Top 3 Best Crypto Day Trading Strategies (Beginner to Expert)

Best crypto day trading strategies (how to day trade crypto)
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TIMESTAMPS:
0:00 Crypto day trading strategy
0:16 Trading setup
1:50 Long position strategy
5:39 Drawdowns
6:52 Entries
8:21 Stop loss
10:29 Position size
13:16 Using leverage
14:18 Position entry
16:31 Delta neutral strategy
23:21 DeFi
26:43 BTC & alt coins strategy

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In this video we’ll look at three professional crypto trading strategies to take advantage of bull markets bare markets and sideways ranging markets we can use these different strategies to take advantage of all of these different conditions I’ll leave time stamps for the three strategies down in the

Description firstly we need to get our trading system set up for the way we want to trade I’ll be trading in the Futures Market on okx so trade Futures and I’ll be showing you Bitcoin against US dollar tether which is a stable coin so crypto versus the dollar if you don’t

Have okx I’ll leave a link below you can get a deposit bonus up to 60k so if you trade on another system essentially make a deposit that’ll give you that big bonus that you can trade with so uh you can see the details via the link in the

Description if it’s available for you but I’m going to go to settings and then from here account mode now with crypto Futures we simply use collateral in our account to fund our positions and that collateral is used to fund any potential losses so there’s two different ways to

Margin our positions first is single currency and so this is really just putting stable coins on the account to fund your positions this is what most people do uh the other way is to use multicurrency when you can actually use you know Bitcoin and eth and stable coins together as collateral to fund

Your positions and the dollar value of those will be used as you know your margin where you can actually fund your positions this can be slightly more risky because crypto collateral changes in value and so the amount in US dollar prices that you have to fund your

Positions can change so it is more risky however some strategies call for this and you can reduce Risk by using this as well so these are the two different types of account for the first strategy we’re going to use a s single currency margin right here and then we can enter

Our positions so the first strategy we’re going to look at is taking long positions in Bull markets or in the recovery that crypto has out of bare markets into two bull markets that’s obviously when we want to be going long but of course we have our investments

But this is a day trading and strategy video and so we’re more active here so how can we try and get good entries you know to obviously make extra Returns on top of our Investment Portfolio so the first thing we need to look at is what

Market phase are we in and then when to enter so what we can do here is look at the stages of a you know a Bitcoin cycle so this is on trading view trading view is free I highly recommend it and you can make charts like this as well

Essentially what I have here is the Bitcoin chart against USD and then in the bottom right hand corner you want to switch this to a logarithmic chart so the regular chart is the price chart as you can see here which is great however the logarithmic chart is really what we

What we want because that now we can see bitcoin’s cycles and so what we have here with these blue lines are each of the Haring and there are three distinct cycles for Bitcoin within a 4-year period and so we have this phase here usually into and after the Haring which

Is a big bull market so that is where the Bitcoin price Rises so we have one two and it looks like we’re going into another one here so three right so after the Hing you get this big move to the upside now at some point that tops out

And you get a you know a bare market right where prices come down so when that tops out you get this bare Market where prices come down you can very clearly see that happens right in these three occasions and so that is a destruction phase in a bare Market of

Course you don’t want to be taking long positions there now after that bare Market before the bull market right that’s the yellow phase here you get these recoveries and you can see that they’re volatile but they’re very clear in that you know these aren’t bare markets anymore you get these moves to the

Upside some volatility down but generally it’s a move to the upside so the three stages of a Bitcoin cycle are bull market bare market and Recovery bull market bare market and Recovery now that we know those cycles and each of them takes around 12 to 18 months to play out these are month

Charts here so very long term but these are 12 to 18 months in their phases and they’re very distinct now it’s not just the Bitcoin harving doing this it’s also the macroeconomic cycle and interest rates and Central Bank Cycles so they push and prod the Bitcoin price around

