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Top 9 Crypto Day Trading FAQs Answered: Everything you Wanted to Know!

Cryptocurrency trading has boomed since 2017. Currently, it is moving towards mainstream adoption. You should not only invest in the crypto market for the long run but also involve in crypto day trading for short-term gains.


Cryptocurrency Market Overview & Day Trading

In mid-2017, the market capitalization of the global crypto market was around US$89.2 billion. In early May 2021, it increased to an all-time high at near US$2.5 trillion. Currently (August 2021), it is hovering around US$2.08 trillion. The global cryptocurrency market has increased by over 2,330% since mid-2017 (in just 4-years). This means that the average annual growth rate of the cryptocurrency market is over 580% in the last 4-years.

Cryptocurrencies (including Bitcoin BTC, the largest crypto in terms of market cap) are characterized by extremely high volatility as well as trading volume. A 10% price volatility is considered normal in the crypto market. This is the reason why most cryptocurrencies are considered best for day trading.

Let me walk you through the answers to various questions you have in your mind related to crypto day trading. 

FAQs (Frequently Asked Questions):


#1 What is Crypto Day Trading?

Day trading crypto refers to buying and selling of cryptocurrencies such as Bitcoin BTC, Ether ETH, and other altcoins (including Defi coins and NFT tokens). Cryptocurrency traders can buy cryptos through crypto currency exchanges and online brokerages and sell them on the same trading day to make a profit. The process of day trading crypto is similar to buying and selling other assets (stocks, precious metals such as gold and silver, etc.) on the same trading day.

Day traders usually make use of the price fluctuation of an asset to make small profits. In many cases, they make multiple single-day trades on multiple cryptocurrencies to increase their chance of making profits and also increase the aggregate profit amount.


#2 How does Crypto Day Trading Work?

Crypto day trading involves short-term holding, where a cryptocurrency is held for a few hours. A day trader buys and the open position (long position) is squared off within the same trading day. The idea behind day trade is to sell your bought crypto before the end of the day to make a quick and small profit.

To understand how it works, let me walk you through it with the help of two examples.

Example #1

Suppose, you buy 1,000 XRP coins at the rate of US$0.80 per coin with the expectation that its price will increase in the next few minutes. Your expectation is based on the announcement that a big US bank will use XRP for their international payments.  

The price increases to US$0.816 per XRP coin after 10 minutes. Now, you decide to sell it to make a quick profit. So, after selling, you make a profit of US$0.016 per XRP coin. This means you make a small profit of US$16. Therefore, you made a profit of 2% in just 10 minutes by investing US$800.

Example #2

Now, suppose, you are studying the charts of EOS (EOS). You find out that the chart formations are indicating a continuation of price rise. So, you decide to buy 100 EOS at a price of US$17 per EOS coin.

In a couple of hours, the price increases to US$24 per coin. But after that, the price starts to drop and you decide to book profit. Ultimately, you sell at US$21 per coin. This means you make a profit of US$4 per coin. In aggregate, you make a profit of US$400 in just a couple of hours by investing a total amount of US$1,700. Therefore, you make a 23.5% profit in just a couple of hours.  

Stop Loss

The above two examples are successful trades. However, the prices could have easily dived below your bought prices. In that case, you would have made a loss. If you see that the price of a crypto coin is not behaving as per your prediction then you’ve to stop loss at a certain percentage. The thumb rule is to cut your loss at either 1% or 2% drop in price.

Factors Influencing Price Fluctuation

Look out for these factors that may cause fluctuation in price:

  • Breaking news
  • Industry changes
  • A country’s regulation change w.r.t. cryptocurrency
  • Update of blockchain technology or hard fork
  • Inclusion of new product features
  • Earnings report
  • Rate of unemployment
  • Strength of US Dollar
  • Inflation rate
  • Geopolitical uncertainties
  • Earnings report
  • Job reports, and many more 

Price volatility of a cryptocurrency may change drastically with the above factors. Now, read the charts or check other technical factors to buy or sell cryptos to make profits daily.


#3 Is Crypto Day Trading Profitable?

Yes, the day trading of cryptocurrency is very profitable.


#4 How to Make Profit from Day Trading Cryptos?

To make a profit out of your crypto day trading, you must follow a structured step-wise approach. Until and unless you are systematic and technical in your approach (with a good deal of experience), it’ll be difficult to make a decent profit. That’s why you should choose a day trading strategy wisely.  

Here is a simple day trading strategy that can help you make profitable trades always. 

Step #1: You have to choose the most volatile cryptocurrencies with high liquidity such as Bitcoin and Ethereum.

Step #2: Use a simple indicator such as Money Flow Index (MFI) on the 5-minute chart. Now, wait for the money flow index to reach the 100 level. Once the MFI indicator reaches 100, you’ve to check whether the subsequent candle has become bullish.  

As technical indicators may not always be true, we’ve to skip the first two MFI readings of 100 and look at the reaction of the cryptocurrency price. The important thing to note here is that the MFI reading must hold 100 in the first two instances. In case, the MFI falls below 100 after the first and second 100 MFI readings, there are high chances that the crypto price would go down.

Once, the MFI reading becomes 100, you’ve to check whether the candle is bullish. Also, the candle must be near the upper end with very small wicks. Once all these conditions are fulfilled, buy at the third MFI or any other subsequent MFIs as long as other technical conditions are fulfilled.  

Step #3: In case, the price doesn’t move as per your expectation, you can put a stop loss. The stop loss is preferred to be put below the low of the day as a break below this level will indicate a shift in the market sentiment. Once this happens, it is best for you to get out of the trade and stop your loss to a minimum level.

