Trading crypto is an art form, and not everyone can get it right at first. Especially now that market is growing at a tremendous pace, and the choices of cryptocurrencies are increasing. This makes it difficult for new entrants to get started with trading and investing in cryptocurrency, especially if they do not want to risk their money on something they aren’t familiar with.
Never thought you could earn $100 a day with cryptocurrency? With the right education and tools, it’s actually not that hard. This blog will guide you through the steps necessary to make $100 a day when day trading crypto.
Day trading crypto is a short-term trading strategy that involves the purchase and sale of crypto assets at a same time. It is high risk due to the volatility and liquidity of cryptocurrency markets. To be consistent in this kind of field, more knowledge of crypto and blockchain technology is required.
A unique feature of Day trading is that involves making frequent trades of one or more securities throughout the day in order to profit. While traditional buy-and-hold investors are concerned with long-term performance, day traders are more concerned with making quick profits.
Good Strategies For Trading Cryptocurrency To Earn $100 Per Day
The cryptocurrency markets have become a popular choice for day traders in recent years. The cryptocurrency markets are different from the conventional markets. They never shut down. It is possible to day trade cryptocurrencies without having a brokerage or margin account. It is therefore easier to access than the stock market.
Although cryptocurrency is a fascinating new industry, investing in it carries some risk. Investors in cryptocurrencies should take into account the market’s volatility and speculative nature is given the thousands of new cryptocurrencies that are surfacing on trading platforms and exchanges.
Regardless of the market, you need to understand crypto and trading principles.
Also read: My Top 3 Best Day Trading Strategies
How much money is needed to begin trading cryptocurrency?
For as little as $100, you can open an account. To place day trades and set stop-loss levels, you must have at least $500. With that much money, trading the markets won’t be a source of income for you. You might still be able to earn a few dollars each day, which will aid in the long-term growth of your account.
1. Pick a cryptocurrency trading platform
The first step for you is to choose the platform they intend to use. Any cryptocurrency trading platform that is not authorized in the US cannot be used by US traders because of restrictions like requiring KYC verifications. For this reason, it’s crucial to do your research when picking the best platform.
The trader should prioritize exchange liquidity, asset liquidity, and fees when selecting the platform to sell or buy cryptocurrency. The value of digital assets may change drastically due to the market’s extreme volatility. In this market, traders who desire to increase their profits must act quickly.
The first option you consider when trading cryptocurrencies might not be the best. And that’s okay! It can be challenging for beginning crypto day traders to make a decision due to the abundance of options and variations among the different crypto exchanges. That’s why I always emphasize using a simulator to get a feeling of trading in the platform without risking money.
Also read: Crypto Leverage Trading Platforms: My 4 recommendations (although this post was intended for leverage trading, you can still use one of these platforms listed using spot trading/non-leverage).
The main considerations when looking for the best trading platform are those listed above.
- Years in business: A longer time in the industry can suggest credibility and stability.
- Transaction fees: These are levied by exchanges when buyers or sellers complete a transaction. All cryptocurrency exchanges impose a transaction fee as a form of revenue. For trades over $10,000, the exchange may impose a transaction fee or not impose any fee at all. This is done to promote extensive trading.
- List of supported cryptocurrencies: Knowing in advance which cryptocurrencies you can trade can be useful for assisting in the selection of the best platform.
- User Reviews: Checking out various crypto communities and reading user reviews is one of the best ways to decide which exchange you should use.
- Liquidity: The ability and speed with which an asset can be exchanged for another without affecting its price are referred to as exchange liquidity. With little difference between the ask and bid prices, high liquidity crypto exchanges can quickly buy and sell assets.
Note: CoinMarketCap and Cryptowisser are trustworthy resources that enable traders to compare various platforms based on liquidity, trading volume, and supported cryptos. These tools are ideal for traders who want to see a deeper comparison of crypto exchanges.
2. Invest in a Trading Setup/Equipment
The majority of beginners have some unpleasant initial thoughts about day trading when they sit down in front of the computer. This is a fairly common response, especially when a screen is in front of you that is displaying a variety of charts, graphs, and an overwhelming amount of numbers.
You should prepare to spend money on a cost-effective day trading computer setup depending on how much experience and knowledge you have.
Read more: Budget-Friendly Day Trading Computer Setup
3. Plan your trading strategy wisely
You can select the points you are interested in investing in once your platform is set up. Market turbulence is essential for day traders in cryptocurrencies. The same chaotic market conditions that scare away investors who prefer to buy and hold can be profitable for day traders. You must take advantage of the volatility and liquidity of the cryptocurrency market.
