Day trading cryptocurrency is one of the most profitable and simple ways to profit from the cryptocurrency market. Many traders today are learning to enter and exit the market within a day, profiting massively from coin price volatility. This guide explains the best time frame for day trading cryptocurrency.
What is Day Trading in Crypto?
Crypto day trading is a trading strategy that entails entering and exiting a position in the market on the same day. It is also known as “intraday trading” because trades are typically opened and closed within a day.
To make a profit, day traders make frequent trades of one or more securities throughout the day. While traditional buy-and-hold investors are concerned with a company’s long-term performance, day traders seek to profit from more immediate opportunities.
Successful day traders use various resources and tools, such as stock screening software or trading simulator software, to profit from short-term price changes in stocks, bonds, and other financial instruments like commodities and currencies.
The Best Time Frame for Day Trading Crypto
The time-based interval on a chart is referred to as the “trading time frame.” Time-based because the option is typically available from the shortest time frame of 1 second up to yearly charts. Below is the Best time frame for Day Trading:
1 Minute Chart
For automated trading, the smallest minute chart time frame performs exceptionally well. It is also a perfect time frame for experienced day traders who know exactly what to look for. The 1-minute time frame is, by definition, a timing time frame. If you spot an entry on a higher time frame, for example, you can select the 1-minute time frame to precisely time the entry point.
Trading from the 1-minute chart all day does not make much sense, and this is because you must analyze 60 candles per hour and over 300 candles during regular trading hours on the NYSE and Nasdaq.
5 Minute Chart
The 5-minute chart is the most commonly used time frame by day traders. This is because 12 candlesticks per hour are manageable for manual trading, and it is the ideal combination of a fast day trading time frame like the 1-minute chart and a slow 15-minute chart.
The primary advantage is that technical analysis such as trend pattern recognition and trend lines can be plotted with enough time before the new candle is completed or finished.
15 Minute Chart
The 15-minute chart is the best time frame for day trading traders who prefer to trade at a slower pace. There are only four candles to monitor per hour and having plenty of time between each completed period is more relaxing than having updates every minute.
The 15-minute time frame works particularly well for day traders who are monitoring multiple stocks or other assets at the same time. While it is difficult to monitor 10 stocks in a 1-minute time frame, it is much easier to do so on a 15-minute chart.
Day traders who focus more or are more interested in one stock at a time consider using a combination of the 1-minute and 5-minute time frames. The 2-minute and 3-minute time frames are also used, but most traders use the 1-minute and 5-minute time frames. As a result, when setups appear on the major ones, you are more likely to see follow-through on those time frames than on less frequently used time frames.
Traders who monitor more than two stocks simultaneously should consider using a higher best time frame for day trading, such as the 15-minute chart. The opening range breakout is a popular setup on the day trading time frames. This can be seen in our examples of a one-minute opening range breakout, a five-minute opening range breakout, and a fifteen-minute opening range breakout.
Which Crypto Coins are the Best for day trading?
Day traders seek volatility. Volatility is highest in micro coins or coins with small market capitalizations compared to other cryptos. At the moment, any coin with a market cap of less than $1 billion is classified as a small cap. SiaCoin (SIA), Basic Attention Token (BAT), and Fusion are three small-cap coins with high trading volume (FSN).
The Best Time Frame For Short-Term Trading
Hourly time frames are used by short-term traders, who hold trades for several hours to a week.
The Best Hours To Trade Crypto
Peak trading hours for a market are typically 8 a.m. to 4 p.m. in its local time, and these are the trading hours when each region sees the most trade volume. Although a market can be “closed,” large movements in the global market can occur as a result of news and speculation.
Best Candlestick Time Frame for Day Trading
Regarding the best candlestick time frame for day trading, the 5-minute candlestick chart and the 15-minute candlestick chart are the most commonly used time frame charts for intraday trading.
The candlesticks have four points, which are commonly referred to as OHLC (open high low close)
What is the best time of day to sell Cryptocurrency?
Most people sell their assets, especially if the value has increased. Although it is preferable to sell when the price is high, a price drop should never be the sole reason for selling. Here are some important factors to consider before selling Cryptocurrency:
- When other cryptocurrencies outperform one of your current crypto holdings, it’s time to sell to pursue better investment opportunities.
- You should probably sell when the value has more than doubled or tripled since you purchased it.
- You can sell if you no longer believe in its long-term success due to a lack of development and dwindling community support.
Is day trading crypto profitable?
Crypto day trading is a high-risk activity. Invest only what you can afford to lose. But if you approach day trading with the same seriousness as any other job and learn everything there is to know about the craft and the assets you are trading; you will be profitable.
How much do crypto day traders make?
Day trading is a fantastic way to make money online in the cryptocurrency space. It can return 5% to 10% on your investment in a single day, and its profits from the price fluctuations of an asset, in this case, Bitcoin.
Do you need 25k to day trade crypto?
However, FINRA does not regulate Cryptocurrency. When it comes to Cryptocurrency, one can day trade with less than $25,000 in their portfolio to begin or in the long term.
What time is crypto daily close?
The cryptocurrency markets are open from 12:00 a.m. to 12:00 p.m., so you can open and close positions whenever you want, even on the weekends.
How much do I need to trade crypto day?
With an easy-to-use interface and a low minimum balance of $10 in most countries, eToro makes it simple for beginners to enter the market. The platform is also well-known for having a low trading fee of only 1%.
Making trading decisions based on the best time frame for day trading can significantly increase the profit potential.
Cryptocurrency day trading can be very profitable if done correctly. However, it can be difficult for newer traders, particularly those who are unprepared or lack a clear trading strategy, and the best way to mitigate these difficulties is through automation.
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