April 30, 2024

Day Trading Crypto – Ultimate Guide for Beginners

Day trading refers to a group of fast-paced investment schemes that involve executing multiple traders within a relatively short period. This trading method usually relies on one or more technical analysis indicators to decide when market conditions are optimal for entering and exiting positions.

Unlike long-term investment schemes, day trading strategies place less emphasis on the fundamentals behind a currency. Instead, they mainly focus on immediate price action to determine the prospect of a potential trade. 

By focusing on short-dated trades with conservative take-profit and stop-loss targets, traders can capitalize on small price fluctuations while eliminating some of the risks associated with holding on to an asset for the long term.

Day trading is a high-frequency method that requires discipline, precision, and fast execution. While this kind of trading was traditionally done manually, in 2024, it’s safe to assume that most day traders use automatic trading tools as part of their trading scheme.

Due to its straightforward and minimalistic approach, day trading has experienced a massive surge from retail traders. While this is true for all markets, almost without exception, there is no place in which this trend is more apparent than the world of cryptocurrencies.

So, in this blog post, we’ll dive deep into the waters of crypto day trading.

We’ll start by answering why crypto day trading is gaining so much traction lately and whether this hype is justified. Later, we’ll discuss some of the most popular strategies, tools, and practices that successful traders use to take full advantage of everything day trading cryptos has to offer.

Whether you’ve been new to the subject or have been day-trading cryptos for years, this blog post has something for everyone. Without further ado, let’s begin! 

Advantages of Crypto Day Trading

While day trading is very popular worldwide, there are many reasons why traders choose to day trade cryptocurrencies specifically.

First and foremost, the main factor that makes cryptocurrencies the perfect assets for day trading is their inherent volatility. The crypto markets are known for their rapid and significant price swings that can erupt 24/7, delivering traders unparalleled opportunities to capitalize on short-term price fluctuations with relative ease.

The supporting arguments for day-trading cryptos don’t end there. Trading hours are also essential when deciding where and what to trade.

Limited trading hours, like those in most traditional markets, means daily traders are faced with a challenge towards the end of each trading session as the market is about to close – whether to leave their position open, thus taking the risk of a price gap when price changes significantly outside of regular trading hours), to close their positions before they achieved their goals, or even worse than that, losing, just to avoid that risk.

The crypto markets’ 24/7 operation eliminates this major issue by staying open constantly. By doing so, day traders are assured they will never have to adjust their position in a less-than-ideal way because of after-market price gaps. In other words, same-day trading strategies face fewer limitations in the crypto exchanges than in the traditional markets, which should deliver better results.

Liquidity is also essential since it’s heavily linked with trading costs. While low transaction fees are always nice, they are crucial in day trading, which usually relies on high trading volumes of minor price differences.

High liquidity means traders have smaller spreads, lower transaction fees than traditional exchanges, and cheaper access to leverage. These reduced trading costs, which can significantly impact the bottom line, contribute to the attractiveness of day-trading cryptos.

For all the reasons mentioned above, it’s safe to assume that the potential of day trading can be remarkably high when implemented correctly. What does it mean? Stay tuned and find out.

Popular Strategies for Day Trading Cryptos

As we’ve already discussed, day trading has the potential to be very lucrative for crypto traders. However, this doesn’t mean all day trading schemes will be profitable once deployed into the crypto markets.

The world of cryptocurrencies is like no other, with its own unique features and characteristics. To trade successfully today, crypto traders must have defined strategies tailor-made for trading cryptos specifically, ideally with a proven track record of success.

As we delve deeper into the exciting world of crypto day trading, let’s review a few of the most popular trading strategies currently available.

DCA Trading 

The dollar-cost-averaging strategy is very popular among bullish crypto traders. It requires two things for success: volatility and uptrends, which the crypto world is not shy of.

While crypto trading bots may offer different implementations of this strategy, advanced DCA bots, like the one we provided, are designed to exploit short-term price fluctuations that occasionally occur when volatile assets are bullish. In simple terms, the DCA bot enters a trade as the price goes down, exits the trade as the price comes back up, and automatically opens a new trade to repeat the process.

Grid Trading

The grid trading method is another widely used strategy in the crypto world. It is mainly suited when the markets are trading without a clear direction in anticipation of the next big move.

