Day trade bitcoin strategy
Day trading Bitcoin: Retest strategy We use the same situation as for strategy 1 since it offers the setup we are looking for. The bulls clear the first resistance level, move higher, get tired and rotate back lower to retest the previous resistance, which now acts as a support. The best Bitcoin day trading strategy is designed to help cryptocurrency day traders profit big from the volatile up and down moves that occur in Bitcoin on a daily basis. One of the main attractions of day trading Bitcoin (BTC) or any other liquid coin is the rapid fluctuation of prices. Apr 14, · The best Bitcoin trading strategy is an 85% price action strategy and a 15% cryptocurrency trading strategy that uses an indicator/5(48).
Day trade bitcoin strategyDay Trading Cryptocurrency – How To Make $/Day with Consistency | Trading Strategy Guides
Traders have to be quick on the draw, and they have to be vigilant, knowing when to enter and exit the market to maximize profits in a short space of time. It is also linked to trading psychology in order to lead with the head, over the heart. Using a Day Trading Setup means having an eye very closely glued to the Bitcoin chart to identify what is happening on the market in real time so that a trade can be made when the strategy suggests.
It means trying to identify different patterns on the charts that are showing what is about to happen so that the Day Trader can enter the market and take profit off the perceived next market movement. These same strategies can easily be transposed to the Bitcoin Market, and in fact can be better used because of the potentially higher volatility and bigger moves. A Day Trading Setup is not even that complicated as it is a pretty straight forward way of thinking that we use everyday anyway.
The same logic holds true for day trading. Below are five of the more popular Day Trading Setups that have been effective for traders for a long time, and across different markets.
One thing that is always notable, and one thing that causes excitement for traders is breakouts. In the Bitcoin space this is especially magnified with the level of volatility, and they play in well with the first Setup — Day Trading Breakout.
A breakout is defined when a stock gaps up or down on high volume first thing on the open. These types of moves are almost always related to a news event. Day traders move into the market once they see that the price breaks beyond flat range.
After this breakout, the trader closes the trade above resistance level. Once this is established traders can buy when the market breaks above a failed resistance level, and sell when the market breaks below a failed support level. This trading setup is looking to take advantage of a percentage of a market that is non-trending.
To get this setup right, a trader should confirm the price range by ensuring it is not breaking out of the resistance or dropping below the floor of the range set out on highs and lows.
This gives you a riding wave to follow once you are sure of the range and a few chances at entering and exiting with profit. The flag shape formation is a result of a stock that made a strong move upward, on high volume forming the pole shape , and then consolidating at the top of the pole, on lighter volume, where the flag is formed.
The secret in Trading the Flag is to identify a flag that has a pattern with less than a This is one of the best Day Trading Setup for new traders for a number of reasons. They are easy to understand, and it does not take long to identify them or to get good at noticing them, and they are generally small chart patterns, which means they tend to carry less risk than other day trading setups and can yield sometimes pretty good results.
This is a very profitable Day Trading Setup for the Bitcoin market as it is one that world well with the more volatile markets. This is a language I can talk — not how revolutionary blockchain is. It was Jesse Livermore who first observed different stocks and markets have different personalities. That was nearly a hundred years ago. The reason I love the crypto market so much is, short-term trading strategies that I typically use on a daily chart, work a charm intraday on Bitcoin and the others.
The only indicator I ever employ is a short-term simple moving average. Let's look at the simplest day trading strategy in the world. Anything lower than this IMO has far too much random noise. In trading, we always need to filter market noise from tradeable market edges. The hardest part of day trading is passing up lower probability set-ups and waiting for the higher probability ones. The setup has lost its effectiveness.
And we look for a new opportunity. If the order is triggered then we prepare to protect our trading position. This can mean either open profits or reducing the risk exposure. I have made a career out of this type of thing. Many traders choose to fill up their charts with all sorts of things. When you're day trading you need to be able to think quickly, and if you're processing too much data or metrics it is going to confuse.
Day trading is hard enough because you can spend long hours at the pc, waiting for a setup to come along. This can lead to lapses in concentration. Also, trading is the most emotional type of trading there is.
Money can be made, and lost in record time, which can lead to overconfidence or fear of the market. If you win money quickly, you can become greedy.
If you lose money too quickly it can start you on a path of revenge trading. Yep, day trading is hard — but is also why we are compensated so highly for it. Successful trading is a business, not a hobby. Like any business, you have profits and expenses.
How you manage them both determines how far you go. Have you ever known a business that required no customers, no selling, was location independent, no stock purchases and no marketing?
Have you ever known a business that was location independent and didn't require a special business premise? Or one where you could make up your work hours? Therefore, before trading bitcoin, you want to wait until there is a high reading of volatility to make correct entries. Not having enough liquidity could trigger a substantial slippage that could lead to even more significant losses. Bitcoin is a safe commitment for a new trader as it can be used as a long-term store of value.
It also comes with relatively fewer risks compared to altcoins. You only need to day trade bitcoin when all conditions align in your favor. Therefore, avoid trading on weekends and limit trading only to days with the highest volume. The safest altcoins to trade are those that are the top by market cap. These are the ones that are less volatile and are most likely to serve as long-term stores of value.
A great example is Ethereum, Ripple, Bitcoin Cash, among others. These coins are less apt to disappear. Smaller altcoins are profitable in the short-term, but the risks associated with them are much higher. Their prices can be artificially boosted through pump and dump. Therefore, the risk of your funds going up in smoke is much higher compared to bitcoin. A little dash of due diligence is needed in determining which altcoins to day trade.
Different countries hold different tax views concerning cryptocurrencies. Alternatively, you may want to utilize the services of an accountant to make your work easier. The following tax overview is U.
How much tax you pay is conditional to how long you have owned your digital assets. Tax for crypto held for less than a year is divided into three transaction types. If you purchase digital assets with fiat currency, you are not liable to pay any tax on that transaction. The taxable event comes in when you sell your digital assets for fiat currency. For instance, if you sell Bitcoin for U. The same applies to crypto to crypto sale.
All profit made from transactions will be taxed. Any crypto held for more than a year under U. Moreover, capital gains tax is much lower compared to income tax. Some of these risks include:. For some people, trading is like gambling. Just the mere thought of making thousands of dollars at the comfort of your house is thrilling. This addiction can be especially dangerous to your bank balance.
It can damage your life, put you in debt, and destroy relationships with family and friends. The cryptocurrency market is extremely speculative. Therefore, almost everyone in the market has an opinion of how the value or price of a digital asset will move.
All these conflicting information tends to saturate the market and mislead new traders into making trades based on false information. Almost all day, traders fail in their first year starting. Day trading is extremely challenging for novices as it requires a lot of knowledge, experience, and discipline- qualities that most beginners lack. Therefore, you are bound to make significant losses before you move on to make profits.
Day trading is a lucrative career. That means hours will be spent on the computer monitoring price movements and making adjustments whenever necessary. You are bound to make losses. Put theory into practice by signing up to a demo brokerage account and make trades in real time with fake cryptocurrency. Day trading is an acquired skill.
Therefore, you need to train and hone your trading skills through education and training. The cryptocurrency space is full of scams, pyramid schemes, and fake digital assets. The risk of losing money in a day is real.
Ensure that you diversify your investments and only use a section of it to day trade. This minimizes the risk of losing all your hard-earned cash. Below are some useful cryptocurrency tips that can help increase your profit margin and minimize losses. They include:. With day trading, you want to get in and out of a trade as quickly as possible.