Best Crypto Brokers and Platforms for Day Trading
Crypto day trading is an exciting way to make money from market fluctuations. But since it’s also a very volatile market, it takes knowledge and skill to profit from it. Here, we’ll detail everything you need to know to get started- beginning with looking at what is the best broker for day trading, and what is the best crypto platform for day trading.
If you are looking to get involved in this new asset class and the opportunity it presents for day trading, please read on.
Best Crypto Brokers for Day Trading in 2023
Best Day Trading Crypto Platforms Reviewed
FXGT Broker, a standout in the realm of crypto social trading, provides an innovative and dynamic platform for both novice and seasoned traders. FXGT Broker offers an exceptional sentiment analysis tool, giving traders valuable insights into market trends and investor attitudes.
Additionally, FXGT Broker integrates seamlessly with popular trading forums, allowing users to connect with a community of over 20 million traders.
The platform’s 24/7 trading capability and diverse market access further enhance its appeal, making FXGT Broker a top choice among the best crypto social trading platforms.
One of the best crypto day trading platforms around, Eightcap is an Australian global forex broker that’s been in business since 2009. It runs two subsidiaries, the Australian Securities, and Investments Commission (ASIC), and the Vanuatu Financial Services Commission (VFSC).
Eightcap provides over 250 crypto CFDs, both the MT4 and MT5 platforms, and a commission-based trading account. Commissions and fees depend on the account type, raw or standard spread-only. The platform also offers deep liquidity, NDD trade execution, and full execution transparency. Its newest feature, Capitalise.ai, allows code-free strategy automation.
Established recently in 2021, Banxso is regarded as one of the best crypto day trading platforms, especially for Millennials and Gen Z. Available in 170 Countries. It is headquartered in South Africa and is regulated by the Financial Sector Conduct Authority.
It facilitates trading across 8,000 different assets, including stocks, indices, commodities, and cryptocurrencies. There is a wide variety of educational material available on the platform, from one-on-one coaching to live webinars. However, today, it exclusively serves traders resident in South Africa.
AvaTrade, one of the oldest and most respected online brokers, is a leading global forex and CFD broker that has been around since 2006. It has 4 offices (Japan, Australia, Ireland, and the British Virgin Islands) and is regulated by several financial authorities, including the Central Bank of Ireland, making it one of the best crypto day trading platforms.
Account opening is quick and there are free deposit and withdrawal options. Sharptrader, a powerful educational tool, is one of its most distinguishing features.
However, its portfolio is limited comparatively to forex, various CFDs (for stocks, indices, commodities, etc.), and cryptos. AvaTrade provides traders with a commission-free pricing environment, explaining its spreads.
FP Markets is an Australian multi-asset broker regulated by some of the world’s top financial authorities, including ASIC, CySEC and the Financial Services Authority of St. Vincent and the Grenadines. With over 15 years operating under its belt, serving over 80 countries, it is undoubtedly one of the best crypto day trading platforms.
CFDs (indices, stocks, and metals) as well as forex and cryptocurrencies are all available. When using the MetaTrader trading platform, this broker offers competitive pricing for forex and CFD trades.
Additionally, you can easily open an account at FP Markets with just a $100 initial deposit.
What is Day Trading in Crypto?
The cryptocurrency market is notoriously volatile- and that’s why it is particularly lucrative for day traders. The purpose of crypto day trading, also known as “intraday trading,” is to capitalize on modest price fluctuations by entering and exiting a position in the market on the same trading day often multiple times. To put this in perspective, a 10% increase in value within a single day is extremely unusual for a traditional stock but is commonplace in the crypto world.
To succeed, traders will need to have a solid grasp of fundamental and technical analysis. Most will use indicators such as price action, volume, and chart patterns to decide when to enter and exit a trade. The value of a digital asset might also be significantly affected by any major developments concerning its creators.
As the cryptocurrency market is still in its early stages and relatively small, it offers a steady stream of fresh new coins and opportunities for traders. The main advantage of using the brokers listed above is the ability to go long and short on cryptocurrency instruments as opposed to buying the physical asset only via an exchange.
Crypto Day Trading Rules
Successful crypto day trading means following a set of rules called a day trading strategy. Here are some of the most common strategies day traders deploy:
This capitalizes on quick, small price fluctuations like liquidity holes, the bid-ask spread, and other market inefficiencies. To maximize their gains, scalpers often use leverage in the form of margin trading or futures contracts.
