Do you want to learn intraday crypto trading and earn $500 per day? We often hear about all the money you can make by trading stocks of the day . But what about day crypto trading ? In today’s lesson, you’ll learn how to trade cryptocurrencies using our favorite crypto analysis tools .

 

 

Our team at Lucky Trading Strategy Guide has over 50 years of combined day trading experience. We will share with you what it takes to trade for a living and hopefully, by the end of this trading guide, you will know if you have what it takes to succeed in this business.

First and foremost, when day trading, it is essential to have a structured approach and a rule-based strategy. It’s like swing trading or position trading  you won’t trade every day and you won’t make money every day. So you need a crypto day trading strategy to protect your balance.

The highly volatile nature of Bitcoin and other cryptocurrencies has made the crypto market like a roller coaster. This is the perfect environment for day trading as during the day you will have enough up and down trades to make a decent profit.

Moving forward, we’ll teach you what you need to learn how to trade cryptocurrencies, and we’ll share some rule-based day trading strategies .

How to trade crypto during the day

The unique characteristics of the cryptocurrency market require you to have a solid understanding of how it works. Otherwise, your experience might be like skydiving without a parachute.

The good news is that we will give you everything you need to survive in crypto trading .

Cryptocurrency market day trading can be a very lucrative business because of its high volatility. Since the cryptocurrency market is a relatively new asset class, it has resulted in significant price swings.

 

Before  Bitcoin or any other altcoin, you should wait until we have high volatility. The good news is that even if we have low volatility compared to other asset classes, this volatility is high enough for you to make a modest profit on your trades.

Cryptocurrency trading also requires the right timing and good liquidity to make the correct entries.

A lot of cryptocurrencies and crypto exchanges are very illiquid and illiquid to provide instant execution that you can find when trading Forex currencies.

Before trading Bitcoin or any other altcoin, it is important to check the liquidity of the cryptocurrency you want to trade. You can do so by verifying the 24-hour volume of a cryptocurrency trade.

CoinMarketCap is a good free resource for reading and assessing the market volume of any given coin.

Note * Always remember that not having enough liquidity can lead to significant slippage and subsequently to larger losses.

 

As said before, trading cryptocurrencies does not require trading every day. We prefer day trading crypto only when all the conditions are right for us. In this case, avoid trading on weekends and limit trading to days with the highest volume.

Put your seat belts up because next we will reveal how professional traders trade cryptocurrencies during the day.

 

 

Crypto day trading strategy

The idea behind cryptocurrency trading is to look for trading opportunities that give you the potential to make quick profits. If day trading suits your personality, join us and learn a step-by-step guide on how to day trade cryptocurrencies.

Now, before we go any further, we always recommend that you grab a piece of paper and pen and write down the rules of this expanding strategy .

In this article, we will look at the ‘buy’ aspect.

Step #1: Get coins with high volatility and high liquidity

As discussed before, the number one choice you need to make is to choose coins with high volatility and high liquidity. If you don’t trade Bitcoin, the most liquid currency available, and you prefer alt-coins, try choosing coins with good liquidity and volatility.

There are over 1600 coins on the market and growing. By tracking only the top cryptocurrencies, you reduce your selection area.

 

Smaller crypto day trading can also be a very lucrative business, but carries a higher risk. Remember, cryptocurrency prices can crash as quickly as they have risen.

Moving forward, you will learn how you can make money day trading crypto.

Step #2: Apply the Money Flow Index Indicator on the 5 Minute Chart

This particular day trading strategy uses a simple technical indicator, the  Money Flow Index . We use this indicator to track smart money activity and to gauge when institutions buy and sell cryptocurrencies.

The preferred settings for the MFI indicator are 3 periods.

We will also change the default buy and sell levels from 80 to 100 and from 20 to 0.

 

 

How to use the IMF indicator will be outlined in the next step.

See below:

Step #3: Wait for the cash flow index to reach 100

An MFI 100 reading indicates the presence of large sharks entering the market. When bought, smart money cannot hide their footsteps. They certainly leave a trail of their activity in the market and we can read that activity through the MFI indicator.

Technical indicators are not always right, so to adjust our day trading strategy we have added a few more conditions. Specifically, for the current day, we need to skip the first two MFI readings of 100 and study the cryptocurrency price reaction.

Price needs to hold throughout the first and second 100 MFIs.

 

 

If the price falls after the first two readings of the 100 MFI, this indicates that we will most likely have a down day.

Let’s now determine the right place to buy Bitcoin and the technical conditions that need to be satisfied.

See below:

Step #4: Buy if MFI = 100 and if the next candle is bullish

Now we can wait for the third MFI read out of 100. It doesn’t have to be the third MFI read = 100, you can do every other MFI = 100 read. If your timing doesn’t allow you to catch the third 100 readings on the MFI indicator, you can simply pick the next one as long as all other technical conditions are met.

Next, we also need the candle as we have MFI = 100 to become a bullish candle. The close of this candle needs to be near the top, giving us a candle with a very small wick.

 

This brings us to the next important thing that we need to set up when trading cryptocurrencies, which is where to place our protective stop loss and where to take profits.

See below:

Step #5: Hide your protective stop loss below the low of the day. Make a profit in the first 60 minutes after you open a trade.

The obvious place to hide your protective stop is below the intraday low. A break below it would signal a change in market sentiment, and preferably out of the trade. This could also signal a reversal date.

We are more flexible when it comes to our exit strategy. However, the only rule you need to follow is to take profits in the first 60 minutes or the first hour after your trade is activated. Holding trades longer than an hour will result in a lower success rate. At least that’s what our backtested results showed us.

 

 

Conclusion – Cryptocurrency Trading

If you take the time to read crypto trading tutorials all day, then you should be able to buy and sell Bitcoins and alts and make some daily profit. If you are interested in learning how to trade cryptocurrencies daily , be sure to arm yourself with enough information before diving into the markets.

Cryptocurrency trading can be a great way to grow your crypto portfolio and it’s a very lucrative alternative to the holding mentality that it cripples the crypto community.

Making a crypto trading day can be a lot easier due to the highly volatile nature of the crypto market. High volatility suits day trading very well, so you have the right environment for success. You may also be interested in reading our guide to the Best Cryptocurrency Investments for 2020.