In one of our previous blogs, we introduced a quick guide to Day Trading and Spot Trading. Moreover, in the last blog, we explained what are the differences between those trading strategies. Today’s blog will make you an expert on day trading strategy so if you think day trading is your way to profitable trades don’t forget to read until the end. 

Day trading is the new G Zen fad that has become popular rather increasingly fast. Everyone is fascinated by the quick profits intra-day might help you make. However, day trading has more victims than successes. People often tend to overshadow the other important factors like the extreme stress that comes with an open position in the market, continuous monitoring taking up a lot of your time of the day, the inconvenience of not doing any other work while in a trade, and so on.  

Day trading is simply understood as using leverage to buy more cryptocurrencies than one can afford at his current capital level and buying and selling it on the same day. The leverage levels depend on exchange to exchange and may be different. Due to high volatility, some cryptocurrencies are not allowed to be traded on leverage.

Some important steps to follow while day trading:

1) One should know what he/she is trading in when buying cryptocurrencies on a day trading basis. Cryptocurrency can be very volatile and give moves in either direction very fast and in a very short span of time. It is important to trade in cryptocurrencies whose volatility is known and the daily move it gives to gauge the risk/reward ratio and trade accordingly.

2) Strict stop loss with a trading strategy that has been practiced multiple times to perfect it.

3) The trader should know his risk appetite and plan his trades accordingly. Leverage trading often leads traders to take on more risk than they could and this leads to traders draining out their entire capital in a failed trade.

4) Proper risk management steps should be taken into account and a trader should not aim to risk more than over 3% of the capital per trade. ( Stay tuned for our guide to risk management)

Day traders use numerous intraday strategies. These strategies include:

  • Scalping: This strategy focuses on making numerous small profits on ephemeral price changes that occur throughout the day.
  • Range Trading: This strategy uses pre-determined support and resistance levels in prices to determine the trader’s buy and sell decisions.
  • News-based trading: This strategy seizes trading opportunities from the heightened volatility that occurs around news events.
  • High-Trading frequency (HTF): These strategies use sophisticated algorithms to exploit small or short-term market inefficiencies.

Market-specific expertise and knowledge

Without knowledge of market fundamentals, day traders frequently lose money. A decent place to start is with a basic understanding of technical analysis and chart reading. Charts, however, might be misleading if you don’t have a thorough understanding of the market and its specific hazards. Do your research and learn all there is to know about the things you trade.

An adequate capital base

Traders should only risk the capital that can be afforded to be lost if used by shrewd day traders. This helps keep them from becoming bankrupt and prevents emotion from playing a role in their trading decisions. To profit from intraday price changes, which can range from pennies to fractions of cents, it is frequently required to have a significant amount of capital. Day traders who wish to use leverage in margin accounts must have enough cash on hand. Large margin calls may be immediately triggered by erratic market fluctuations.


Day traders heavily rely on market volatility to make money. If a cryptocurrency moves significantly during the day, a day trader might find it appealing. Day traders also choose highly liquid cryptocurrencies since they can adjust their positions without affecting the cryptocurrencies price when they do so. Investors may decide to acquire it if the price rises. A trader may elect to sell short if the price drops lower in order to profit from the price decline. Whatever method a day trader employs, they typically seek to trade a stock that moves a lot.

Day trading is a full-time commitment and should be done by only experienced traders when one has acquired adequate knowledge to practice it. You can check out our Stop-Limit/Stop-Market, Take-Profit-Limit/Take-Profit-Market features. We watch the markets 24/7 for you, so you can relax, knowing your strategy is locked in.

Click down below to start your smart crypto trading journey with CoinPanel.