Cryptocurrencies are innovations to the modern financial market where investors think that the only way to sustain them here is by HODLing. However, crypto trading would be an excellent intraday trading system because the profit comes from a systematic approach.
There is no place of trust and hope. You cannot rely on how you or Elon Musk think about a crypto coin. Instead, you should know clearly about the project you are observing and the price you are monitoring.
If you are interested in making your trading journey effective, the following section is for you. Let’s see the core knowledge of intraday trading, including exact trading methods.
What is day trading?
It is painful to see trading software with floating profits. On the other hand, intraday traders close all activities within a day, whether profit or loss. Sometimes, they cut their daily trades with more significant losses and recover them on the next day.
Day trading means opening and closing trades within the trading day to avoid keeping positions overnight. It is widespread in the traditional financial market, but many people wonder how day trading works in the crypto context.
The good news is that what we see in the trading charts is similar to FX and stock markets. Therefore, if you find a sell entry from resistance, it will work in the crypto market. However, you need to know technical analysis to operate your trading activity intraday.
How to identify the day trading method?
There are thousands of crypto trading systems where day trading methods are just a part of it. Moreover, you cannot test every trading system to find the best one for you. Instead, a suitable trading method with higher profitability is better to use.
First, find your trading expectation. If you want a stable income with a lower risk, you need to find a trading system that can contain a strong risk management system. On the other hand, if crypto day trading is your primary source of income, you should follow a sophisticated system with close attention to the price. Remember that any trading system with a higher reward is riskier than traditional financial systems.
Based on our research, we will represent a profitable trading system for crypto day trading applicable to any well-known coins in bullish and bearish markets.
A short-term strategy
It is perfect for the top cryptocurrencies in the world. As it is a short-term trading system, we will see the price discrepancy in different platforms. This process is known as arbitrage. It is an old system and was available in other financial markets. In this process, traders buy a crypto coin at a lower price and sell it at a higher price on another platform.
Bullish trade setup
It is a very quick method that needs technological tools that can track real-time prices from different platforms. You have to open trading accounts on different platforms and monitor prices to find the lowest price.
For example, if BTC is trading at the lowest of 30,000 levels on a South African platform, you should buy it immediately and look for bearish trade setups.
Bearish trade setup
While you have bought the BTC with a $30,000 value, you need to see which platform offers a higher rate. For example, if you found a Japanese broker to sell BTC at $30100 level, you sell it here.
As a result, you have made a $100 profit from buying from a broker and selling at another platform.
A long-term strategy
This method is applicable on the spot market only. You can use the TradingView chart to determine the price or any interactive charts provided by the broker.
It is a simple range trading method where we will draw near-term levels and identify the market trend. In this method, you should know how to find the trend using several indicators like moving average, MACD, RSI, and others.
Bullish trade setup
Before opening a buy trade, you should ensure the following confirmations:
- The market context is bullish.
- The price ranges from where at least two touches in resistance and support happened.
- Price reached the support level and formed a bullish reversal candle.
- Meanwhile, RSI is moving up from 30 levels.
- Stop loss is below the candlestick, and take profit is the near-term resistance level.
Bearish trade setup
Before opening a bearish trade, you should ensure the following confirmations:
- The market context is bearish.
- The price ranges from where at least two touches in resistance and support happened.
- Price reached the resistance level and formed a bearish reversal candle.
- Meanwhile, RSI is moving down from 70 levels.
- Stop loss is above the candlestick and take profit is the near-term support level.
Pros & cons
Let’s see the pros and cons of the crypto intraday trading method.
| Pros | Cons |
| All trading activities are done within a trading day, and there is no overnight position. | The crypto market is very volatile, and that often makes trend finding hard. |
| The solid method does not need deep knowledge about cryptocurrencies and blockchains. | A strong risk management system needs to avoid market volatility. |
| This method is applicable in any trading instrument. | Some risks are unavoidable if you do not diversify the portfolio. |
Final thoughts
Day trading is profitable in crypto, where traders need to understand the fundamental difference between the crypto and traditional financial world. The crypto market is volatile where investors need additional attention to management. A simple mistake might cost you a lot. Therefore, make sure to use an appropriate risk management tool in every trade.
