Bitcoin Day Trading

We’ve previously examined general Bitcoin trading in depth. This article focuses on day trading Bitcoin.

What is Day Trading?

Given the chaotic sleep schedule of most traders, “day trading” could be better stated as:

Trading when it’s convenient to you, without holding any position while you sleep.

Day trading is an active and involved trading style which seeks to capitalise on short but significant price moves.

The good news is:

Bitcoin has more than its fair share of short but significant price moves! This makes Bitcoin a great instrument for day traders.

Why Day Trade Bitcoin?

We might go so far as to call Bitcoin the ultimate day trading instrument, based on these 5 factors:

Bitcoin volatility over time, currently averaging 4.5%

One Good Reason Not to Day Trade Bitcoin

Our guide to general Bitcoin trading covers the various timeframes and their related trading approaches. Be sure to consider all of them before committing to day trading! Day trading is demanding in terms of time, energy and attention. If you already have a busy lifestyle, it’s probably not a good fit for you.

How to Day Trade Bitcoin

You’ll need 4 things to get started with day trading Bitcoin:

Let’s discuss these elements in detail…

Bitcoin Exchanges for Traders

Check out our full article on the leading Bitcoin exchange by volume, Bitfinex. Other good options for traders include Bitstamp, Kraken, BTC-e, Cex.io, GDAX, Luno… the list goes on!

If you wish to search for a good exchange for your location and / or payment method, BuyBitcoinWorldWide exists for this exact purpose. Search for exchange (as opposed to “broker”) entries which specifically mention low fees, deep liquidity, and an interface designed for traders.

Trading Capital

Only day trade with funds you can afford to lose. If you’re a new trader, the odds are extremely high that you will lose your initial trading funds. Always start out with a small amount while you learn and practice and consider this amount as “school fees.”

Your Gameplan

Day trading is based on technical analysis; the ability to make market decisions based primarily on price charts. This skill takes a lot of practice and screen time to master. Even more important is a sound money management strategy. Markets can never be predicted with perfect accuracy so proper money management is key. It will minimize your losses due to wrong calls and maximize your profits when you get things right.

For further info, check out our general guide to trading.