Also known as countertrend trading, this is a risky strategy that involves going against the market’s general direction with the assumption that the market price will quickly return to its earlier level following a temporary surge. Timing is crucial.
This entails searching for price ranges inside the market structure and developing trade ideas based on such ranges. Traders must keep watch of which and when cryptocurrency is oversold, buy it, and then sell at resistance periods.
Here, trades are executed algorithmically in milliseconds or less, with the help of a bot that analyzes the market and makes trading decisions in real time against a set of coded criteria. This strategy relies on a fast execution low rejection rate, low slippage, and tight spreads
This entails looking at past data (current market prices, volume activity, supply levels, and more) to forecast prices. It’s based on the idea that historical prices can provide clues about what to expect in the future.
What are the Best Cryptocurrencies for Day Trading?
Once you’ve decided on an appropriate trading platform and strategy, you can start building your trading portfolio. Some of the best cryptocurrencies for day trading include:
How to Select Cryptocurrencies for Day Trading?
There are a few key considerations when deciding which crypto to use for day trading.
A volatile asset means its price fluctuates quite a lot. While typically a disadvantage in more conventional markets, it is a favorable position for crypto day trading. A stable crypto would make it tough to turn a profit.
Cryptos with high liquidity and high trading volume allow easy purchasing and selling of the asset. Crypto with little trading volumes are high risk since there is potential for the inability to liquidate unwanted digital assets due to slippage and trade rejections
Although they play a smaller role in day trading than in long-term investing, recent market and industry events should not be ignored. The value of a cryptocurrency can be immediately affected by sudden developments around sentiment, for example news involving its developers or the industry players such as the well-known failures of FTX and Luna.
How to Start Day Trading Crypto
1. Select a Trading Platform & Broker
Consider how long it’s been around as a measure of stability and credibility, what cryptos it supports, and transaction fees. Other factors to consider are deposit methods and liquidity. Additionally, there may be compliance restrictions for certain users i.e., US-based traders can only use regulated crypto-trading platforms.
2. Pick Your Investments Wisely
The next step is to decide what crypto trades appeal to you. Invest time in research and keep yourself abreast of any new developments. Generally, market volatility, sentiment and sufficient liquidity provides opportunities for crypto day traders to profit.
3. Choose Your Trading Strategy
Crypto day traders can use a variety of strategies to capitalize on short-term price swings in cryptocurrencies, but success requires careful planning, research, and analysis before any deal is made. Make sure to plan out when you want to enter and exit a trade. Using risk management tools like stop-losses is essential.
Whether you’re an investor or an active trader, day trading crypto can be an exciting way to experience the crypto market in action and to profit from it. Whether it’s used as your main cryptocurrency trading strategy, or just a side gig to supplement your more long-term investment needs, there’s no denying that day trading crypto can be profitable if you find the right approach.
Ultimately, the best crypto day trading broker will depend on your needs as a trader. In any case, the shortlist above will help you get off to a great start.
- What is day trading?Day trading involves buying and selling assets within the same trading day to profit from short-term fluctuations in price.
- Is crypto day trading legal?Yes, it is legal in most countries, if you pay any taxes you will become liable for, according to the law.
- Is day trading worth it in crypto?Crypto day trading is a high-risk but potentially profitable approach due to the relatively high volatility in the asset class.
- How risky is crypto day trading?Due to the extraordinary volatility of the cryptocurrency markets, crypto day trading is high risk. but consequently, can be high reward too.
- Is crypto day trading profitable?Crypto day trading can be extremely profitable when done right – which means putting in the time and effort to implement strategies and do research.
- How much do crypto day traders make?Most crypto day traders lose money, but the ones that do it well can and do make exponential profits.
- How are day trading crypto taxes?Cryptocurrencies and other digital assets gains are taxable in most jurisdictions much like trading gains made from any other asset.
- How much money do you need to day trade with crypto?A few hundred dollars is all you need to get started trading cryptocurrencies. This depends on the broker you select and the minimum trade sizes they offer you to trade.
- Where can I day trade crypto for free?There is always a cost whether you trade cryptocurrency with a broker or exchange. Trading with a broker usually means you are trading a CFD instrument based on the underlying crypto price, unlike an exchange this means you can use leverage, go long and short and avoid costly gas fees and withdrawal costs.