
    Investing in bitcoin futures agreements on various connections worldwide may not give you endless hours or breaks because there are no established hours for markets to trade, which is a disadvantage of cryptocurrency day trading. There would be more time between trades than if you were making conventional stock market investments if you could invest at 5 a.m. EST one morning and again at 3 p.m. EST the following afternoon. Having this inconsistency can make you feel tenser.
  • Renowned exchanges
    A lot of individuals have gotten into the cryptocurrency movement. Before you start working in the field of day trading, there are a few drawbacks you should be aware of that. Famous connections only allow the trading of small money, and entering and exiting positions can be challenging if they do not occur quickly enough. It indicates that practiced traders or those knowledgeable about the market should use it.
  • To sum up
    You should be able to decide whether or not day trading is right for you after reading this article. While it might not be the ideal fit for your present lifestyle and fiscal situation, if you're prepared to put in the essential time and effort, there's a strong opportunity that will yield large financial benefits.

8. Avoid These Mistakes When Day Trading

Although day trading is quite common among cryptocurrency traders, it is seen as risky due to the cryptocurrency market's volatility. Thus, traders frequently risk losing money. Here are several pitfalls you should steer clear of when day trading bitcoins.

  • Overtrading
  • Trading outside your risk tolerance
  • Forex FOMO (fear of missing out)
  • Avoiding independent research

Conclusion

Cryptocurrency day trading can result in remarkable gains, especially for short-term investors. You should have no questions as long as you have a good day trading plan for cryptocurrencies.

We advise BLOCK as the best cryptocurrency for day trading. Given that the asset's price is still relatively unpredictable, there is a huge possibility for gains. You can purchase BLOCK on Pancake Swap and track the price movement of the lottery token to look for daily trade chances.