But they’re very clear in their 12 to 18 month phases and so now that we know that we can then use those phases to our advantage when do you want to be taking long positions in BTC in my opinion as we are coming out of the recovery into

The bull market is when you want to be taking long positions so this is a timing thing where we definitely don’t want to take long positions when we’re at the top of bull markets because the risk reward is not there right the next phase is for a downward move we want to

Be investing long when we’re getting that next phase as an upward move or expansion given that we assume that Bitcoin Contin continues to expand which that has to be a fundamental assumption here um so we get that recovery so within this phase that’s when we want to

Take long positions from here now we need to time our entries better because Bitcoin even within bull markets has big draw Downs in its price from its range highs right so you get a Range High where Bitcoin expands then you meet a bit of resistance and you get maybe a

You know the market cooling off for a bit and you get this kind kind of draw down within a bull market and so as long as we know that they happen and also the extent to which they happen we can much more easily time entries these are each

Of the previous bull markets for Bitcoin and we can see this is around a 20 or 30% draw down is pretty likely within bull markets so you get these here now this was the pandemic in green which is a little bit of an outl in blue you can

See there were regular 30% draw Downs right and then in this ball market we’ve had regular 20% draw Downs so if we think that a draw down in a bull market for Bitcoin is 20 to 30% that’s going to give us much better entries to take our long positions now

We can go back to our trading chart and actually wait for these to play out when you’re trading shorter term you you have to wait for the opportunity and be a bit more tactical now sure on the investment side we’re still just investing and dollar cost averaging but if you’re

Trying to play these mini cycles within a bull market you have to be tactical here so we can see these playing out this is the current phase where you can see generally the price is rising but within this and I’m on the day chart here we can see regular 20% draw Downs

So we have one here that was a 25% dra draw down from a local top we have another you know rise to the upside and from here the draw down was around 20% we have another local top here and the draw down was around

23% and then we come all the way up to this price which was a local high or the high for this cycle and the draw down was quick and it was around 20% and we’ve recovered again this price action is clearly bullish price action within a

Bull market that is very clear but there have been multiple opportunities where you can get in and take positions on draw Downs so we can enter those positions and go long as long as we manage our position properly for a bit more downside we can essentially play this bull market

Because we know that Bitcoin draws down around 20 to 30% during these bull markets we can enter our positions around this and manage our risk so the first thing we can do when Bitcoin does have a draw down from a local top so the price goes to a local high then draws

Down a little bit we can make decisions for example when the price is 15% below that local high maybe we enter a position and then we can also look to enter other positions if we are consolidating around this area or maybe dropping down lower so you enter a first

Position at maybe a 15% draw down and as you get to to 20 maybe you enter another position right and then if you can maybe think we can draw down 25% then you can enter another amount so you don’t have to go into your position all at once now

The important thing here when you make your entries whether you go all in at once or whether you try and space out two or three different trades to get a decent average price the important thing is where is our stop loss because we’re day trading we need a stop loss if we’re

Wrong so where do we place that stop loss we place the stop loss at an area where we think the trade is basically wrong we’re not actually buying a draw down it looks to be a reversal and it’s actually coming lower so if that is the

Case we need to get out so for me personally if you have reached a local high and then the price draws down let’s say 30% that’s a pretty big draw down right and so maybe something is up here so I would say that my stop loss would be

Around there so what I’m going to do is just draw that on the system around here and say that would be my stop loss so if I’m getting into positions around this price then if it comes and draws down this is where we actually sell a loss to

Make sure that you know things aren’t collapsing further so now that we have this price as our stop loss we can work out how much we can trade and how much risk that we want to take from here we can calculate exactly how much risk that

We want to take in this trade so we can use a position siiz calculator very easily so let’s say we want to go in on this dip right here and so this draw down we would trade around the 42,300 level so you can go to a position

Siiz calculator I’ll leave this one link below but there are many online we’re trading Bitcoin the open price for our trade would be 42,300 and our stop loss is this right here at 32,300 so you can put that as your stop loss if you have 10,000 in your day

