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A Guide to Day Trading With Crypto

Posted by Thandiubani on Wed 05th Jun, 2024 -

Below, we give our guide on day trading with cryptocurrencies.

The volatility of cryptocurrency is both its weakness and its greatest strength. While fluctuations can make it impossible to predict in the long term, those who are short-term traders can make huge gains if they are willing to take the risks. Below, we give our guide on day trading with cryptocurrencies.  

What is Day Trading? 

Day trading is a rapid form of investment, where stocks and shares are bought and sold in a day, as the market changes in real time. Once, this form of investing was only open to those who worked in the stock market or financial institutions. Now, due to internet connectivity and high-speed communications, anyone can be a day trader if they have the right knowledge and skills.  
The idea is to benefit and make a profit from short-term changes in stocks and assets. Most traders do this using one of two strategies. The first is to look at past trading patterns and prices, to forecast trends. The second is looking at reversals and short-term trends. This allows them to buy and sell at the right time in a short period.  

Getting Started With Crypto Day Trading 

Crypto-day trading follows more or less the same principles. The only difference is you are working in the even more volatile world of cryptocurrency. It won't be easy and it is estimated that around 95% of people who set out as day traders fail. Therefore, you need to know everything about the business as well as you can. You may find this page to help you get started.
Essentially, you need knowledge of two main areas: Day trading and cryptocurrencies. However, if that does not put you off, the tips below may help. 

Clear All Emotion From Your Mindset 

Emotion will lead to failure. When investing, you need to be extremely methodical, setting rules and boundaries. Don't let greed or desire play a part in making trades, and don't be fearful of losses. You need to cash out when you lose a little and be willing to do so when you make a profit without chasing bigger gains. 

Use Stop Loss Orders

A stop loss is a way to prevent losing more money than you can afford. You set the stop loss when you open a trade. When the crypto drops below a certain value, the asset is automatically sold. This prevents you from holding onto something that will lose more value, as you wait for it to turn around.

Limit Orders/Take Profit

The opposite of a stop loss is limiting orders or taking profit limits. These will automatically sell a cryptocurrency or asset when it rises in value to a certain level. This means you won't hold onto something hoping for bigger gains, only to see it swing back into a loss. 

Advantages and Disadvantages of Day Trading Crypto

Cryptocurrency trading has several advantages. The first is that it can be traded 24 hours a day. Unlike other markets which open and close, crypto markets do not sleep. As a result, you do need to set yourself strict boundaries about when you work, giving yourself designated timeframes and set hours. 
One of the main disadvantages is the volatility involved in trading crypto. Day trading is a risky business anyway, but when you add crypto into the mix it becomes more so. Of course, this also means the rewards can be greater. But it is up to you if you want to take them. 

Basic Strategies

There are plenty of strategies used in day trading. Below are a few you may wish to try out. It is a good idea to do this using a demo account, so you don't lose any money when experimenting with a day trading strategy. You can then move on to trading with real currency once you have a tactic you enjoy. 


Scalping is a tactic in which traders capitalise on small movements in price. This is done over very short time frames and looks for market inefficiencies, such as during the bid-ask spread.

Swing Trading

Swing trading involves holding crypto for longer than a day, usually between three days and three weeks. This happens during periods of volatility, making it a blend between day and position trading. It is named as traders look for trends that are just about to swing, either high prices about to fall so they can sell or lower ones that are going to pick up. They then make their profit as the swing occurs. 

Daily Range

The daily range involves predicting where a specific cryptocurrency will go. The trick lies in looking for oversold currency and buying it during periods of uncertainty. To be truly effective, you need to be able to identify range trading indicators. This is also one that requires specific, accurate knowledge of the crypto market. 
Like any investment, day trading with crypto involves a high degree of risk. Only invest what you can afford to lose, do your research and settle in for the ride. It's volatile and stomach-churning at times, but can be rewarding.  


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