Cryptocurrency Day Trading Strategies in 2020


Day trading cryptocurrencies has become the new buzzword among investors. Many traders have plunged into this new practice. Meanwhile, the concept is still quite recent. So, there is some confusion about cryptocurrency day trading strategies. Which strategy is right for beginners? And what about pro traders? Keep reading to find out all about it! 


Cryptocurrency Day Trading Strategies – the Basics 

Are you completely new to the topic of day trading? No worries, we got you covered! Let’s start from the definition. 

Trading means buying and selling assets with the aim of making a profit. Institutional trading focuses on stock, shares and currencies. Trading cryptocurrencies means buying and selling digital assets. So, when does trading become cryptocurrency day trading? The key factor is time. So, if an asset trades within one day, it qualifies as day trading. 

Are you looking for a more comprehensive introduction into day trading? Head over to our article on Day Trading Cryptocurrency. It covers everything you need to know about the topic.


Getting Started With Day Trading

Now that you understand trading, let’s get to work! Firstly, you need to pick the assets you are going to trade. For this, you need to understand volatility and liquidity. Let’s break this down. 


Volatility is a measure of the dispersion of returns for an asset. In most cases, higher volatility means a higher risk. So, lower volatility usually represents a less riskier asset. In traditional markets, the Volatility Index measures this. As of recent, a volatility index has also become available for Bitcoin. The Bitcoin Volatility Index tracks the volatility of BTC by market cap over time. 

Cryptocurrencies are famous for their volatility. BTC has experienced high volatility periods throughout its history. This results from many different factors. For instance, speculation, bad press, adoption rate, perceived value fluctuations and others. 


Liquidity is a measure of the ease at which an asset can be converted into cash. To clarify, it indicates how quickly an asset can be sold or bought in the market at a price that reflects its value. For example, cash is globally seen as the most liquid asset. You can convert cash into other assets quickly. In the crypto world, liquidity refers to the ease of converting a coin into cash or other assets.

How to Pick Crypto for Day Trading? 

The key concepts in picking trading pairs are liquidity and volatility. So, it’s time to apply the theory you just learned! 

In essence, there are over 3000 coins available. Therefore, a good starting point is the list of top crypto assets. You can narrow your search down by focusing on the top assets. We are talking about Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin and others. You can compare the volatility and liquidity of these assets. Depending on your risk appetite, this will help you find the right match. If you are looking for more riskier assets, look for higher volatility. On the other hand, lower volatility will lead you to less riskier assets. 

Furthermore, you should also consider market capitalization, trading volume and price. Take this as an opportunity to dive into the crypto world and do your research.

Cryptocurrency Day Trading Strategies - 3 methods

Cryptocurrency Day Trading Strategies – Speculation, Technical Analysis, Copy Trading

Now that you have your trading pairs in place, it’s time to trade! So, what are the cryptocurrency day trading rules? Let’s have a look at three common strategies.


First, let’s focus on speculation. This cryptocurrency day trading strategy is exactly what it sounds like. Speculators focus on outside market influences. They try to find correlations between market events and upcoming crypto price changes. In other words, speculators predict which asset will drop or gain value. Their guess is based on external events.

This method relies heavily on crypto market news. For example, economic developments, hacks and political statements are common triggers for speculators. Speculation requires less technical research than the alternatives. However, this method can sometimes yield unreliable results. This happens because speculation is closely linked to the external environment.

Technical Analysis

Let’s move on to more quantitative methods. Technical analysis focuses on internal market events. This method involves studying price charts. So, traders analyze the historic price movements of assets. In particular, they mark price upticks and decreases. Ultimately, they make trading decisions based on it.

There are various approaches to chart analysis. Each trader has an individual view. Yet, most of them overlap in predicting major price changes.

Are you wondering about the level of difficulty? Yes, technical analysis does include lots of data. It also demands involvement. Yet, it doesn’t have to be difficult. You can start off by identifying common patterns. Later on, you can move on to more advanced price detection. Remember – practice makes perfect!

Mirror Trading

Have you ever heard about copy trading? It is a method that lets beginners partner up with professional traders. Copy trading works with the help of a platform. First, seasoned traders list their strategies on the platform. Secondly, beginner traders choose which portfolio they wish to follow. After signing up to a portfolio, trades are automatically mirrored. In other words, newbie traders can copy the traders of professionals.

Mirror Trading is a great fit for investors with limited time resources. This method lets you skip out on individual research. Also, this method can be a good starting point for beginners. Since very limited knowledge is needed, anyone can start trading via this method. Wondering where to start out with copy trading? CoinMetro offers a copy trading platform with low fees.


We hope that you are now well informed about cryptocurrency day trading strategies! Head over to CoinMetro to test your skills in practice! In case you have any questions, our support team is here to help 24/7.

Big news! We’ve updated a guide for you: Read all about crypto day trading strategies in 2021!