Wednesday, August 10, 2022

Does Day Trading Apply To Cryptocurrency

Forexcom Best Crypto Day Trading App

How to Trade Cryptocurrency As a COMPLETE Beginner Using ONE simple Indicator!

Although is best known for its currency trading department of more than 80+ pairs – this popular broker is also home to cryptocurrencies. As crypto markets at are traded as CFDs, you can go long or short and even apply leverage.

You can trade the likes of Bitcoin, Ethereum, LTC, and Bitcoin Cash against the US dollar. You can also trade Bitcoin against the euro, pound sterling, and Australian dollar. When it comes to fees at, this depends on your chosen account type.

There is a commission-free account with reasonable spreads – which is best for casual traders. If you’re a professional trader, then the STP Pro account will be more suitable. This allows you to trade with industry-leading spreads alongside a small commission. If funding your account with bank wire, there is no minimum deposit thresholds.


There is no guarantee you will make money with this provider.

Binance Best Cryptocurrency Day Trading Platform For Small

If there is a particular cryptocurrency that you have in mind – the chances are that you will find it at Binance. This hugely popular cryptocurrency exchange is home to billions of dollars worth of volume each and every day.

You’ll find hundreds of pairs on the platform – including plenty of small-cap coins. This includes a huge number of ERC-20 tokens. Depending on where you live, you might be able to deposit funds with your debit/credit card.

The fees are, however, costly at between 3-4%. Nevertheless, Binance is super cheap when it comes to trading fees. In fact, you will pay just 0.1% on the platform – and even less if you hold an allocation of Binance Coins . Binance is also a great option if you like to perform technical analysis – as you’ll find an abundance of advanced charting tools and order types.


Your money is at risk.

How To Day Trade Bitcoin

Bitcoin is more volatile than any other type of asset in the cryptocurrency market. Therefore, day trading bitcoin comes with a considerable amount of risk. Bitcoin prices are highly sensitive to public sentiments and regulatory changes. They fluctuate quickly depending on the types of news circulating in the industry, whether positive or negative. Therefore, before trading bitcoin, you want to wait until there is a high reading of volatility to make correct entries. Its also essential to check how liquid the crypto is by verifying the 24-hour volume of the crypto trade.

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. Furthermore, trading bitcoin doesnt need to occur every single day. 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.

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What Is Day Trading Crypto

Crypto day trading is a style of trading where the trader buys and sells throughout a single day. The aim of day trading crypto is to make regular profits throughout the trading day and not hold any positions overnight.

Day traders will often trade during the first hour of a market open and the last thirty minutes of a market session as this is where the most amount of volatility is. As you can trade cryptos 24/7, the market session times used are usually in line with when the European market opens and when the US market opens .

Crypto day traders will often use specialised crypto trading platforms from brokers like eToro as discussed in the previous section.

Fa Vs Ta Which Is Better


It entirely depends on the trader profile. Do you want to be the kind of trader that prefers to get in and out of trading positions multiple times a day ? Then crypto technical analysis will be your best friend. Instead, do you prefer to research and make informed bets every time ? Then a mix of both is the way to go.

As a trader, you cant have enough tools in your arsenal. Applying both FA and TA will give you the best chance of identifying the best trading and investing opportunities in the crypto market. This is because the two techniques complement each other in so many ways.

For instance, you may use FA to determine that an asset is worth investing in. What you may not uncover with FA, however, is the right time to invest. For this, you will have to rely on technical analysis. Conversely, if you are using TA to work out future price movements for a given asset, you can use FA to confirm whether or not the price trend you are witnessing is poised to continue.

Therefore, there are advantages to using either technique over the other at various moments in your research, but to have a more complete picture, use both.

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What Is Day Trading

The term “day trading” came to the cryptocurrency market from traditional financial markets. Day trading is speculative trading on the exchange in which a trader buys and sells an asset within the same trading day. In day trading, the duration of holding assets usually ranges from several minutes to several hours.

Initially, day trading was used exclusively by financial companies and professional speculators, carried out by employees of banks and investment firms. However, with the emergence of online trading, this type of activity is becoming more and more popular among retail traders.

Which Cryptocurrency Is Good For Day Trading

To get the best results at day trading it might be best to look at the coins with some degree of volatility.

Crypto market is usually characterized by high volatility, so even low-volatility coins can generate a moderate profit if you play your cards right.

Another characteristic to keep an eye on is liquidity. Coins with low liquidity may have unpredictable price oscillation or get stuck at a certain price level.

