The cryptocurrency-industry is becoming a roller-coaster for investors because of the highly volatile nature of cryptocurrencies. This volatility is the main factor for your success if you want to make $100 a day with cryptocurrency. The strategy that you need to pick is day trading cryptocurrencies for this purpose
Day trading cryptocurrencies means buying and selling a cryptocurrency within a day to earn profits.
First, you need to understand that it is necessary to have an organized approach and strategy when day trading cryptocurrencies. This strategy will help you to protect your balance later on. The high volatility of cryptocurrencies will allow you enough up and down swings in prices to make a high return. The goal of crypto day trading is to find opportunities that can earn you high profits. Following are the steps that you need to consider to make $100 a day with cryptocurrency:
- Prudent Investment:
First, you need to buy cryptocurrencies that have high volatility and liquidity. Hence you can choose either bitcoin or altcoins and buy them according to your investment. Try to avoid day trading smaller cryptocurrencies because there may be higher risks of loss.
- Money flow index indicator:
The money flow index is a technical indicator used to track the activity of money betting. Applying this indicator on a 5-minute chart will notify you when the institutions are buying and selling cryptocurrencies.
If the reading on the chart reaches 100 MFI, it means that big sharks are entering the cryptocurrency market. It is the right time to buy coins. It would be a good idea to test the first 2 MFI readings to fine-tune our day trading strategy.
- Stop loss:
You can place your stop loss below the low of the day to limit your loss. You will need to get out of the trade if the MFI reading breaks below that stop loss. It is to recommend to take profits in the first 60 minutes after triggering your trades. If the time exceeds 1 hour, it may lower your success rate.
- Offer leverage:
While day trading, you need to decide the leverage that you are going to offer because the profit margin per coin is usually small. Let’s imagine there is a highly volatile coin that you chose, priced at $50 per coin. The price of that coin fluctuates from $50 to $55 per coin in a day. And if you have $1000 for investment, then you can buy 20 coins for $1000 while day trading.
- Profit gain:
If the price fluctuates the same as interpreted, then you’ll get $100 for selling those 20 coins. But if the price movement is even lower than $5, for example, the price fluctuated $50 to $52 per coin. Then you can even repeat the trade several times a day.It is how you can make $100 a day with cryptocurrencies. Aside from all these possibilities, keep in mind that the risk to face losses still exists.