Trading account you want to risk 1 to 5% of your account in a trade and so we’ll just put two here we calculate that we know that this is the size of the trade that we can go into so in a worst case scenario we lose 2% of our trading

Account which is this much right here but we are trading a unit size of Bitcoin of 0.02 so now we know how much size we can trade with how much leverage do you want to use well you don’t have to use any leverage if you’re trading in

The spot Market no leverage at all if you’re trading in the Futures Market you can take leverage without taking more risk the reason being we know that our stop loss from this price here right which was 42300 we know that if the price draws down to this level we’d be making a 23%

Loss so it doesn’t matter how much leverage that we use as as long as our liquidation price is away from our stop loss we’re fine if we’re using way too much leverage like 20 times leverage your potential liquidation because you’re using so much leverage and you’re borrowing so much from the platform your

Potential liquidation goes up here and it’s within or higher than your stop loss that’s way too much leverage if our stop loss is 20% away we know that we can take two three times leverage no problem because if you’re taking three times leverage you’re putting $1,000 in you might want to trade with

$3,000 well a 30% move to the downside wipes out your uh ,000 that you put in so we need to use maybe 2x leverage and that’s absolutely fine for us so I’m going to go to isolated margin here which is this position is isolated I’m going to use dollars to fund this

Position and it’s isolated to this position I’m going to go to my leverage here I’m going to go to 2x that means that if I take this position I can draw down to my stop loss which is a 20 plus% draw down and I’m not getting liquidated until 50% so I’m

Cutting my losses before my liquidation so this Leverage is irrelevant to me you’ll notice that using leverage here isn’t increasing the amount of risk I’m taking in the trade because I know I’m risking 2% of my balance and the trade size is 0.02 BTC if you want to use

Leverage to just increase the size of your trades you can do that you’re just increasing the amount of Bitcoin that you’re trading and therefore the amount of risk that you’re trading is going higher in relation to what your portfolio balance is as well so it’s up to the individual Trader whether you

Want to take more Risk by actually increasing your trade size or whether you keep your trade size as it is and you’re just using leverage to put less down into the trade which means you have more assets to trade in different positions so that’s two ways you either

Increase Risk by putting more down and a larger trade size or you put less down keep the same size and have assets left to trade in other positions or to stake them if you’re using staking currencies and so on so it’s up to the individual Trader from here though we can enter a

Position and get our Market position open from here when entering the position we just put our stop-loss price in so we know exactly what our risk is when we enter the trade so as an example I’ll show you to open a long position just trade at Market just to get the

Position open and then down here take profit stop- loss you can put your stop- loss price in here so whatever you’ve work that out at I’ll put 42,000 which is away from the price that we open this trade at and then down here you can open

That long so long confirm and then we have our open position here with our stop loss so you can see the details here we can also see the amount of margin that we have so if you want to add margin this to this position you can

Just add margin in here right so if you have dollars left over you can add margin what that does is moves away your liquidation price because what you’re doing by adding margin is reducing leverage so you can add margin to reduce leverage or you can take margin out to

Increase leverage that changes your liquidation price your liquidation price should always be outside or away from your stop- loss your stop loss should always be stopping your trade out at a loss before you get liquidated on the system we can see how entry price and our stop- loss price right here that we

Can trade at if you want to add in or change your stop- loss price or even add in a takeprofit order you can do that it’s just down here so add and then you can see our orders right so from here we actually have a stop which is right here

42,000 which is our stop- loss so we can edit that we can move it closer or further away however we want or we can obviously get rid of it as well and if you want your take profit you just add that in here which on a long position

Would be above the price so now what we have is our position which hopefully is around a 15 to 20% draw down from the local top and that’s our position and our stop- loss price now of course that can be a third of a position or a

