Making an earning through crypto trading has now become much easier than it was ever. All could be done on your laptop, tablet, or even mobile phone.
You just need to have money to invest. Many people are just into crypto for fun, they just want to explore new opportunities of making a profit.
Like stock and commodity trading, crypto day trading is also a lucrative method of earning money in a short span of time.
The highly volatile aspect of the crypto market is something that makes it unique and attractive in the eyes of investors.
You can generate a modest profit on your trades if you are smart enough to understand the world of crypto day trading.
Mostly, beginners in crypto day trading learn from mistakes that make them lose their money. Smart people go through proper research and learn about the market before making a significant investment.
It is important to understand how crypto trading works, and what are options available to initiate trade?
There are several effective crypto day trading strategies that are essential for every trader to know before entering the crypto business. Go through the article to learn about some of the best crypto day trading strategies.
Range trading
In most cases, a cryptocurrency will trade for a long time inside a certain range. The interesting fact is that crypto market caps are small enough to be manipulated by even a single big mover.
Usually, big movers will systematically manipulate the price of a digital currency up and down in order to earn profit from a range. If you analyze these patterns, you can benefit from them as well.
If you are into range trading, it is important to focus on oversold and overbought zones. Overbought means buyers have finally saturated their needs and the stock will probably sell off and oversold means the opposite.
Chart indicators that are a part of a reputable stock chart program can help you find these zones. Common indicators used specifically for this purpose include relative strength index and stochastic Oscillator.
Scalping
Scalping is a quite common strategy among crypto traders, and many of the traditional traders are already well aware of this style of trading.
Scalpers are the ones who take advantage of increased trading volume to profit. There is no specific entry and exit trade time for scalpers, they may exit a trade seconds after entering.
Many traders use automated robots to increase the frequency of their trading cycles. Scalpers play short and safe, they exit a trade before any short-term fluctuation has a chance to change the market sentiments on a digital currency.
It would be best to have a large bankroll to take advantage of this short-term day trading crypto strategy.
Playing bitcoin volatility
The Chicago mercantile exchange (CME) facilitates users with bitcoin futures, opening up a wealth of volatile strategies for traders. Crypto has five times the volatility of traditional assets categories.
The fact is that volatility trades are ideally directionless which means that possibility of making money is there whether bitcoin goes up or down.
The long straddle is a directionless volatility strategy using bitcoin options. The first step starts when you are required to buy a call and put options at the same time for the same expiration date and strike price.
The Bitcoin straddle is most profitable when Bitcoin value falls or rises away from the strike price by more than the premium. When exiting the trade, you sell the call and put it at the same time.
Arbitrage
Arbitrage refers to buying cryptocurrency in one market and selling it in another market at a higher price. The difference recorded in the buy and sell price of a digital coin is known as the “spread”.
As crypto markets are unregulated, it allows anyone to create an exchange. This leads to major differences in the spread because of the difference in trading volume and asset liquidity.
Usually, in the crypto market, traders hold a portfolio on an exchange they are trading. In order to start an arbitrage opportunity, open accounts on exchanges you believe the most, you will see a significant change in prices for the same asset.
Conclusion
The Strategies mentioned above are recommended for those traders who are already in the crypto trading business for a long time. People who are new to the crypto trading world must visit https://bitiqapp.com/ to take a fresh start.
