Crypto Investing
12 Mar 2021

Best Day Trading Cryptocurrencies in India [2021]

CoinSwitch Kuber

Cryptocurrencies are one of the most attractive assets for day traders. They are super volatile and can change in value with every tick of the clock, giving traders the scope to make good profits in a short span of time.

However, day trading isn’t as easy as it sounds. Almost 90% of day traders lose money. 

Most people day trade only to make fast money and don’t put in the necessary work, which can sometimes become a gamble. They don’t realise that it takes skill and knowledge to day trade cryptocurrencies. It is a disciplined activity to speculate the immediate future of an asset. The more accurate your speculation, the higher your chances of making a quick profit. 

What is Day Trading?

To put it simply, Day Trading is the buying and selling of assets during the same day. You buy an asset expecting it will go up in value at some point in the day so that you can sell it and profit from the price difference. 

The buy and sell can happen within a few minutes, a few hours, or any period of time within the day. Day trading is also referred to as intraday trading because the buy and sell happen within the same day.

So what is day trading in cryptocurrency? Day trading cryptocurrencies is quite popular among beginners and professional traders alike. It’s buying and selling cryptocurrencies on the same day with the intention of a profit.  

Invest in Crypto With Just ₹100

There are several strategies that you can use to effectively day trade in cryptocurrencies. They help you make quicker decisions on when to buy and sell. However, since Crypto is a highly volatile asset, most day trading strategies are based on the price activities of a cryptocurrency on that particular day. 

For instance, Scalping is a trading strategy where traders take advantage of small price movements of the asset to make gains on big investments.

3 Factors to Determine Day Trading Cryptocurrencies

This is why it’s important for you to first understand what causes‘ price movements’ in cryptocurrencies. Three factors that help you determine that are – Volatility, Volume and Current Activities of a cryptocurrency.

factors that determine day trading cryptocurrencies

1.Volatility

Volatility refers to the extent to which the price of any cryptocurrency changes in a day. Since cryptocurrencies are volatile in general, they can even fluctuate between 10% to 50% a day.

The more volatile a cryptocurrency is, the higher its chances to either move positively or negatively. As much as this variation can prove to be profitable, it poses an equal level of risk.

Traders should bet their money on cryptocurrencies with upward price volatility. So that, as and when the asset spikes, you make a profit. During periods where your investment reacts negatively, you can use a limit order to curb your risk exposure.

The use of limit order in cryptocurrency trading can be beneficial for smart traders. Limit Orders help you set a profit and loss level for yourself. Using them, you can dictate the price at which you want to buy or sell a cryptocurrency.

2. Volume

Volume is another important factor that traders can study. The level of trading volume determines the amount of activity happening around a particular cryptocurrency.

For instance, the higher the trading volume, the more people are buying and selling that cryptocurrency, which makes it easier to convert crypto into cash. It is also a good estimate of a cryptocurrency’s popularity. Ideally, traders should trade in cryptocurrencies with high trading volumes. 

How does volume influence price movements? Generally, higher buy volume (Demand) indicates an upward trend and vice versa. 

3. Current Affairs

Crypto is very sensitive to the discussions happening around it. Any news, positive or negative, can influence its short term prices in the Crypto market.

To forecast trends, traders must closely follow the activities of the cryptocurrency they are trading in on all channels. They must look for their social media actions, follow their founders and watch out for what is being said about that coin. 

For instance, if a founder of a cryptocurrency project puts up a positive update on Twitter or any other social media platform, the price of that crypto is likely to reflect that and go up.

Best Day Trading Cryptocurrencies 

Here’s a look at five of the most popular cryptocurrencies for day trading:

top 5 day trading cryptocurrencies

1. Ethereum (ETH)

Ethereum enjoys heavy trading volumes because it’s the second-largest cryptocurrency by market cap. Thousands of people buy and sell Ethereum every day. 

Though it is highly volatile, the degree of volatility depends on multiple factors like the market conditions, current affairs etc.

Talking about current affairs, if you are trading in Ethereum, make sure you follow all the news around it. Lately, it’s been on everybody’s mind because Eth 2.0 will soon roll out entirely. Eth 2.0 is basically an Ethereum upgrade that is phased out in three phases. Once launched, it will reduce the transaction cost and improve the efficiency of the existing ethereum network.

2. Tron (TRX)

Tron is the fastest-growing blockchain and generates quite a lot of trading volume. It is not highly volatile, but as with all cryptocurrencies, you never know how intense its next price variation can be. 

You can get an idea of its short-term price movements through all the news floating around it on the internet. Tron’s founder Justin Sun is pretty active and vocal on Twitter and often tweets about the project.

3. Binance Coin (BNB)

This cryptocurrency is backed by one of the largest crypto exchanges around – Binance. It is the fourth largest coin on the market and generates significant trading volume. 

In terms of volatility, it is usually more volatile than the above two cryptocurrencies, but again,  nobody can tell for sure.  To trade BNB successfully, ensure you pay attention to the news about the cryptocurrency exchange it is associated with, the recent news about the cryptocurrency, etc.

4. EOS.io (EOS)

EOS.io might not be as popular as other cryptocurrencies on the list, but it has considerable trading volumes. 

It is highly volatile. EOS.io recently rallied upto 100% in a day after the network proposed to increased the staking rewards, according to Coindesk. So make sure you follow all the news around the cryptocurrency to capitalise on such opportunities.

5. Tether (USDT)

Tether is a stablecoin pegged to the U.S dollar. Its value is always as close to the U.S dollar as possible. Though not ideal for making money, USDT can be of good use to traders. 

Traders play with volatility a lot and tend to pay a lot in intraday trading charges (fees). 

Stablecoins are a great way for them to add some stability to their portfolio. They can instantly realise their gains in trades without cashing out by just converting their holdings to USDT. It saves them a significant amount of money in intraday trading charges.

Want to buy Tether directly in India? Check out the CoinSwitch website!

How to Day Trade Cryptocurrency?

With a fair idea of what is day trading in cryptocurrency, it’s time to make that trade happen!

How to day trade cryptocurrency in 3 simple steps:

  • Download CoinSwitch Kuber from Play Store/App Store and finish your KYC in five minutes. You only need your Aadhar card, PAN card and a photo of yourself
  • Deposit money to your CoinSwitch Kuber account and buy from a list of 80+ cryptocurrencies
  • Watch the markets and wait for the right opportunity to sell for a profit.

If you are a beginner, read our blog on cryptocurrency trading tips to make the most of your trades.

FAQs

1. Can you make money day trading crypto?

The whole point of day trading is to make money fast, so yes, ideally, you should be making money by day trading cryptocurrency. However, you may also lose money if you don’t know how to do it right.

2. Which cryptocurrency is good for day trading?

It depends on multiple factors; if you are a high risk-taker, you may want to test yourself with volatile cryptocurrencies rather than comparatively less volatile cryptos. The trading volume and current talks around it also help in determining a good day trading cryptocurrency.

3. How much money can you make day trading crypto?

There’s no cap on the money you can make with day trading. At the same time, you need to risk big capital to make big gains.

4. What is the best low-cost cryptocurrency to buy?

There are several low-cost yet good cryptocurrencies one can invest in. Check out our list of the cheapest cryptocurrencies to know about them.

P.S: KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing.

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

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CoinSwitch Kuber

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