Quarter of a position and if the price goes down a little bit lower maybe you want to add to that and get you know a dollar cost average price around a draw down and make sure that we have plenty of room in the trade for it to go a bit

Lower and then in a bull mark Market hopefully that reversal take place for another move to the upside the next strategy is more of an arbitrage strategy where we’re trying to take advantage of the different yields that we can get across defi or across investing in assets that pay us a yield

Like ethereum so ethereum pays a real yield around 3 and a half% and so what we can actually do with Futures is to take a synthetic position in the underlying asset which is ethereum we can can earn the yield from our long position but we can also take a short

Position in the Futures Market which Hedges out our exposure to the asset so what we want to do this is known as a cash and carry trade or funding Arbitrage trade is to take both a long and a short position right so when you take a long

Position of a th000 and a short position of a th000 so you’re buying long and selling short $11,000 and so your net position should be delta neutral your longer $1,000 and your short $1,000 so if the price moves up or down either one of your positions wins or loses by the

Exact same amount and so doing that we create a delta neutral position or a position that doesn’t have a lot of price exposure risk however in our long position we are potentially getting a yield from the asset that we’re holding or we can use that across defi to

Actually put it into some other defy protocols that may be paying a yield through different ways what do they do well you can earn money through uh putting the eth in liquidity pools where you’re earning trading fees from other Traders or incentives from the protocols that want to incentivize

Volume in those protocols so what we’re doing is we’re taking a delta neutral position we’re trying to hedge out our price exposure to the asset but we are going on the long side looking to earn yield from our long in that ass asset so how to do this well of course you need

To go long the uh an amount of the asset right so you’re buying in the spot Market you’re buying spot ethereum and you buy $1,000 and of course we need to take that synthetic short position as well so you need to go short $1,000 but with uh crypto Futures we can

Maybe take leverage as well so maybe we only have to put $500 down into the trade take 2x 2x leverage to give us our $1,000 synthetic short position in eth that means we can put more money aside into the long position right so you can balance this out to make sure that

They’re even so we take that delta neutral position so the first thing is go and buy the amount of eth in the spot market and have that position from there we just have to use dollars to short ethereum so let’s say we want to take you know $1,000 short

Position to hedge out we would maybe take leverage now if you’re doing this in a bull market you know ethereum can go up in value if you’re using dollars to short let’s say you’re using 2x leverage 50% move to the upside can actually liquidate your position and so

You have to be sure to manage your leverage properly so if you don’t want that happening and you think you’re in a bull market which you might be in maybe using no leverage right so just putting the cash down to settle is fine if you’re in a sideways ranging Market or

If you’re doing this for maybe a month and you think well you know ethereum maybe won’t go up 50% this month then you can use that leverage as you wish right that that’s down to the individual Trader and the conditions at the time but as an example use an amount of

Leverage either none or some and then you want to take a short position and make sure that you are you know shorting the amount so you can actually just do this in the crypto so we can have you know an amount of eth right so we can

Have you know one eth or something like that so you know your long one e and your short one e and if you’re using leverage then you just put less down right you can see the cost of this because I’m using 2x leverage I’m taking

A short position in eth which is one eth which is worth 2,600 but it’s only costing me 1,300 cuz I’m using 2x leverage so that means I have more dollars to put down in the long e eth side in the spot market so we can work

This out of course but if you’re using 2x leverage that means if we go up 50% then we’re getting close to our liquidation so you just have to be sure of that but what we’re doing is taking a short position of an amount of eth 1 E

And A Long position of 1 e and so we have that long position so what can we do with that long position well you either just buy staked eth long because staked e St eth or the other uh liquid staking tokens of eth they’re paying uh ethereum’s staking yield which is around

3.5% right now so if just by holding that long position you’re earning 3.5% annually for that POS for that long position but of course we’re delta neutral so we don’t have any price exposure this isn’t great in a bull market because in a bull market you just

