Top 10 Altcoin Day Trading Tips You Need To Know

Altcoin day trading is a novel concept but something that’s hard to pull off as a beginner in these markets. These speculative markets are so dynamic that the veterans have a major advantage. You will find many pieces of advice, but few pointers will truly make a positive difference in your bottom line.

Take a look below for some sage advice from altcoin trading experts with more than seven years of experience. These altcoin trading tips will help grow your investment to the greatest amount possible.

You’ll find many of these recommendations to be fresh words of advice versus what you regularly find suggested on the web. Do yourself a favor and take the time to read this whole list of helpful altcoin trading tips.

#1 – Scalping Small Price Moves is Profitable

Leveraged trading gives you the chance to scalp small price moves for sizable gains. With 10x leverage, a 1% price move is suddenly a 10% balance fluctuation. The upside potential becomes much greater, but it comes with more risk.

Cryptocurrency trading strategy: Scalping. Profit examples.

As you can see from the chart above, every 1% makes for a 10% price movement. Your investment can double (or your position could liquidate) from a 10% price change. By setting your stops closer to the “mark price” your exchange uses, your risk is reasonably low. Meanwhile, you can ride the upside to a greater extent

Check out our ‘Scalping 30 Minute Trades – Day Trading Guide‘ to get some tips on how to make quick trades highly profitable. Some of the best crypto traders in the world make a living by playing the volatility and this guide will help you learn how to do the same.

#2 – Check TradingView for Signals

TradingView Clear logo

Many traders — from beginners to experts — trade cryptocurrency and mark their plays on charts via TradingView. This data can be shared with the world. Then you can search for essentially any altcoin and BTC trading pair and find data to chart. You will also see any public charts from other members, which will give you an idea of what others think will happen to the coin’s price.

You can look at how influential a charter is on TradingView by hovering over their username to check their subscriber count and reputation level. Each charted prediction shows on the TradingView website in an individual block. The blue text indicates the trading pair, the characters nearby dictate the time length of the chart used. If you’re trying to get better at calling price action, chart your predictions and compare with others to see things from a different perspective.

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Here’s a view of their cryptocurrencies section…

Cryptocurrency market on TradingView

This picture shows the performance by timeframe. You can see how much the coin is up or down in the past week, month, 3 months, 6 months, 1 year or Year To Date.

This data is available both in USD and BTC denominations, making it incredibly useful. You can quickly see which altcoins have the most room to grow if the altcoin market boom returns once the early to mid-2018 price lulls end.

#3 – Avoid Pump & Dump Signals

cryptocurrency pump and pump graphic

Everyone wants to find profitable trading signals as they happen. The problem is that bots are ahead of the game and the publicly-posted signals are mostly garbage. Poor pump signals are often published on Discord and Telegram groups, altcoin sub-Reddit sections and in crypto forums.

Basically, you don’t want to be caught buying a coin that everyone is shilling at the moment. You will find, for example, a particular alt or two getting crazy hype for a week or so on /r/ethtrader and /r/cryptocurrency sub-Reddit groups. The coin might seem like a great buy, poised to do 10-50x, but another “golden play” will be the buzz of the week next week.

The problem is the shot callers hold bags before they signal you to buy. These people are selling their holdings onto you when the signal is sent out or shortly after. The buy support for the coin fades away suddenly and many are left with depreciating coins that they don’t want to hold.

Almost never does a coin rise in price dramatically and sustain the large move. The one common scenario is when a long-term cup and handle pattern breaks to the upside.

For instance, prices held at 30-50% plus beyond the recent values for POA (POA Network) when its handle broke to the upside. You can see this valuable TAplay out on this TradingView user’s prediction…

 POA Cryptocurrency cup and handle graph

The cup and handle formed over a very long time frame. The handle either would mark a decisive move down or send the price upward to a new trading range. The latter happened in this case, as you can see from the upswing which occurred after the handle resistance broke…

POA Cryptocurrency broke upwards after cup and handle paettern

#4 – Don’t Trust People, Trust TA

US Dollar bill: in God we trust

Many technical analysts that post predictions have a hidden agenda. They might use their influence to push low market cap coins onto their followers. Typically, the influencer will only promote the entry opportunity to influencers after they obtain a position in the coin. The end result is getting dumped on right away or shortly later.

Some crypto trading experts with influence can offer quality advice. For example, there are a few day traders (like ‘Philakone’) that record and livestream their plays and position sizes. These experts can jump onto any chart and dissect everything in front of you without hesitation. Those that make live calls are more accountable and will be proven as a poor analyst quickly if they don’t create the results that are worthy of a follow.

Even so, watching day traders in action gives you a different perspective. This learning tactic introduces you to the reasoning behind a “chart reader” and brings context to the many candles and chart patterns you hear about all the time.

Back to our TradingView tip

You can find traders that make expert calls consistently and follow them. Look for the traders with massive subscriber counts to get reliable price predictions. Or, check below to see how to find some of the more influential analysts.

Get cryptocurrency trading tips from TradingView authors

Many top traders post chart predictions for Forex, commodities, etc. However, even the general analysts tend to cover cryptocurrencies (or, at least Bitcoin). Some users also include crypto terms in their name to distinguish themselves.

CryptoManiac101’ is an example of a terrific technical analyst, and someone who specifically publishes his calls on various cryptocurrency trading pairs. As of writing, he has nearly 1 million views, roughly 3,500 followers, and over 6,000 likes.

