Guide to Day Trading Cryptocurrency

Day trading is a trading strategy that involves entering and exiting positions on the same trading day. Since the trading happens within the same day, this strategy may also be referred to as intraday trading . The goal of day traders is to use intraday trading strategies to try and profit off of price changes in a financial instrument.

The term "day trader" originates from the stock market, where trading is open only during business days of the week.

day traders never leave positions open overnight since they aim to capitalize on intraday price movements.

How do day traders make money?
Successful day traders will have a deep understanding of the market and a good chunk of experience. Day traders will typically use technical analysis (TA) to create trade ideas. They will usually use volume , price action, chart patterns , and technical indicators to identify entry and exit points for trades. As with any trading strategy, risk management is essential for success in day trading.

As fundamental events may take a long time to play out, day traders may not concern themselves with fundamental analysis (FA) . Even so, there are some day traders that base their strategy around "trading the news." This involves finding assets with high volume thanks to a recent announcement or piece of news and taking advantage of the temporary spike in trading activity.

Day traders aim to profit off of market volatility . As such, volume and liquidity are crucial for day trading. After all, day traders need good liquidity to execute quick trades. This is especially true when it comes to exiting a position. A large slippage on just one trade can have a devastating impact on a day trader's trading account. This is why day traders will typically trade highly liquid market pairs.

Some day traders will only trade one market pair, such as BTC/USDT . Others will create a watchlist based on technical or fundamental attributes (or both) and choose what instrument to trade from that list.