Daily cryptocurrency trading: Best crypto

24, Apr - BLOG

Daily cryptocurrency trading is a short-term cryptocurrency trading strategy where traders open and close their positions within one day. The goal of this strategy is to take advantage of market volatility to make profits by speculating on price fluctuations. Such traders seek to capitalise on small price changes in the cryptocurrency market by buying at lower levels and selling at higher levels, or selling at higher levels and then buying back at lower prices.

Crypto traders actively use a variety of technical analysis tools such as chart patterns, trading signals and various indicators to make informed decisions. Successful traders usually seek to limit their losses by resorting to disciplined risk management techniques, such as properly sizing their positions and placing stop-loss orders.

Best crypto for daily trading

Bitcoin

• Price $64,932
• Market capitalisation $1,275.66 billion

Bitcoin is a cryptocurrency that stands out from the rest with its uniqueness and popularity. It leads the way in terms of both user love and market capitalisation. Being the first and largest cryptocurrency, its market capitalisation is currently estimated at $1,275.66 billion and its value reaches $64,932 per unit. Bitcoin is renowned for its high liquidity, which makes it an attractive asset for traders.

Traders can trade bitcoins around the clock, regardless of their time zone, because the cryptocurrency market knows no concept of time. BTC is the main cryptocurrency on the market and is highly volatile, which provides many trading opportunities. However, high volatility also means higher risks, so traders are advised to develop a risk management strategy to minimise potential losses when day trading.

Ethereum

• Price $3,161
• Market capitalisation $368.08 billion

Ethereum is one of the most popular altcoins in the cryptocurrency market. The demand for ETH is continuously increasing and it is currently priced at $3,161 with a market dominance of 16.8%. This cryptocurrency has good volatility, which provides traders with a great opportunity to make significant profits in a short period of time.

Ethereum went through a major change in 2022, moving from Proof-of-Work consensus mechanism to Proof-of-Stake. It always remains among the best cryptocurrencies for daily trading due to its popularity and stability. One of the key reasons why ETH remains at its peak is its high liquidity. There are always buyers and sellers in the market, ensuring that traders can get in and out of trades quickly.

Binance Coin

• Price $573
• Market capitalisation $83.72 billion

Binance Coin (BNB) has become one of the largest cryptocurrencies on the market and is the coin of the leading cryptocurrency exchange in the world, Binance. Although the Binance exchange has been banned in India by a decision of the country's financial intelligence unit, due to its global presence in the crypto market, Binance Coin remains a sought-after tool for daily cryptocurrency trading among investors.

The current price of Binance Coin is $573. BNB is characterised by high volatility, which opens up the opportunity for traders to make money on short-term price fluctuations. However, it should be remembered that this also involves certain risks. At the same time, BNB is known as a relatively stable cryptocurrency in the market, making it an attractive asset for those looking for balanced investment opportunities.

Ripple (XRP)

• Price $0.53
• Market capitalisation of $27.82 billion

XRP is currently priced at $0.53. This represents an affordable investment compared to other cryptocurrencies on the market. Despite XRP declining between 2021 and 2022, it started to show signs of recovery in 2023 and is currently showing a slight decline. However, XRP has great potential to return to stable growth.

The main advantage of Ripple is the high speed of transactions. Transfers are made within seconds, which is much faster than most other cryptocurrencies that require several minutes or even hours to confirm a transaction. That's why traders consider Ripple an ideal tool for profiting from short-term price fluctuations.

Solana

• Price $150.68
• Market capitalisation $63.75 billion

Solana has gained widespread popularity in 2021, surging to the forefront. The cryptocurrency ranked as the 5th largest crypto asset by market capitalisation and has grown by almost 11,000% in a year. It is often referred to as the "Ethereum killer" due to its low cost and high transaction speeds.

After soaring in 2021, Solana's price fell to almost $9.89 in 2022, but then showed signs of recovery and is currently at $150.68. One of the main advantages of this cryptocurrency is its scalability. The Solana platform is capable of processing around 65,000 transactions per second, making it one of the fastest blockchains in the world of cryptocurrencies.

Factors that determine the price movement of cryptocurrencies

Let's take a look at a few factors that determine the price movement of cryptocurrencies. Understanding these factors will help traders make informed decisions when choosing the best cryptocurrencies for daily trading.

