Day trading involves buying and selling financial instruments, in this case, crypto, within the same day, often multiple times.
Unlike long-term investing, day trading is fast-paced, requires a deep understanding of markets, and demands a strong grasp of risk management.
If you’re aiming to consistently profit from the crypto market’s short-term moves, day trading should be on your radar.
Recently, tokens like ALPACA, OM, LAYER and MEMEFI saw significant intraday volatility, with OM plunging nearly 90%.
Day traders who caught these moves secured notable profits, and we may yet see more tokens follow a similar pattern.
This guide walks beginners through the fundamentals of day trading, including strategies, tools, account setup, and risks.
Post Summary
Understanding Crypto Day Trading
Crypto day trading is the practice of entering and exiting positions in digital assets such as Bitcoin, Ethereum, or altcoins within the same day, often within minutes or hours.
The goal of a day trader is not to invest in the long-term value of a coin or project, but to exploit short-term inefficiencies and price patterns using real-time data, technical analysis, and strict risk controls.
Day traders in crypto often:
- Use technical analysis over fundamentals
- Rely on liquidity and volatility to find opportunities
- Trade on centralized exchanges (e.g., MEXC, Bybit) or decentralized exchanges (DEXs) (e.g., Avantis and Paradex)
Take for example:
Suppose a trader notices that Ethereum (ETH) is forming a bullish flag pattern on the 15-minute chart.
The price is consolidating at $1,050 after an earlier surge. The trader enters a long position at $1,060 with a stop-loss at $1,020 and a target at $1,120.
A few hours later, ETH breaks out as expected and hits the target. The trader closes the position with a $60 profit per ETH.
This entire process from setup to exit happens within the same day, with no overnight exposure to risk.
How does a day trader differ from a long-term trader? Let’s break it down.
Day Trading vs Long-Term Trading
Day trading and long-term investing operate on fundamentally different philosophies.
A long-term trader, often referred to as a HODLer in crypto, buys assets based on their potential to grow over months or years.
This type of trader is less concerned with short-term volatility and more focused on fundamentals, such as project adoption, tokenomics, and developer activity.
In contrast, a day trader is focused on intraday price action, liquidity, and volume.
They operate on lower timeframes (like the 1-minute, 5-minute, or 15-minute chart), executing multiple trades in a single day without holding positions overnight.
Note that between these two is the swing trader, who holds positions for several days to capitalize on broader short-term trends without the pressure of closing trades within hours.
While long-term traders ride market cycles and aim for exponential returns, day traders rely on timing, technical skill, and discipline to make smaller, more frequent profits.
Step-by-Step Guide: How to Start Day Trading
1. Choose the Right Exchange
Choose reputable exchanges with high liquidity, low fees, fast execution, and advanced trading tools.
Popular choices include MEXC and Bybit. You can explore a full list of top exchanges [here].
If you prefer trading on DEXs, especially to position for potential incentives or rewards, Avantis and Paradex are solid options.
2. Open and Fund a Trading Account
After selecting your exchange:
- Complete KYC (if required)
- Fund your trading account by deposit crypto USDT or USDC
- Start with a small amount you’re willing to lose
3. Understand Market Pairs and Price Movements
Crypto assets are often traded in pairs (e.g., BTC/USDT, ETH/BTC).
Learn how quote and base assets work, how volume, volatility, and order books affect prices, and how to track the following:
- Volume spikes as signals of strong moves
- Volatility indexes (e.g., Crypto Volatility Index – CVI) for risk levels
- News catalysts that can trigger sudden moves (e.g., ETF approvals, hacks, major announcement, e.g., from Trump, airdrops)
4. Learn and Practice Technical Analysis
Day traders rely heavily on chart patterns and indicators. Master the basics of:
- Support and Resistance Levels
- Trendlines and Channels
- Candlestick Patterns (e.g., doji, engulfing)
- Indicators:
Lastly, learn how to use TradingView to analyze charts and test setups.
5. Choose a Strategy
Beginners should stick with one or two strategies before expanding. Common crypto day trading strategies include:
(a) Scalping
Scalping is a fast-paced strategy where traders make many small trades in a single day, aiming to profit from tiny price changes.
It requires quick decision-making, strong focus, and a platform with low trading fees.
(b) Breakout
This strategy involves entering a position when the price breaks through a key resistance or support level.
It works best when the breakout is confirmed by increased trading volume, signaling strong momentum behind the move.
(c) Momentum trading
This strategy focuses on assets that are already moving strongly in one direction.