I believe that reading charts alone are not enough to make a successful crypto day trader. It will be easier for you to evaluate the state of any potential investment if you have a basic understanding of the blockchain’s governance, size, and protocols. You should be prepared to learn about and stay current with blockchain developments relating to your chosen assets.
The significance of giving your decision on which coin to trade careful thought is another thing to keep in mind. Although investing in the top 15-20 coins by market capitalization is a common strategy for cryptocurrency, it’s still important to proceed with caution. The coins on this list are not all rational. You’ll need to conduct in-depth research to learn the answer.
Read more: What NOT TO DO When Day Trading Crypto
4. Day traders must comprehend and take volatility into account
Volatility describes the erratic nature of cryptocurrency price changes. Market volatility can be influenced by a variety of factors, such as news cycles, economic data, and research reports. In the crypto markets, the same factors may have little or no impact on crypto assets.
Small-cap altcoins are more erratic than more well-known and widely used cryptocurrencies like bitcoin and ether.
The total number of transactions in a given time period makes up the trading volume of a cryptocurrency.
Overall market activity can be used to describe this indicator of market interest. Greater liquidity is indicated by high trading volumes. High-liquidity cryptocurrencies frequently cost more. The cryptocurrency market is extremely liquid and erratic.
But not all cryptocurrencies can be viewed as being on an equal footing. Day traders in cryptocurrencies should carefully review their trading volume to see if an asset can be sold quickly or for more money than it was initially worth.
The blockchain technology that powers cryptocurrencies make the market for cryptocurrencies, which is still very new, one-of-a-kind. The price correlation between bitcoin and all other altcoins makes this clear. If Bitcoin miners leave a nation, the price of bitcoin might decrease.
As demand declines and the price of bitcoin declines, the altcoin market also does. It is a good place to start when choosing the best cryptocurrency asset to trade.
The decision to invest should not be based solely on these two elements. It would be best to take other aspects unique to the crypto into account. How are they mined and produced? Is there a lot of interest in the coin? When should you cut your losses if the coin price doesn’t rise by a certain date?
Read more: Profitable Crypto Interest Accounts For 2022
5. Join Forums and Channels
In the world of the internet, communities are extremely popular all over the crypto space. The beauty of these groups is that anyone can write anything they choose as long as they abide by the rules of whichever particular crypto group they are a member of. They can be a great way to learn more about various coins, learn about ICOs, and generally chat about whatever it is you want to chat about.
By learning what these online communities can offer and why they are so important, you can broaden your knowledge and maximize your overall experience with cryptocurrencies.
The benefits and drawbacks of day trading cryptocurrencies
Investments in cryptocurrencies have a high risk/high reward ratio. You should be aware that because cryptocurrency is a relatively new class of digital asset, their investments could lose value.
You also should take the time to familiarize yourself with tax laws governing cryptocurrency profits. Cryptocurrency, for instance, is subject to short-term capital gains tax. On any cryptocurrency held for less than a year, you are subject to marginal income tax. You should include cryptocurrency gains in your online or professional accounting reports of earnings.
Conclusion: Earn $100 a day with cryptocurrency
Anyone with access to a cryptocurrency exchange can trade it. Except for confirming their identity and funding an exchange account, there are no additional restrictions on your ability to access, research, or interact with the cryptocurrency markets. People who want to own bitcoin but are unable to invest $60k or more can buy and sell fractions of any cryptocurrency.
The cryptocurrency markets are accessible throughout the year, open around-the-clock, and traders can buy and sell at any time. The New York Stock Exchange and Nasdaq open for business from 9:30 a.m. till 4:00 p.m. ET. ET.
The decentralized blockchain technology underlies cryptocurrencies. Its goal is to make users anonymous and give them the ability to process payments directly.
Will you lose all your money with crypto? Here’s what I have to say about it:
The exchange you’re going to trade on moves just as quickly as the cryptocurrency world does. Having said that, it makes no difference to a day trader whether they are considering a long-term hold or trying to profit from their investment in a single day. You must pick the appropriate exchange for you and put into practice a risk-management plan specific to your trading activity.
Day trading cryptocurrencies could ultimately be very profitable. To benefit from the luxuries of the cryptocurrency world, day traders should employ the appropriate crypto trading strategies, and they will probably close their positions before the day is over.
Want to learn how to start day trading? Check out Martina’s Learn to Trade & Invest Crypto Academy platform to get access to a complete trading & investing video curriculum, trading resources, our trading community, e-mail support, and 2 Zoom lives with Martina every month. Try it out for 2 weeks 100% FREE!