Crypto day strategies have become quite prevalent in the last couple of years. If you use these strategies wisely and with careful consideration, you can make a lot of profits in the crypto market. So the important question here is which are the best crypto day trading tactics and how can you them as efficiently as possible. The following are the best crypto day trading tactics that most online traders around the world commonly use to inflate their profits while keeping the risks minimum. Be sure to understand all nuances of these strategies before you try them. Now read on to learn more.
Scalping happens to be a very popular crypto day trading strategy that works well in the short term.
Scalpers take leverage of inflated trading volume to make more profit. Scalpers might exit a certain crypto trade merely seconds post entering, and the majority of them make use of automated bots to boost their trading cycle frequency. Another advantage of using these bots is that they can save a lot of their time as the bot is doing all the trading.
In the ideal scenario, scalpers who want to exit a certain trade prior to any important news item or fluctuation (short term) have a strong chance to alter the trading market’s sentiment on a particular crypto coin. This is an important point to keep in mind if you want to engage in scalping as a day trading crypto strategy.
Most traders agree that it is best to have a big bankroll to take full benefit of this very short-term day trading strategy for cryptos. Though the Return Of Investment of every trade is quite small, when you stake a big amount, it means that the scalp will come back with a lot of money (to give you an example, 0.5 percent of 200,000 dollars is 100o dollars. This amount is comfortably enough for the payment of a luxury vehicle!). When you trade on a frequent basis — at times making 15 to 20 trades every minute or so- means that those little gains also add up which is more beneficial for you as a day trader.
In case you did not know already, in the majority of the cases, certain crypto will trade for a considerably long period of time inside a particular range. For example, Bitcoin, traded between 8,501 dollars and 10,220 dollars for a one-month time period. This difference in a range that is close to 9.5 percent seems quite volatile until you see that Bitcoin can experience a staggering 40 percent change (plus or minus) in one day.
Caps for crypto market are sufficiently small that you can manipulate them by one large mover. In a few of the cases, those large movers will manipulate the price of a crypto coin in a systematic manner down or up to make a profit from a range. If you are sharp and carefully observe these patterns, you can very well take full benefit of them.
Oversold and Over Bought Zones: What you should Know
If you are range trading while dealing with cryptos, it is in your best interests to pay particular attention to oversold and overbought zones. It is likely that you might not be familiar with these terms if you are new to crypto day trading. What overbought means is that that buyer has saturated their requirement, and the stock will sell off most probably. On the other hand, oversold means exactly the opposite to this. Chart indicators, part of any trustworthy stock charts program, can assist you in finding these zones. The most common indicators that are being used for this specific purpose include the relative strength index and Stochastic Oscillator.
To summarize, that you fully understand the working of both of these crypto day trading strategies before you try either one. This is very important because if you if make any hasty decision and adopt a strategy without doing your homework, it can have drastic consequences and you can end up losing your investment. In addition, to further minimize any risks, I will recommend that you sign up with a reliable crypto trading broker that is popular for supporting day trading strategies.