High volatility and liquid coins like bitcoin or ethereum would allow you to spot a more precise entry point and provide an opportunity to take your desired profit.

In short, dont forget to check the 24h volatility and trading volume and pick the ones with most reasonable characteristics.

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Swing Trading Isnt Equal To Day Trading

Swing trading is another approach popular within the groups of traders attempting to capture gains over a period of several days to a couple of weeks.

They enter and exit the market sporadically based on current opportunities. Since their positions are opened longer than those of day traders or scalpers, they often go with both fundamental and technical analysis.

This also explains why swing traders tend to wait longer for a trade to develop and tend to use risk instruments, such as stop-loss or take-profit orders. They have more time on their hands.

Compared to day traders who might want to spend more time in front of their screens over a period of one day, swing traders often stick to their trading plan to close their positions, in which case crypto bots sound like a useful solution.

Can You Short Crypto

Easy Cryptocurrency Day Trading Strategy Anyone Can Follow – Crypto Tutorial

Yes, you can short cryptocurrencies online. With that said, the easiest and most cost-effective way of doing this is to place a sell order at a crypto CFD site. Some of the best platforms supporting crypto CFDs include eToro, Libertex, and AvaTrade.

About Kane PepiAbout Kane Pepi

Kane Pepi is a British researcher and writer that specializes in finance, financial crime, and blockchain technology. Now based in Malta, Kane writes for a number of platforms in the online domain. In particular, Kane is skilled at explaining complex financial subjects in a user-friendly manner. Kane has also written for websites such as MoneyCheck, InsideBitcoins, Blockonomi, Learnbonds, Buysharesand the Malta Association of Compliance Officers.

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Differences Between The Stock Markets And Crypto Markets

  • Owing to its old age, the stock market is more stable and less volatile. The crypto market, on the other hand, is accustomed to wild price swings. It is pretty normal to see double-digit percentage swings in a matter of hours.
  • . Age is a significant factor in trading. The stock market has been around for a long time, while the crypto market is only about a decade old. This means that market value and trade volume in the former is much larger compared to the latter. The younger age also contributes to the wild volatility experienced in the crypto market.
  • . In the stock market, you invest in the publicly listed company shares by buying their stocks. In the crypto market, you invest in the idea, the technology, or the currency , but not the company behind the currency.
  • Regulations. Since the stock market has been around for ages, regulators have had enough time to develop and implement rules and regulations governing the markets conduct. This contributes to the minimal volatility we highlighted earlier. In the cryptocurrency market, this is not the case. The regulators are still grappling with understanding the emerging asset class, and this lack of regulations are part of the reason for the markets wild nature.

How Do Day Traders Make Money

Day traders make money by either buying or selling assets at highs and lows, hoping to extract a positive net gain from the differences, or by speculating over the future price of an asset using derivatives contracts. Each type of day trading option offers its own unique benefits, with spot trading carrying less risk overall, yet far less potential for profits.

Day traders often both hold spot assets they purchase from a cryptocurrency exchange, then rely on derivatives contracts to bolster holdings with condensed risk by using less capital for greater profits. Day traders often do this from the comfort of a home office, while traveling, or while juggling other jobs and income streams. Becoming successful at day trading, however, isnt always easy and takes time, effort, natural talent, training, and experience to get right.

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Mistake #: Entering A Position You Cant Exit

Sometimes, it can be easier to enter a position than it is to exit that position. Certain exchanges are fairly illiquid: they dont have enough buy orders to support easily selling off your cryptocurrency at a good price at any given moment. At other times, exchanges that usually have healthy liquidity might have really low trading volume for instance, if youre trading on a holiday or weekend.

If youre stuck in an illiquid position, you might end up missing a great opportunity for profit-taking, forcing you to stay in a position for longer than you want.

You could try this instead: You could try to avoid times where you know therell be relatively less liquidity in crypto like nights and weekends by closing out all of your positions every night and over the weekend. You might also consider maximizing the liquidity to which you have access by trading on a platform that allows you to access many different exchanges at once, rather than trading on only one or two specific exchanges.

The Risks Of Day Trading Crypto

A Step by Step Guide on How to Trade Cryptocurrency ...

Day trading, just like any other type of trading, is risky. But it is even more so in the context of the high-volatility crypto market.

When investing in cryptocurrencies you should remember that the risk of your exchange getting hacked is substantial. This is particularly bad news for day traders: with day trading, you are likely to keep your money on an exchange because its very inconvenient to transfer coins from a cold to hot storage several times within a short time period.

