Digital asset markets are relatively new so they tend to experience a lot of price volatility as the industry solidifies. But the volatility in assets like Bitcoin, Ethereum, and hundreds of other altcoins provides a dynamic environment for the day trader.
What is Day Trading?
- Day traders make frequent, intra-day trades in hopes of exploiting small price movements.
- Many strategies and automations have been developed to make daytrading more profitable.
- Choose a day trading strategy, consider risk management, and set it up with Quadency.
What is day trading exactly and how do you profit from it?
Day trading is a type of speculation that involves buying and selling stocks or digital assets within one-day timeframes. The goal of day trading is to earn tiny profits on each trade during the short term and hopefully the gains will compound over the long term.
Over time, day traders have developed many strategies to make their day trades more effective and profitable. Let’s cover some of the most popular strategies.
Day trading strategies
Scalping is when traders make small but frequent trades that last from only seconds to minutes. With repetitive short term trades, day traders may benefit from small price movements in the markets while leveraging both the top and bottom markets. With scalping, time is of the essence, meaning you must be able to react quickly and use a low latency platform with minimal transmission delays.
High Frequency Trading
High-Frequency Trading allows day traders to use algorithms and trading bots to execute frequent short-term trades. It’s like scalping, but infused with automations that make it possible to execute trades at higher speeds. High Frequency Trading allows traders to potentially capitalize on minute price movements as well as price differences between exchanges.
Discover Quadency’s Trading Bots for all your Day Trading Needs
Range trading involves setting up a range between an asset’s Support and Resistance levels. Traders use this strategy to mitigate their downside during sideways moving markets. The main point of the range strategy is to buy once the asset price reaches the support level, and sell when the price hits the resistance line.
Traders can easily set up a range trading strategy with Quadency’s Grid Trader, which enables you to place multiple buy and sell limit orders on grid lines positioned around the asset’s current price.
Technical Analysis (TA)
Technical Analysis is a system of using indicators and chart patterns to try and predict the future price movement of an asset. TA ranges from computerized momentum-tracking programs like Relative Strength Index (RSI), to manually reading charts to find patterns such as head and shoulders. Either way, day traders use TA to look for indicators that help them predict the market’s future behavior.
How to get started with day trading?
Before you begin with daytrading, be sure to utilize an all-in-one platform like Quadency that provides high speed trading capabilities across multiple exchanges. That way, you’ll enjoy the most competitive trading fees and access to a rich well of digital assets. Once you have a trading terminal account, move to the next steps:
- Choose the digital assets you want to trade. Day traders commonly look for those coins that have high liquidity and a lot of volatility so they can capitalize on the frequent price movements.
- Define a strategy and stick to it. There are multiple ways for day traders to potentially make gains via short-term market fluctuations. Review the strategies above, DYOR, and focus on one to start. Then, create a plan for when to enter and exit your positions.
- Determine your risk management strategy. Be proactive and set up ways to hedge your risks, such as diversifying your assets, using bot automations to trade emotions-free, and deciding how you will store your crypto assets.
- Set up your trading bots. A trading bot is an automated trading strategy in the form of software that day traders can use to execute their trades. Bot automations help to create a trading environment for maximizing profit and reducing losses.
- Specialized yet easy-to-use trading bots are now available to retail traders for free at Quadency.
- Day trading has long been popular in traditional markets. With newer crypto markets, day traders enjoy ample liquidity, plenty of volatility, hundreds of digital assets to trade, and easy bot automations to execute high speed trades.
- Set up your day trading strategy with Quadency's smart terminal.
- Looking to capitalize on volatility? There’s a bot for that.
- Discover QUAD tokens and start staking!
Quadency is a cryptocurrency portfolio management platform that aggregates digital asset exchanges into one easy-to-use interface for traders and investors of all skill levels. Users access simplified automated bot strategies and a 360 portfolio view with a free account.
Disclaimer: The content of this article is for general market education and commentary and is not intended to serve as financial, investment, or any other type of advice.