Want to be long the asset right it might go up 200% over an 18mon period or more more so in a sideways ranging Market or if you just don’t want any price exposure this would be a better strategy so we’re earning that as long as we buy

Eth the stake teeth version on okx you can buy ST eth which is stake teeth which earns the staking rewards now from here we have a short position in the Futures Market as well and usually short positions actually get paid a funding rate as well you can see that right here

This is the funding rate so the funding rate is something that is either paid to or paid by uh your open positions if the funding rate is positive that means that long positions are paying money to short positions so if you’re short you’re actually receiving this funding as well

And the yield that you’re getting in this position is going up a risk is that if you are short and this funding rate is negative you have to pay this out and so this is reducing the yields that you’re getting from this position funding is something that happens in

Crypto Futures uh to try and keep the market in line and try to balance supply and demand and so you just have to check this out right now the funding is positive which means our short position is actually gaining uh more in yield for that short position being open which is

Great for this delta neutral strategy however because we’re in a bull market right you don’t want to be delta neutral here you just want to be long in a bull market the yields for ethereum are quite low however 3 and 1 half% but of course with ethereum and crypto assets defi

Exists where yields are higher now of course you take extra risk here using the token within defi which of course carries its own risks but as an example to show you this is a protocol for trading yield and on ethereum right now you have um lots of liquid staking

Tokens and actually liquid reaking tokens which are trading right now which are ethereum so they’re the price of ethereum but they have an expected yeld yield that’s happening so as of making this video right now there’s um an expected airdrop happening and so people are actually buying the yield off of you

And paying you for that yield and the uh the yield that acuits to that token over a certain period of time so as an example here we’ll choose e and what this is is an an ethereum liquid staking token so it’s ethereum paying you the yield but this is also

Stake within another protocol which uh Market participants believe is going to give an airdrop now airdrop the airdrop tokens and and points will ACR to the people that hold this position over a certain period of time so what’s happening is that people that are owning eth are selling the rights to the

Airdrop to people that are paying them for those rights and this is working out at an apy of 28% this is 134 days so this is an expiry of 27th of June 2024 as making this video what this shows is that we can have an eth position and over this time period we

Can sell our yield and they’re going to pay us a fixed rate of 28.432177 size is the position time is only 134 days but in any case we are selling and fixing a yield let’s call it 10% over the next 134 days that’s a fixed yield that we’re getting and we know we’re

Getting that yield so you can take a uh long position in eth for that you can then go back and hedge out your exposure in the Futures Market by taking a short position of the same amount we now know that over the next 134 days we’re making

10 to 12% yield because we have a fixed income we’ve sold that yield and we’re delta neutral hit so that’s just one example that’s happening now there are many ways to earn yield from defi but that is a way to earn obviously pretty decent yields in an asset where you

Hedge out your price exposure or just reduce your price price exposure right and so there are ways to play it but you’re hedging price exposure and getting yield either from the underlying or from defy or anything else and this may be good in sideways ranging markets

Where you don’t think the price is going to move that much or if you just think the yield is good but you don’t want to just you know take big long positions in crypto assets uh crypto assets which are volatile the next strategy we’ll look at

Is one we can Implement in a bare market now there are many ways to play bare markets you can just go short the assets if you think the prices are going to fall just take short positions use dollars to fund and short all assets in crypto now this is risky this is the

Most risky way to trade just taking positions on prices and so Traders always try to reduce risks to try and give themselves the best risk reward ratios for certain trades so what we’re going to look at is not just prices falling but we’ll look at these cycles

Of crypto and how they play out to give ourselves a much better risk reward for the trades that we want Implement these are crypto cycles that happen and it seems like there are two distinct phases within a bull market and then you have a bare market so this is from panta

Capital and what it shows is that in the first phase of a bull market what happens is that Bitcoin outperforms and leads with its price Rises you can see that here the white line Bitcoin is rising in its price however if in yellow this is altcoin market share which seems to be

