Trading Cryptocurrencies has become a major trend nowadays. Day trading is one of the most effective strategies used to trade Cryptocurrencies. It is a structure and rule-based strategy where everyday trading shall not occur. Day trading Cryptocurrency strategy is used to protect balance since we know that Bitcoin is highly volatile.
Day trading is best for this environment. Due to Day trading, you shall have enough up and downswings for earning a consistent profit. To start Day Trading of Cryptocurrency, the initial step is to open an account in an automated trading platform. This article will thus talk about five effective ways to begin Day trading Crypto.
5 Ways To Begin Day Trading Crypto
- Picking Up Coins Which Are Highly Volatile And Liquid
A wise decision that any Crypto trader would make is to select highly volatile and liquid coins. In case an individual is absent from Day trading Bitcoin, the highest liquid coin available, they should end up selecting Altcoins that have good volatility and liquid rate. It is important to remember that the price of Cryptocurrencies have the potential to crash as soon as they heighten.
- Application Of Money Flow Index Indicators
One of the Day trading strategies uses the lucid technical indicator. This technical indicator is known as Money Flow Index. With the paramount assistance of the indicator, you have the ability to check the performance and the credibility of the money in question.
- Be Patient About The Money Flow Index To Reach 100
A Money Flow Index reading shows that massive sharks are finally putting their foot into the market. As such, anyone who is purchasing coins, via smart money is on the roll. The footsteps cannot be hidden. However, it is seen that the technical indicators are not always right. In the present scenario, the traders need to skip the first two Money Flow Index readings and focus on the study of Crypto price reaction.
- Buy If Money Flow Index = 100
The traders and waits see the third Money Flow Index until it reaches above 100. If there is a constraint in time, you can catch the Money Flow Index reading on the next one until the technical conditions are favourable.
- Highly Protective Stop Loss Below The Low
A trader shall hide their protective stop loss. This needs to be done specifically before the low of the day. That is why if the break is present below the signal, there are high chances for a shift in the market’s sentiments. That is the perfect moment to get out of the trade. The traders need to know that they should take the profit during the first 60 minutes during the opening of the trade.
The Bottom Line
The Crypto market has unique characteristics which are essential to be understood. To survive Day trading Crypto, the trader needs to have diversified knowledge and a firm understanding of the Cryptocurrency markets to deal with riskier assets like Bitcoin.