Crypto Daily Trading means buying and selling cryptocurrencies on the same day. The main goal of day trading is to earn quick profits. There is no overnight holding of the asset. It has a higher risk when compared to long-term investing. Moreover, it requires charts and quick decisions to generate more profit.

The market needs to be evaluated daily to gain a better understanding, and it is advisable to start with small amounts, especially for beginners, which helps reduce the chance of heavy losses.  This article covers various aspects, including the features that make cryptocurrency good for trading, the commonly used cryptocurrencies for day trading, whether crypto trading is profitable, and important tips to be taken care of while trading cryptocurrency. 

What Makes A Crypto Good for Daily Trading?

There are various factors that make a crypto good for daily trading. Firstly, cryptocurrencies with high liquidity ensure that there will be sufficient buyers and sellers in the market, which makes the trading process smooth. Secondly, cryptocurrency with high volatility enables the traders to enter and exit trades quickly, which allows them to generate profit in a short duration of time. High trading volume of the cryptocurrency shows strong market interest and also helps in the effective execution of trades.

Top Cryptos Commonly Used For Day Trading

• Bitcoin is the most widely traded crypto. It has high liquidity,  which means you can buy and sell it anytime without major price slippage. It is a safe option for day traders due to its steady price movements. 
• Ethereum consistently has strong daily trading volume. Its price changes in a predictable manner, giving traders good opportunities for quick entry and exit. 
• Solana’s high volatility makes it highly attractive for day traders who want quick profits, but it also has high risk. Solana is known for its fast and sharp price movements.
• Binance coin is a stable and trusted coin used frequently on the Binance exchange. It is generally a reliable option in day trading as it is easy to trade.
• High-risk altcoins can show high price jumps in minutes. They can offer higher profits, but the risk element is also huge. Therefore, they are more suitable for skilled traders who can make quick changes. 
• XRP is suitable for short-term trading strategies. It tends to react quickly to news and market updates. These quick jumps in price also attract traders who focus on short-term moves. 

How To Start Day Trading Crypto?

• Get a clear understanding of how cryptocurrencies work.
• Pick the coins that are most suitable for short-term trading. 
• Opt for a day trading strategy that fits your schedule
• Create an account on a reliable crypto exchange and ensure security
• Learn how to study price charts and market trends.
• Stay updated on the crypto market and practice risk management

Is Crypto Day Trading Worth It?

Day trading offers significant possibilities to earn profits, but it also comes with challenges. One major advantage is the potential for quick profits, as even the short-term strategies can generate quick returns. Flexibility is another key feature, as trading can be carried out from anywhere, regardless of time and place. On the other hand, day trading requires focus and time. Additionally, without discipline, even the profitable trades can quickly turn into losses.  

Important Tips For Safe Daily Trading

• Avoid overtrading as it can lead to losses due to trading fees, slippage, and market volatility.
•  Making decisions based on emotions can lead to irrational trading. 
• Having a clear plan and strategy is important for effective trading. 
• Fundamental analysis is as important as technical analysis, as it can add another layer of security and provide valuable insights into the long-term prospects of the crypto that is being traded. 
• Avoid chasing the trends, as it may lead to huge losses. 

Conclusion

Day trading can be profitable if a well-defined trading strategy is followed. It is crucial to be aware of common mistakes that can happen due to a lack of experience, which can result in increased risk. Adopting necessary trading strategies and adhering to the important tips to follow while trading helps in generating higher income and thereby increasing the chances of success in day trading crypto. 

FAQ

Yes, crypto day trading is generally legal in many places, like the US and India, but the profits made out of this are taxable. 

Bitcoin and Ethereum are the best cryptocurrencies for day trading as they have high trading volumes and sufficient volatility to generate short-term profits.

Reliable exchange, strong risk management, a trading plan, and capital you can afford to lose,  discipline, etc., are some of the necessary aspects required for trading crypto. 

Yes, it is possible to make money using crypto daily trading, but it involves high risk and high effort.

Cryptocurrencies are most commonly traded between 8 am to 4 pm in local time. These hours usually have the strongest market activity and better liquidity for trading.