The Best Time to Day Trade Cryptos

Cryptocurrency is digital money and is the latest currency innovation. Intelligent investors are constantly seeking ways to make money from the crypto movement. The commonly known way to trade crypto is to buy your chosen crypto at a low price and sell at a higher future price on an exchange. Apart from buying and selling crypto on an exchange, professional traders day trade cryptocurrencies as CFDs with a regulated crypto broker.

Day trading crypto is simply when a trader seeks to potentially profit from buying or selling specific crypto assets (as CFDs) with small market movements that happen within a single trading day. Day trading is also referred to as ‘Intraday trading’, which means all trades are opened and closed within one trading day and do not stay over to the next trading day. Despite the fact that the crypto market is open 24/7, some brokers do not allow traders to trade crypto on weekends. If you are a crypto trader that does not want to be limited, there are definitely brokers that trade crypto on weekends you can choose from.

How Crypto Trading Works?

There are two major types of crypto trading. The more common crypto trading involves buying the actual cryptocurrency at a lower price and selling off at a higher future price via an exchange. The more advanced crypto trading involves trading crypto assets as CFDs through brokers without owning the crypto asset being traded. When trading cryptos as CFDs, you don’t need to own the crypto nor store it in a wallet as your broker gives you assess to buy and sell cryptos with the option of leverage. Traders who trade cryptos as CFDs do so using one or more trading strategies. There are technical traders that solely depend on price chart patterns to decide when to buy or sell a crypto asset. While some other traders depend solely on fundamental analysis which involves following news trends to make trading decisions. Also, some traders combine both technical and fundamental analysis when trading crypto. Trading strategies can also be classified based on the total duration of the trade. This is where we hear terms like day trading and swing trading. Scalping is a very popular day trading strategy wherein a trade is opened and closed within seconds or minutes with the expectation to profit from small market moves.

The Best Time To Day Trade Crypto

Trading is a serious business and professional traders aim to profit from the financial markets over a long period of time. To achieve the desired level of profitability in crypto trading, it is important to control trading costs as much as possible. Every broker will charge trading fees and for crypto trading, these fees differ across different trading times. This difference in trading cost is largely due to differences in a crypto asset’s liquidity, volatility and trading volume. The best time to day trade any crypto asset is 8:00 am to 4:00 pm in its local time. Since crypto is a relatively new financial market (when compared to forex and stocks), its liquidity and volatility are very unpredictable, especially among altcoins. Most reputable brokers give traders assess to trade only popular cryptos like bitcoin, ripple, ethereum, and cardano. It is important to note that even popular cryptos can swing from amazing highs to ridiculous lows within a very short timeframe. For crypto day traders, this means you have to keep an eye on a lot of factors before making trading decisions. Three major factors to look out for are liquidity, volatility, and trading volume. These three factors will always have an influence on the spread you will be charged to trade any crypto asset. The best way to ensure you get the best spreads is to day trade crypto assets between 8 am and 4 pm in its local time.

Caution – When To Avoid Day Trading Cryptos

A winning streak when day trading cryptos can be very sweet but the reality of trading is that losing trades will also happen. It is okay to lose a trade because it’s a normal loss based on your trading strategy. Now, the very annoying part is to lose a trade just because the spread is too high and you didn’t pay attention to market liquidity, volatility, and trading volume. A very bad time to day trade crypto is on weekends when many traders are out of the market and trading volume is probably low. Traders using swing trading strategies are usually not affected by high spreads as much as day traders. This is because swing traders aim to profit from large market movements while day traders aim to profit from small market moves, and both traders will be charged the same spread for the same opened trade.

Conclusion On The Best Time To Day Trade Crypto

The goal of all crypto trading strategies (including day trading) is for traders to make a profit from the crypto market. In order to maximize potential profits, it is important for day traders to pay special attention to market liquidity, volatility, and trading volume before placing trades. The best way we have found to get the most favorable trading condition is to day trade crypto between 8:00 am and 4:00 pm in its local time. This does not mean you can not trade cryptos outside of these times. The most important thing is to always check trading fees, trading volume, and important news before day trading cryptos.

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December 29, 2022

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