Step #4: Booking profit is an art. However, as a general rule, try to book your profit during the first 60 minutes after you triggered the trade. The success rate of a profitable trade falls as you hold the crypto longer than 1 hour.

This is only one of the most effective methods of earning profit from your cryptocurrency trade. You can also learn the day trading of cryptocurrencies to earn profit every time.


#5 Does Crypto have Day Trading Rules?

Yes, you should follow certain day trading rules, if you want to be successful in day trading cryptocurrencies.

Top 10 Crypto Day Trading Rules to Follow

  1. Don’t get carried away by the sentiment of FOMO (Fear of Missing Out).
  2. Always trade daily with a plan.
  3. Avoid making any emotional decisions while trading.
  4. Don’t trade when you’re going through any adverse events in your personal life.
  5. Avoid buying cryptos at their tops or bottoms.
  6. Don’t add to a cryptocurrency trade where you’re making a loss.
  7. Always try to book profit within the first 1-hour after opening a day trading position. That’s why close your open position when you can and book profit. Don’t wait till it becomes a compulsion to sell.
  8. If you are making a loss in a particular trade, don’t hold on to it to make it an investment. Rather stop loss and leave that trade.
  9. Always have a fund for day trading. Choose such an amount to trade, which you are mentally ready to let go of. Don’t use resources more than the expendable fund you’ve created for day trading.
  10. When you are day trading, always try to book profit at small changes. Trading results can get enhanced with small changes.


#6 Which Crypto is Good for Day Trading?

The top 7 cryptocurrencies that are good for day trading are:

  1. Bitcoin BTC
  2. Ethereum ETH
  3. Tether USDT
  4. Tron TRX
  5. EOS EOS
  6. Binance Coin (BNB)
  7. Ethereum Classic ETC


#7 How to Learn Crypto Day Trading?

You can learn cryptocurrency day trading through actual trading. Experience is your best teacher. However, you can learn about crypto day trading by learning from different cryptocurrency courses.

Top 10 Courses to Learn Cryptocurrency Trading

  1. Cryptocurrency Foundations: For beginners
  2. One Core Program by Asia Forex Mentor: For beginners
  3. Cryptocurrency Fundamentals: Buy, Sell, Trade Cryptocurrency: For beginners
  4. Cryptocurrency: Wallets, Investing and Trading Masterclass: For beginners
  5. The Ultimate Cryptocurrency Trading Course by PiggiBacks: For beginners
  6. Cryptocurrency Trading: Technical Analysis Masterclass: For intermediate
  7. Complete Cryptocurrency Investment Course: Passive and Active: For intermediate
  8. Cryptocurrency Trading: Candlestick Trading Masterclass: For Advanced or Professional Traders
  9. Short Selling: Sell Bitcoin Before The Fall: For Advanced or Professional Traders
  10. Algorithmic Cryptocurrency Trading: For Advanced or Professional Traders


#8 What are the Best Cryptocurrency Day Trading Strategies? 

  1. Swing Trading
  2. Scalping
  3. Range trading
  4. News-based trading
  5. High-frequency trading (HFT)


#9 Which Crypto Exchange for Day Trading is Best?

The best cryptocurrency exchanges for day trading are:

  1. Binance
  2. Luno
  3. GDAX (Global Digital Asset Exchange)
  4. Bittrex
  5. Bitfinex
  6. Kraken
  7. Bitstamp

These are some of the leading cryptocurrency brokers through which you can start day-trading.


Day Trading with Algorithmic Trading for More Profit Everyday

Cryptocurrency Trading Robots such as automatically scan the market in real-time and trades for you. They run 24x7, which means that you can keep earning your passive income even when you are sleeping. This gives you an edge over other investors as it enables the bot to book profits on your behalf when other investors are sleeping.

Smart crypto investors always remain prepared to get the best of a big market move. They don’t wake up suddenly. To remain alert round the clock, they use cryptocurrency trading bots so that they don’t miss any big market movement. is a Trading Bot, cloud-based platform, on which you can connect to major exchanges such as Binance, Bitmex, Bitfinex, OKEX, Kraken, Bitstamp, and Bitpanda.

The best thing about the Napbots trading software is that you don’t have to monitor charts and candles to predict your next move. Any novice trader with zero skills can also start trading like a pro and earn money with this unique trading tool. Let Napbots take full control over your trades in just a few clicks. Now, sit back and enjoy earning money.

You may also check “Napbots Review - Simple Way To Increase Your Crypto Returns” before taking the plunge.


What’s so special about NapBots?

NapBots crypto trading software is special because it comes with:

  1. A unique trading algorithm that processes market data for you
  2. A unique crypto trading bot library so that you can create your own mix of trading strategies
  3. Autopilot mode that enables you to automate trading 24x7
  4. An easy-to-use interface so that you can copy the proven strategies of NapBots to make successful trades and make money


How does NapBots help you to Make Money?

With NapBots, you can enjoy financial independence by trading cryptocurrencies on autopilot mode and earn money automatically. To make it work on your behalf, you have to do the following:

Step #1: Connect to one of the available trust exchanges.

Step #2: Select from the unique list of performing Bots of NapBots

Step #3: Choose a plan that suits your investment style

Once you have completed these three steps, NapBots is ready to trade cryptos and earn money for you. Happy Trading!


Why Choose NapBots? 

  • NapBots offers complete trading automation solutions through the use of its own tested trading strategies; offering quantitative trading strategies previously reserved for hedge funds to the public.  
  • The setup and installation process are easy. So, the non-experts can also use it. The simple and special approach of NapBots helps it provide you with excellent ROI.
  • The team of professionals behind NapBots has extensive experience in the financial market. They have put their years of experience in place so that you can easily automate the management of your funds with no technical skills. This service can run 24/7 and work as your passive source of revenue even when you sleep.