1. Volatility

Volatility refers to the fluctuations in the price of a cryptocurrency throughout the day. Cryptocurrencies are known for their high volatility, which can lead to both gains and losses. Traders usually look for assets with high volatility as it provides more opportunities for profit.

2. Current events

Events in the cryptocurrency world can significantly affect prices. For example, tweets from famous personalities or news about regulation can cause dramatic changes in cryptocurrency prices. Being aware of current events allows traders to react quickly and adapt to the changing situation.

3. Trading volume

Trading volume shows how much cryptocurrency was bought or sold in a certain period of time. More volume usually means more activity in the market, making prices more reliable and predictable. Traders often prefer to work with cryptocurrencies with high trading volume.

With these factors in mind, traders can make informed decisions when choosing the best cryptocurrencies for daily trading. However, it is important to remember that the cryptocurrency market is unpredictable and there is always a risk of losing money.

How to choose the best crypto for daily trading

It is very important to find the right coins when it comes to day trading. Here are a few things to help you navigate specific crypto assets for trading:
 

• Choose a coin with high liquidity. This ensures that there are enough buyers and sellers in the cryptocurrency market to ensure traders can execute a trade quickly at a fair price.
• Choose a coin with high volatility. It allows traders to get in and out in a short period of time and make profits quickly.
• Before choosing the best crypto for daily trading, be sure to study the fundamental and technical aspects of the asset. This includes analysing the technology behind the coin, price charts and the development team to identify any patterns or trend lines that may be useful for your trading.
• Keep up to date with current events related to the cryptocurrency industry, and this also affects the price of crypto assets.

Strategies for daily cryptocurrency trading

Daily cryptocurrency trading requires traders to have experience, skills and a deep understanding of the market. Choosing the right strategy plays an important role in achieving success in the market. Let's take a look at a few trading strategies that can be used in daily cryptocurrency trading:

Scalp trading

This is a strategy in which a trader makes quick trades to make small profits. Scalping traders look for moments to make short trades and make money on small price changes. This approach requires an excellent understanding of risk management and discipline.

Momentum Trading

This strategy is based on identifying assets with a strong trend and making trades in the direction of that trend. Traders look for assets with notable price movements and trade according to these movements.

Arbitrage trading

In this strategy, traders take advantage of price differences between different exchanges or markets to make profits. They look for opportunities to trade on price differences and make money from it.

Trading on reversals

This strategy involves identifying assets that have experienced a significant price movement and making trades based on the assumption that the price will change. Traders look for moments to enter trades after significant price movements.

High-frequency trading

This is the use of automated systems and algorithms to execute high volume, high frequency trades. Traders using this strategy depend on quick reactions to market data.

Breakout Trading

This is a strategy where traders look for assets that fall outside of trading ranges and make trades based on the expectation that price will continue to move in the direction of the breakout.

Choosing a specific strategy depends on your strengths, understanding of the market and individual preferences. It is important to choose a strategy that suits your goals and trading style.

What to avoid when engaging in daily cryptocurrency trading

Here are the key things to avoid while engaging in daily cryptocurrency trading:

• Overtrading: Avoid trading too much in a short period of time, this can lead to losses due to trading commissions, market volatility and slippage.
• Emotional Trading: Trading based on emotions can lead to disastrous decisions. Fear and greed in the moment can cloud your judgement and push you to make irrational decisions.
• Trading without a plan: Having a clear strategy and plan is very important for successful day trading. Without a plan, you may make poor trading decisions.
• Chasing trends: Avoid following trends for fear of missing out on gains. Such trends can be short-lived and lead to losses. If you want to trade a trend, always stick to proven momentum strategies and keep your emotions under control.
• Ignoring fundamental analysis: It is very important not to neglect fundamental analysis as it provides valuable insight into the long-term prospects of the digital assets you trade and therefore adds another layer of safety.
• Lack of risk management: It is very important to always have a solid risk management plan in place to avoid losses. Never risk more than your loss budget and use stop loss orders every time.

Daily cryptocurrency trading can be profitable, but it is not for everyone. Research the market thoroughly, trade wisely, manage your risk and remember that success in this field takes time, experience and discipline. And our list of the best crypto for day trading will help you do just that.