Sideways trends are recognizable by distinct support and resistance lines and lower trading volumes. These market conditions and sufficient volatility allow traders to exploit these price fluctuations by setting up a grid of potential trades designed to be triggered only once compatible market conditions are met. Similar to DCA, traders using this strategy often choose to execute it through a trading bot, or more specifically, a grid bot, to ensure a more accurate and profitable execution of this strategy. 

Swing Trading

Swing trading is yet another very popular strategy in the world of cryptos. Unlike the other trading methods we’ve discussed, this strategy’s primary focus is not to capitalize on volatility but rather on market momentum.

Due to its nature, swing trading heavily depends on technical indicators with a history of accurately predicting changing market conditions and price reversals. A partial list of popular indicators includes chart patterns like head and shoulders or multiple bottoms, candlestick formats like Engulfing patterns and Harami crosses, and price momentum indicators like SMA intersection and RSIs.

Arbitrage Trading

This trading method is also very popular among crypto traders due to its simplicity and relatively low risk. Instead of volatility or changing market momentum, this strategy exploits market inefficiencies to create profits.

Simply put, arbitrage traders buy a currency on one exchange and sell it on another exchange for a higher price. By focusing on price discrepancies between exchanges, traders can be less occupied with the rigorous task of analyzing current and future market trends, which, in turn, leaves them more than enough time to choose the most suited currencies to trade this way successfully. 

Choosing the Right Bot

There isn’t any single strategy that rules them all. Different strategies work better under certain market conditions and are more compatible with certain assets than others.

When picking the right automated trading solution to maximize the potential of your day trading strategies, experienced crypto traders would probably advise you to start the process by eliminating options that don’t deliver a sufficient solution to these three parameters: diversification, risk allocation, and execution.

Diversification means traders are recommended to opt for suppliers with more than one bot under their sleeve. This will allow traders to simultaneously deploy a few strategies in the market, thus preparing them for different scenarios. It will also enable traders to gain exposure to more than just one asset, eliminating the risk of putting all your eggs in one basket.

With trading bots, risk allocation refers to advanced features that enable traders to customize their trading strategies to match their specific trading goals and the risk levels they are willing to take. Day trading is a lot about managing emotions. With strategies that are tailor-made to your preferences, traders are more likely to be able to fall asleep at night with peace of mind.

Last but not least, we consider execution. As day trading mainly focuses on relatively small margins and short-term transactions, its dependency on fast and accurate execution is much greater than in any other form of trading. That is why when choosing a crypto bot, traders are urged to choose only reputable and reliable suppliers. Nothing is more frustrating in day trading than a winning trade turning to a loss because of lousy execution. This could easily be avoided with the right trading bot on your side. 

Cornix’s Value Proposition

In the world of cryptos, Cornix is considered by many to be a trusted partner for day traders. As one of the leading suppliers of automated tools for crypto trading, we offer traders a complete package of everything they need to take their day trading skills to the next level.

Our comprehensive offer for day traders consists of various crypto trading bots and other automated tools that can support all the trading strategies we’ve previously discussed (and more). 

As part of our mission to make automated trading more accessible to retailers, we offer flexible pricing with three plans to choose from. 

Monthly subscription fees start at $24.99 for the Starter Plan, $44.99 for the Advanced Plan, and $89.99 for the Premium Plan. When paid annually, prices drop to $16.66, $29.99, and $59.99, respectively, representing a 33% discount or four months of free trading. 

All the plans grant traders full access to the Cornix platform and offer the same features and user experience. The only difference between the pricing plans is the number of bots and the trading volumes they support.

All bots are easily managed through the platform, one of the most easy-to-use trading apps in the crypto business. This intuitive interface, accessible from mobile and PC, makes managing portfolios, monitoring trades, and changing preferences a simple process that anyone can do.

With Cornix, traders also gain access to a wide range of step-by-step video tutorials, accompanied by other useful educational resources and 24/7 customer support. This ensures traders get all the support they need to implement day trading schemes effectively. 

Final Thoughts

Day trading, especially in cryptocurrencies, allows traders to boost their bottom lines by capitalizing on market opportunities around the clock, executing trades accurately and efficiently, and managing risk effectively.

Our trading bots and platform, with their user-friendly interface and advanced features, step-by-step guides, educational resources, and 24/7 customer support, provide the ideal all-in-one solution for crypto traders. With flexible and affordable pricing, we are trying to ensure that our trading solutions are available for all, regardless of their trading level and portfolio size.

You are invited to take advantage of our free trial period to experience the full benefits of our value proposition firsthand. There is no better time than now to start unraveling the exciting potential of crypto day trading.