Traders using this strategy typically rely on technical indicators like RSI, MACD, and moving averages to confirm that the trend has strength and may continue.
(d) Range trading
This strategy is used when the market is moving sideways rather than trending.
Typically, traders identify horizontal support and resistance zones, buying near support and selling near resistance, while carefully managing risk in case of a breakout.
6. Learn How to Trade Futures
Futures trading lets you bet on the price movement of crypto without owning the asset itself
Learn how to:
- Open and close long (buy) and short (sell) positions
- Set your stop-loss and take-profit levels
- Choose between cross-margin and isolated margin
- Decide how much of your portfolio to risk per trade
You’ll also need to understand how leverage works. Leverage lets you trade with more money than you actually have but it also increases your risk. Use it carefully.
Start small. When I was new to futures, I began with $10, 3x leverage, and isolated margin. That helped me practice safely before scaling up.
7. Risk Management Is Non-Negotiable
Without proper risk control, day trading becomes gambling. Key principles:
- Never risk more than 1-2% per trade. You can use the Afibie Calculator to automatically calculate your ideal position size
- Always use stop-loss and take-profit orders
- Avoid overtrading or revenge trading
- As a beginner, use low leverage to avoid getting liquidated quickly
8. Use the Right Tools
To stay competitive, crypto day traders often use:
- Trading Bots (Some exchanges offer built-in bots, but if you prefer a more advanced or specialized options, see here)
- Order Flow Tools (e.g., TensorCharts, Bookmap)
- Crypto News Aggregators (e.g., Cryptopanic, CoinMarketCal)
- Portfolio Trackers
- Telegram alerts from reputable alpha channels (e,g,, Afibie, Achillascrypt)
If you’ve honed your trading skills to this level—kudos! You’ve done well.
However, don’t be in a rush to start trading with real. Instead, focus on consistently testing your strategies using a demo account.
This helps you to to accurately assess your readiness and success rate as a trader.
Even after becoming an expert, you still need to backtest your strategy before entering a trade. Let’s break down what backtesting really means.
The Importance of Backtesting
Backtesting involves applying your trading rules to historical data to see how your system would have performed.
It helps you confirm your strategy, and see how it performs in different market conditions.
Here is an example:
Let’s say your strategy is to buy Bitcoin when the RSI drops below 30 (oversold) on the 15-minute chart and sell when it reaches 50.
To backtest this, you go to TradingView, load past BTC/USDT charts, and manually scroll through different days, noting when RSI dipped below 30 and what happened after.
You record how many times the trade would’ve hit your target, how often it failed, and the size of potential gains or losses.
After testing this setup over, say, 30 trades from the last month, you find that 22 of them were profitable.
Now, you have data to support your setup and can tweak it based on what you observed.
Note that backtesting doesn’t guarantee future results, but it gives you a hint into what could possibly play out.
Is Crypto Day Trading Profitable?
Crypto day trading can be really profitable because the market moves fast, and there’s a lot of volatility.
In addition, leverage can help you make bigger moves, which means more chances to profit quickly.
With the right strategy, keeping your emotions in check, and managing risk, you can take advantage of price swings to make steady profits.
Overall, success takes work. It’s all about having a solid plan, practicing regularly, and backtesting to fine-tune your approach.
Also, profit isn’t guaranteed, but if you stay disciplined and adjust your strategy as the market changes, you can see consistently see good profits over time.
How to Become a Successful Day Trader
Here are five key tips:
1. Start Small, Learn Fast
Don’t rush in with big capital. Use small amounts to practice and understand the market dynamics.
2. Stick to a Simple Strategy
Pick one or two strategies that suit your style, and master them before trying anything else.
3. Keep Emotions in Check
Don’t chase pumps or panic sell. Discipline matters more than hype.
4. Use a Risk Calculator
Tools like the Afibie Calculator help you manage your trade sizes and avoid overexposure.
5. Create Your Trade Journal
Keep a simple record of your trades; entry, exit, reason, and outcome. This helps you spot mistakes, track progress, and fine-tune your strategy over time.
Conclusion
Day trading isn’t for everyone, but for those who take the time to learn, practice, and stay disciplined, it can be a solid way to earn from the crypto market.
You’re not going to win every trade, and that’s okay, the real growth is in showing up daily, managing your risk, and slowly improving.
So, has this post helped you better understand how day trading works?
Do you feel more confident about giving it a shot?
If this helped you or made the path clearer, feel free to share it with someone else who’s just getting started… or click the ‘SM’ buttons below.
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