Day trading strategy is a short-term investment strategy that is used by traders to make quick market profits.
A trader of altcoins, which are of less than $1 value could be traded with the strategy to have a consistent $500. For this traders have to go with the best day trading strategy which would support the trade and help in correct market prediction.
To find out more about this topic, let’s drive into the best day trading strategy for altcoins.
Best Day Trading Strategy For Altcoins
Cryptocurrency is a unique digital currency market that requires a trader to have a firm knowledge of its working for successful trading. Consequently, when a trader goes for day trading in such a volatile market they need to be prepared.
Day trading strategy is for high volatility and the crypto market is a new trading class they have a good amount of market fluctuations.
A trader before day trading altcoins should wait until the market has a reading of high volatility.
Along with this traders can take care of the timing and liquidity of the market. Traders can read this all through brokers’ help such as Cpaitalix which provides tools and indicators to predict market changes.
Here, is the strategy that traders can go with for Altcoins trading:
Scalping Trading Strategy
Scalping is a short-term excellent trading strategy that day traders can use to make money. The time period of the strategy is a maximum of an hour and a minimum of a few seconds.
The motive behind using the strategy is to look for opportunities that provide potential quick gains.
Here, we have a step-by-step guide for trading altcoins with the best day trading strategy, i.e, scalping.
Select Altcoins with High volatility and Liquidity
The first step of the scalping strategy is to choose the altcoins that are having high market volatility and liquidity. The crypto market has more than 600 altcoins to trade and the number is growing.
A tip that traders can follow is to go for the top altcoins in the market this would reduce the area of selection and traders can quickly select the best ones. The altcoins with low value have high risks, therefore, top ones are good choices.
Money Flow Index Indicator
The day trading strategy uses a technical indicator, Money Flow Index to analyze the market price changes.
This helps in tracking the activity of altcoins and gauging when to buy and sell them. The Index has three period preferred settings, the default buying, and selling levels are from 80 to 100 and 20 to 0.
Traders then wait for the Index level to reach 100 as it shows the big firms stepping in the altcoins market. They can buy at such times and sell when they find the market will go low.
Charts
Traders can also use the charts such as candlesticks to read the market impacts. When the technical indicator shows an index above 100 it is a bullish candle. The ending/close of the candle is near the upper end with small wicks.
This provides traders with important information that traders have to place their stop loss and take profits for reducing market risks and having high profits, respectively.
Stop-Loss and Take profit
Traders of the strategy then hide their stop loss below the low of the day. While the take profit is set during the initial sixty minutes of opening a trade position. This is significant for traders to protect their trades from loss.
When the break is below this signals a shift in market sentiment and is the time when traders should exit the trade. However, traders should be alert to reversal as well.
The profits should be taken during the first sixty minutes of the trade, once the trade gets triggered.
Conclusion
Crypto trading is the finest way to earn profits from markets. However, the markets are uncertain and require good knowledge. A trader can go scalping to make good profits from altcoins trading.
The article has listed steps and the best day trading strategy that is excellent to invest in the cryptocurrency market.
