Day Trading Crypto: Part 1

By Chad King

Yo, what’s up, crypto fam? Chad here. If you’ve been hanging around the crypto scene long enough, you’ve probably heard of day trading. And if you haven’t, well, welcome to your crash course on how to hustle like a true digital nomad, trading Bitcoin and wildcards like Dogecoin.

Now, before we dive in, let’s set the scene. Imagine you’re chilling on a Bali beach, sipping your coconut, and you get a notification: Elon Musk just tweeted about Dogecoin again. Suddenly, Doge is mooning, and you’re either cashing in or missing out big time. This, my friends, is the essence of day trading — quick buys, quick sells, and hopefully, quick gains. Let’s get into it.

What is Day Trading?

In simple terms, day trading is buying and selling assets within a single day. The goal? Profit from small price movements. We’re talking about the kind of volatility that makes Bitcoin and Dogecoin perfect candidates. Why? Because crypto markets never sleep, and neither do the opportunities to make (or lose) money.

Why Trade Bitcoin and Doge?

Bitcoin is the OG — it’s like the blue-chip stock of crypto. It’s relatively stable (in crypto terms) but still gives you enough swings to make a profit if you time it right. Dogecoin, on the other hand, is the wild west of crypto. It’s a meme coin, pumped by tweets and jokes, mainly by one man: Elon Musk.

Elon Musk and the D.O.G.E. Department

Quick detour: did you catch that recent Elon Musk meme about the “Department of Government Efficiency” (D.O.G.E.)? This guy knows how to play the market, dropping memes that send Dogecoin into a frenzy. Now, that Trump got re-elected as the CEO of the United States, the Dogecoin price went volatile once again. To moon and beyond? There’s a good chance.

Technical Indicators: Your New Best Friends

Alright, let’s get technical. If you want to day trade, you need to understand technical indicators. These are tools that help you make sense of price charts and make informed decisions. Here are the basics:

1. Moving Averages (MA)

Think of Moving Averages as the “average” price of a coin over a set period. It helps you see the overall trend without getting distracted by minor price fluctuations.

  • Example: You’re looking at Bitcoin’s 50-day MA and notice it’s trending upwards, crossing above the 200-day MA. This is called a “Golden Cross” — a classic signal that Bitcoin could be in a bullish trend. So, you decide to buy some Bitcoin and ride the wave up.

2. Relative Strength Index (RSI)

The RSI is like a mood ring for the market. It tells you if a coin is overbought (too hyped) or oversold (everyone’s panic selling).

  • Example: Dogecoin’s RSI suddenly hits 80 after Elon tweets a meme. An RSI above 70 means it’s overbought, suggesting the price might drop soon. So, you might consider selling some Doge before the inevitable pullback.

3. Bollinger Bands

Bollinger Bands measure a coin’s volatility. The wider the bands, the more volatile the market. When prices touch or go beyond the bands, it usually signals a reversal.

  • Example: You notice Bitcoin’s price breaking above the upper Bollinger Band. This could indicate the price is overextended and might dip soon. You decide to sell a portion of your Bitcoin holdings, locking in profits before a potential correction.

A Quick Trade Example: Doge Pump and Dump

Let’s say you’re glued to X (formerly Twitter), and Elon Musk just tweeted, “DOGE is life.” Within seconds, Dogecoin’s price starts spiking. You check the RSI, and it’s climbing fast. You decide to buy in, but you set a tight stop-loss (a safety net in case the price drops suddenly).

As the price surges, you keep an eye on the RSI. It hits 85 — overbought territory. You sell a portion of your holdings, making a tidy profit before the inevitable correction as the hype dies down. That’s a classic day trade play using RSI and a bit of social media hype.

Risk and Reward: The Name of the Game

Look, day trading is not for the faint of heart. The same volatility that offers quick profits can also lead to quick losses. It’s crucial to have a strategy and stick to it. Don’t let FOMO (Fear Of Missing Out) make your decisions. Use your technical indicators, set stop-losses, and never trade with money you can’t afford to lose.

Final Thoughts

Day trading is like surfing — you have to read the waves (the market) and know when to ride and when to bail. With Bitcoin, you’re surfing some of the biggest, most reliable waves. With Dogecoin, it’s like riding a tsunami created by Musk himself.

So, if you’re ready to dive into the world of day trading, start small, learn your indicators, and always stay on top of the latest market movers (hint: follow Elon’s tweets).

Catch you in the next article, where we’ll dive deeper into trading strategies that have helped me make gains from the beaches of Bali to the cafés of Prague. Until then, happy trading!