Going sideways during this time so Bitcoin is outperforming altcoins may actually be going up too but Bitcoin is outperforming them it’s going up more than that during the second phase of a bull market that’s when altcoins seem to have this kind of blowoff top where they massively outperform BTC so BTC is still

Going up in value but altcoins are going up much faster this has played out over various Cycles so altcoin underperformance altcoin outperformance in phase two even though Bitcoin is still going up in value then we have a bare Market Bitcoin comes down in price but altcoins come

Down in price faster so altcoins are more volatile they outperform in the late stage of a bull market and they underperform in the bare market and they underperform in the recovery and the phase one of a bull market so you can see here Bitcoin is moving sideways to

Up altcoin market share is falling and sideways underperformance you get outperformance in the late stage bull market and as the bare Market happens altcoins come down in relation to bitcoin so Bitcoin is coming down but altcoins are coming down faster and during the recovery Bitcoin is now sideways to up altcoin market share

Continues to Dro down in a bare market and the recovery phase altcoins underperform Bitcoin this is a much uh more certain trade than just going short assets because we know in bare markets you get these big rallies to the upside right which can wreck all all of your

Positions but if we can trade Bitcoin the value of Bitcoin versus altcoins it gives us a much better risk reward to try and trade during bare markets so what we’re going to do is take Bitcoin and the value of Bitcoin and use it to short

Altcoins so what we can do is use it as collateral so we can go over to the settings go to account mode and you want to use multicurrency margin here and switch to that and that means you can use Bitcoin and ethereum or really just Bitcoin for this example so you have

Bitcoin and you’re going to be using the value of that to take short positions in a bunch of altcoins the reason is Bitcoin may be coming down in value during the bare Market uh but altcoins are going to fall faster and so the short positions that

You make are actually going to be making you money uh even though your Bitcoin is coming down in value why wouldn’t you just sell Bitcoin here well Bitcoin is an asset you don’t really want to sell it right you can use it to take positions but you don’t sell your assets you don’t

Just say sell it all here and I’ll try and buy it back right you want to keep your asset and you want to try and play better risk reward trades if you’re trying to actively earn a bit round your portfolio so yeah you can sell all your

BTC but you don’t really sell assets we want to use some of our assets to try and earn uh you know extra from Trading the market so what we can do here is go and make sure that we’re in the uh multicurrency and that we have Bitcoin

In our account so you can come down here and press transfer and have Bitcoin in your trading account to fund the positions now from here what we can do is choose some um you know altcoins that we want to take short positions in so you know some some altcoins that have

Really outperformed in the bull market are starting to come down you know they were too hyped up got too high and they’re obviously going to come down projects that are much newer right and so those typically underperform in bare markets so you know something like Dogecoin or a lot of these uh coins

We’ll just uh you know take one as an example right so salana you can trade that right and it’s had a very good bull market as you can see but during bare markets you know this this is what happens and so we can actually trade a

Few of these so we can trade maybe salana or xrp or optimism or you know RVE or you know ax right A lot of these altcoins usually apoin right the these are bull market coins and they’re going they’re most likely going to underperform BTC in a bare market so you

Can take one or you can just have like multiple short positions with like three or four coins where you are short these with BTC as collateral and so that is a a a kind of PE trade between what we know is in a bare Market altcoins tend

To underperform BTC so rather than just taking short positions we are using BTC collateral because we don’t want to trade out of it to take uh you know short positions in those altcoins and we have a bare market and a phase one to be correct in that is probably almost two

Years or more of that trade where it usually works out and so as a risk reward that’s something that we can Implement so as we have BTC collateral we can then use that to take short positions in the altcoins once we know full well that you know we are in a bare

Market and we’re going to be in it for a while I would not suggest actively trading with any more than 10% of your portfolio mostly just invest for the long term is the way to go I’ll leave the okx link down below if you want that and some other helpful videos I’m James

With man zg chers for watching and I’ll see you in the next one