Finding the right crypto to trade is often one of the biggest challenges of a day trader.
Most times, you don’t even know how to start your research.
In this article I would share how to find crypto to day trade and be profitable.
If you’re ready, let’s dive in
How To Find Crypto To Day Trade
1. Use Crypto Screeners
It’s the most effective way to find crypto to day trade and make good profits.
Tools like coinmarketcap, coingecko and tradingview offer screeners that you can use to find cryptocurrencies based on various criteria such as volume, price and market cap.
The best crypto screeners you can use are tradingview and coinmarketcap.
You can learn how to use the tradingview screener using this tutorial.
2. Follow Market News And Trends.
Following market news can help you buy into a cryptocurrency immediately a major news is released.
Most cryptos experience significant price movement based on news.
A cryptocurrency that has upcoming news is suitable for day trading due to the excitement of other traders.
Like the Bitcoin ETF that created significant momentum and kept BTC in an uptrend for months
You can find news on platforms such as Twitter, coinmarketcal, and Reddit.
3. Join Crypto Communities
You can join various crypto communities on Facebook, Telegram, and Reddit to discover promising cryptocurrencies you might not find on your own.
However, exercise caution to avoid falling victim to pump-and-dump schemes.
Some traders are paid to promote scam crypto projects, so it’s crucial to conduct your research and protect yourself from potential scams.
4. Analyze Volume And Liquidity
You can use tools such as coinmarketcap and coingecko to analyze volume and liquidity.
The more liquidity a crypto has, the more likely the price will change within a short time, which is good for a day trader because you can get in and out quickly.
5. Use Technical Analysis Tools
You can use technical analysis tools such as the relative strength index (RSI) to find crypto to day trade.
The RSI is a versatile tool and it’s one of the best indicators for crypto trading.
You can use the RSI overbought and oversold conditions to find crypto that might suit your day trading strategy.
Overbought (RSI > 70) shows a crypto that has been in an uptrend for a while and might undergo correction soon.
While oversold (RSI < 30) means the crypto has witnessed a massive sell-off and might reverse to the upside soon.
Combining the RSI levels and divergence can help you find profitable crypto to day trade.
6. Use On-Chain Analysis
You can use on-chain analysis tools to monitor whale wallets and find out the crypto they’ve been accumulating, which gives you an opportunity to buy in and make money from the price spikes.
Tools such as nansei.ai and Arkham intelligence provide in-depth information that can help your day trading.
How To Reduce Day Trading Fees
Use Low Fees Exchange
To succeed in day trading, you have to ensure the trading fees don’t eat up your capital. That’s why you should day trade on an exchange that has volume and low trading fees.
Some of the exchanges with high volume but low fees include OKX and Binance.
Use Limit Orders
Using limit orders in your day trading reduces your trading fees significantly.
If you place a limit order, you’re regarded as a “maker,” and you pay low fees.
But if you use a market order, you’re regarded as a “taker,” and you pay higher fees.
Makers are often rewarded by the exchange with low fees for helping to create liquidity in the market.
Trade 1-3 Times Daily
The more you trade, the more fees you will likely pay.
Keeping your trades to a maximum of three per day would help protect you from multiple fees due to overtrading.
How To Become A Profitable Crypto Day Trader
Use Stop Loss
I have seen a lot of traders trying to develop a trading strategy that doesn’t need stop-loss; such a strategy does not exist.
There is no strategy that’s 100% accurate; hence, you need a stop loss to help minimize your risk on the days your analysis doesn’t work.
Many traders are afraid of being wrong, but being wrong is part of trading.
Trading is not about making profits but about protecting your capital.
If your capital is protected, then you have a great chance of making profits, but if you lose your capital, you get kicked out of the market.
Improve Technical Analysis Skills
The more your technical analysis skills improve, the more likely you will become a better trader.
You have to invest in your education and sharpen your technical analysis skills if you want to be a profitable day trader.
I recommend you get the following books;
Technical analysis of financial markets by John Murphy
The new trading for a living by Alexander elder
How to day trade for a living by Andrew Aziz
Learn Lock-In Profits
The crypto market is very volatile and your profits can turn into a loss in under five minutes.
When the market moves in your direction, start locking in profits to ensure you don’t lose everything if the market decides to reverse its direction.
You can use trailing stop loss to lock in profits.
Frequently Asked Questions
Is Day Trading Crypto Worth It?
Day trading crypto can be worth it, but it comes with significant risks.
It requires a deep understanding of the market, technical analysis skills, and the ability to react quickly to price movements.
While some traders can make substantial profits, many others may face losses due to the high volatility of cryptocurrencies.
It’s important to have a well-defined trading strategy and risk management practices and only trade with money you can afford to lose.
What Is The Best Crypto For Day Trading?
The best cryptos for day trading are typically those with high liquidity and significant daily trading volumes. Some of the most commonly traded cryptocurrencies for day trading include:
Bitcoin (BTC): The most traded cryptocurrency, offering high liquidity and tight spreads.
Ethereum (ETH): Known for its strong market presence and volatility, making it ideal for day trading.
Binance Coin (BNB): Often has high trading volumes due to its use on the Binance platform.
Can You Day Trade Crypto?
Yes, you can day trade crypto. The crypto market operates 24/7, allowing for continuous trading.