And of course, before investing in a coin you should try and research the project, because the levels of volatility in crypto markets mean that even projects with a weak business model can peak for a while and mislead you as a day trader.

Day trading in crypto is risky, Peter Kotov told TradeSanta, but he also added that there are certain economic indicators out there to help you with the process. Those indicators are just harder to spot, but you can consider a leading indicator, for instance, an inverted yield curve, as opposed to a lagging indicator like MACD.

A bit more complicated indicator might be sentiment analysis on social media, the expert added.

To put it all together, day trading in crypto is not much different from day trading in traditional markets except there are certain risks associated exclusively with trading cryptocurrency.

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Yes Day Trading Crypto Is Taxable

Thesimple answer to whether or not day trading crypto is taxable is, yes. The IRSviews cryptocurrency as property. As such, it is subject to the same tax rulesas any other capital gain loss.

Itsimportant to note that the IRS does not treat cryptocurrency as regularcurrency.

Becauseof how the IRS categorizes crypto you need to keep track of your moves as youtrade or use crypto. You will calculate your potential tax based on how youuse, buy, and sell your cryptocurrency.

Ifyou are regularly engaging in day trading crypto you need to pay closeattention to your gains and losses throughout the year. At tax time, thesetransactions can get complicated. Its worth looking at refund-maximizing crypto taxsoftware to help youaccurately asses your tax liability.

Day Trading Risks Management

Implementing proper risk management techniques can make the difference and turn your trading journey into a full-fledged career. There are many day trading rules related to risk management, but here are the basic ones:

  • One percent rule there is a popular one percent rule that says you should never risk more than 1% of your account on a single trade. This can help you protect your trading capital from significant losses.
  • Limit loss size using stop-losses will help you reduce potential losses. The stop-loss is one of the most critical risk management techniques, and day traders use it regularly.
  • Secure profits another stop order the take profit will help you secure a profitable trade by closing a position before a potential trend reversal.

Even if you have a good strategy, it doesnt mean it will always meet your expectations. Thus, it makes sense to be ready for the worse, even when you think your active positions are doing great.

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Can You Day Trade Crypto

Disclaimer: The following article is part of Cryptonews Deals Series and was written as a promotional article in collaboration with the sponsor of this offer. If your company has an exclusive promotion that you would like to share with our readers, we invite you to reach out to us. Lets build together.

Crypto might differ from traditional finance in many aspects, but when it comes to trading, the two are remarkably similar. For example, it is not only possible to day trade crypto assets, but even a good strategy in some cases. Although day traders are most active in markets like stocks, forex, and commodities, the inherent volatility of the crypto market is especially attractive to those looking to make a profit relatively quickly. In this article, well tell you all you need to know about how you can do this.

Reporting As Either Income Or Capital Gain

Easy Day Trading Strategy Anyone Can Learn | Cryptocurrency Tutorial

Generally, if disposing of cryptocurrency is part of a business, the profits you make on the disposition or sale are considered business income and not a capital gain. Buying a cryptocurrency with the intention of selling it for a profit may be treated as business income, even if its an isolated incident, because it could be considered an adventure or concern in the nature of trade.

If the sale of a cryptocurrency does not constitute carrying on a business, and the amount it sells for is more than the original purchase price or its adjusted cost base, then the taxpayer has realized a capital gain.

Capital gains from the sale of cryptocurrency are generally included in income for the year, but only half of the capital gain is subject to tax. This is called the taxable capital gain. Any capital losses resulting from the sale can only be offset against capital gains you cannot use them to reduce income from other sources, such as employment income. You can carry forward your capital losses if you do not have any capital gains against which to offset those losses for the year or any of the preceding three years.

For more information on capital gains, see Guide T4037, Capital Gains.

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The 7 Costliest Mistakes People Make When Day Trading Cryptocurrency

  • | June 29, 2018

Day trading cryptocurrencies may lead to outsized profits but, if you dont know what youre doing, it can lead to outsized losses instead.

On April 12th, 2018, Bitcoins price jumped over 10% in a single minute. If youd been properly positioned with a good strategy, you could have made a single trade and increased your positions value by 10% almost instantly. On the other hand, if you were shooting in the dark and didnt have a strategy, you could have taken a big hit in 60 seconds.

Weve rounded up the 7 costliest day trading mistakes to try to avoid. Steer clear of these, and you could be on your way to becoming a more responsible day traderand, if youre ready to try trading for yourself, to access the best price execution on all major crypto assets with our proprietary smart-routing order types.

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