Day Trading Cryptocurrency – Everything You Need To Know 


Day trading cryptocurrency has reached the news! The current crisis has sparked an interest towards alternative investments. With all this information coming your way, it’s easy to get lost. You might be thinking – where to start? Which mistakes to avoid? How to stay safe while trading? 

Don’t worry, we are here to help! Keep reading to find out how to start day trading cryptocurrency!


History of Day Trading

Trading used to be an exclusive practice. It was only available for people working in financial institutions or trading houses. Luckily, times have changed! The development of technology has made trading accessible to almost everyone. Yet, the history of trading goes back to pre-Internet times. 

First hints of trading appear in 1867. Mainly because this marks the year the telegraph emerged into the trading world. Stock markets started using the telegraph’s communication technology for sharing information. The key feature in this was ticker tape. Today, we know it as a stream of electronic information streaming across a banner. Back in 1867, it was a physical sheet of paper. Exchanges started using ticker tape to communicate transaction data to brokers. 

Unlike the current situation, all trades had to go through brokers. The barriers of entry were high for individuals, but ticker tape started to ease the access. Ticker tape helped brokers be up to date with the latest stock market movements. The information enabled them to make quick and informed decisions. Hence, day trading was born.


Day Trading Cryptocurrency – What Does It Mean?

Let’s start from the ABC. Trading means buying and selling assets with the aim of making a profit. Institutional trading looks at buying and selling stock, shares and currencies. Trading cryptocurrencies means buying and selling digital assets. Although the tradable assets differ, the purpose remains the same in both worlds. In conclusion, trading aims at returning a profit. 

Trading can have many different strategies. The strategies are usually linked to the trader’s expectations. But when does trading become day trading? This is usually determined by the time that a trader holds an asset. Day trading means buying and selling assets within a very short timeframe. This could be anything from a few seconds to a few hours. It qualifies as long as the asset is traded within the same day. Hence, having the name day trading cryptocurrency.

Day Trading Cryptocurrency - different strategies

Day Trading vs HODLing

Day trading traditionally brings small and quick profits. It requires being up to date with current price movements and speculations. For instance, a trader is keeping an eye on price charts and notices an uptick. He then buys an asset and holds it until the perceptive end of the price climb. After that, the trader sells the asset within the same day. This brings a small profit at a reasonable time commitment. Trading triggers can come from a variety of sources. For example, crypto market news, economic events, financial movements and more.

As mentioned before, there are plenty of different trading strategies. Day trading is just one of them. Another widely spread practice is long term trading. Unlike day trading, this means holding a cryptocurrency asset for a long time. Day trading connects to expectations of a steady price increase. Long term trading usually does not bring quick returns. Yet, the gains are higher than with day trading.

Have you ever heard of the term HODL? This is often mentioned when discussing long term trading. It refers to holding a digital asset for a long time with an expectation for long term profit. So, why is it called HODLing? Well, we all know how much the crypto community loves eccentric humor. The word “hold” was once misspelled on the Bitcoin Forum stuck around ever since. It is also sometimes explained with the acronym “hold on for dear life”. This characterizes the essence of long term trading quite well.


Day Trading Crypto Strategies

We would be happy to share a one-size-fits-all formula for successful day trading. However, trading success depends on a myriad of factors. There is no definite answer for profiting on trades. Yet, there are methods that will help you in your day trading quest.

Some of the most popular strategies for trading are chart analysis and speculation. Let’s first dive into the world of chart analysis.

Chart Analysis

Chart analysis is based on getting real time cryptocurrency price data. Traders study the movements of a selected cryptocurrency. They focus on historical data, decreases and upticks and predict the next move. Chart analysis means trying to guess the future of a currency by analyzing the past. Price charts offer a variety of options to cater to your needs. You can have a look at price movements by the second, hour or day. This is a useful method when looking for quick returns.


If charts are not your thing, you can try out speculation. As the name suggests, this method means trading assets based on current events. Crypto markets are often affected by global and economic trends. Movements in this ecosystem also affect the price of certain assets. Let’s take Bitcoin (BTC) as an example. The crypto saw an impressive price increase when China’s president Xi urged to seize the Blockchain opportunity. On the flipside, the leading crypto asset experienced a 20% decrease in a single hour in March. This was simultaneous  to stock market panic, outbreak of COVID-19 and economic security.

Traditional markets can also have conflicting consequences on crypto. For example, the first week of January 2020 brought turmoil in the investing scene. The Iranian Missile Attack stirred economic uncertainty. Traders then started pulling capital away from riskier assets. Lots of assets were reallocated to oil, gold – and cryptocurrencies. Bitcoin saw a growth spurt in the first week of January 2020. 

Market News Watch

Speculation demands keeping a close eye on crypto news. You can do this in many ways. The quickest and easiest way is crypto publications. There are lots of insightful sources available – have a look at some of our recommendations. If you are an auditory learner, check out our podcast listing. For those looking for an expert’s opinion, CoinMetro CEO’s weekly broadcast is waiting for you.


How to Start Day Trading Cryptocurrency?

Now that you know the basics of buying and selling crypto assets, let’s dive deeper.

Which Exchange Should I Use?

Can you guess the first thing you need for trading? Yes – an exchange! Although this step is sometimes overlooked, it is very important. Day trading is based on quick and slight profits. If the fees are high, the thin profits will easily decrease. Exchanges have different fee structures and can influence your gains significantly. You should look for an exchange with transparent and competitive fees. CoinMetro is an option for day trading cryptocurrency at transparent fees.   

Exchanges also have different coin pairings. You should keep this in mind when choosing the right platform. Make sure that your exchange of choice lists the assets you wish to trade. 

How To Pick the Right Crypto?

You have surely heard us mention this before – trading depends on many factors. The same applies for picking trading pairs. There is no ultimate formula for the right cryptocurrency. Neither can we tell which asset will bring the most gains. Yet, price and trading volume are a solid starting point in choosing pairs.

You can revert back to the price charts we mentioned above. These indicators help you in making an initial filtering decision. You can also revert to the list of most popular cryptos. These include Bitcoin, Ethereum, Ripple, Bitcoin Cash, Bitcoin SV and others. 

How to Stay Safe While Trading?

Trading crypto assets is a form of investing. It is a financial decision and it’s thus essential to do it securely. Although buying and selling crypto can mean great success, you also have to plan for failure.

Crypto assets are famous for being volatile. Volatility represents the change in value. It can increase or decrease quickly. This can be seen both as an opportunity and a threat. Crypto assets can rise or fall by a marginal degree within a short period of time. Although day trading usually requires small investments, it still carries risk. Trading success depends on many factors and not all trades will be successful. Have a look at our 5 tips for trading to get recommendations on secure trading.


Hopefully you are now well informed about day trading cryptocurrency! Head over to CoinMetro for some practical tips on trading! In case you have any questions, our support team is here to help 24/7.

Click here to see our latest guide about day trading strategies in 2021!