A large percentage of his trades go as forecast, but he also posts updates as action plays AND many members post their own charts matching or arguing his predictions in the comments. Tons of great TA perspective can be found by checking out published charts on TradingView!

Tip: Never be scared to look back at old calls. Check predictions from 2017 and see how (and why) that person was right or wrong. Look at the unexpected price direction changers, like massive short squeezes which prevented the price from making its “likely collapse” (everyone went short when China “banned” Bitcoin, giving more fuel for an upward wave after $3,000 support was found in September of last year.

#5 – Protect Your Investments

The 300 defence

Sounds silly but — protect your investments in every way imaginable. Do your due diligence before putting funds into any wallet, website, etc. Keep track of the latest developments in the crypto world as well. For instance, watch out for security concerns at any exchanges where you keep your funds.

Only leave money on an exchange if you’re actively trading with it. Otherwise, the funds should be kept in “cold storage” to keep them safe. That way, you won’t risk losing your funds if your account or the exchange get hacked.

Don’t forget the stop loss function

Beyond that, respect the value of the stop loss function. You never want to wake up to Bitcoin being down 30% overnight. Do you know what happens when BTC crashes drastically in a short period?

The altcoin market follows…

If this scenario suddenly occurred, your altcoins would be down by as much or more in their satoshi value. If you had $10,000 in altcoins and lost 30% worth, your $7,000 in BTC would next turn into $4,900 in fiat value. A 51% loss of funds could occur by not placing proper stop losses. A 5% loss would be $9,500 BTC which would become $6,650 in fiat. You could always run a bot to liquidate your alts and then your BTC holdings if Bitcoin’s price drops beyond a set level.

You can even go a step further and place a trailing stop. If the price reaches a certain high point the trade is triggered. You’ll automatically sell once it drops back below a set price. See below to get a better understanding of how the trailing stop function works.

cryptocurrency trailing stop loss visualization

For instance, let’s imagine an altcoin is worth $25 when you buy it… The price goes over $40 (your target) and then you sell if it comes below $35, securing your $10 gain. This tactic is a way of playing it safe, but this method helps you avoid missing out on taking profits. It’s particularly beneficial when trying to ensure you make money and don’t end up holding a bag when scalping short-term price spikes.

#6 – Learn All About Market caps

Cryptocurrency market cap graphic

Image Credit: CoinTelegraph.com

CoinMarketCap.com is a leading provider of cryptocurrency market caps and other relevant data points that speculators love to see. Sometimes they have issues with some of their listings, but their staff also tends to fix things within a reasonable timeframe. With thousands of coins and digital assets listed, pulling data from countless exchanges, they’re truly a #1 source for market cap info.

We recommend you visit their site and search some altcoins that interest you to see how much their database helps. For instance, Golem was recently listed to Binance… let’s check that one out on CMC for a moment.

Here’s a glimpse of their profile page:

Golem Cryptocurrency Page on Coinmarketcap.com

Markets Section

Here’s their Markets section (click the arrow next to USD to change price figures to BTC). Visit here to compare prices between exchanges for possible arbitrage opportunities — confirm the price on the other exchange’s site, in case of API delays. Pay attention to the volume and only consider the price strength at the largest exchanges.

Golem Cryptocurrency market list from Coinmarketcap.com

Social section

You will find the Twitter feed and sub-Reddit section if any exist for the project. Check the Twitter feed to see what recent releases or news rumors have passed through the coin’s social media channels.

Social media section of Coinmarketcap.com

Historical Data

This section, possibly the hidden gem out of all the data tracked by CoinmarketCap. Here you can see the fiat price of the coin by day, the market cap value by day and the trading volume by day.

Historical data for Golem cryptocurrency from Coinmarketcap.com

Make use of the historical trading data when trying to determine whether a sudden pump is sustainable. You can figure out how high the price is now in comparison to recent times. This data will at least tell you where the price will halt to test a resistance. Or, you’ll find out the price has been going up constantly as of recent and have to avoid the trade altogether.

In the screenshot above, we see a coin that can rise 10% more before needing a volume breakthrough (but the current lack of volume is concerning). it’s likely that nothing good will happen unless Bitcoin shows some bull legs. If the price comes down, lots of volume is needed on the bearish side to break beyond 5-10% down. A 20% loss would likely require majorly bad news or another crypto market crash.

*Trade historical data with Bitcoin market sentiment in mind. If BTC is bullish overall, the altcoin market will absorb price rises better and have a fairer chance to break resistance. All traders try to evaluate a coin’s market cap and see if it’s undervalued, but we have to remember that the perception of a high market cap is subjective.

An altcoin’s fiat value will vary according to the market sentiment at the time. If BTC is overly bearish, altcoin values can drop dramatically in hours to days. The opposite is also true — if BTC is overly bullish, altcoin values can rise dramatically, but this is not always the case.

Understanding the Coin Supply Data

Ripple, Litecoin and Ethereum gold and silver coins

Their coin profile pages include both “Circulating Supply” and “Total Supply” figures. The definition for these terms will vary depending on who you ask but here’s how they see it:

Total supply is the total amount of coins in existence right now / Circulating Supply is the best approximation of the number of coins that are circulating in the market and in the general public’s hands”.

Sometimes you will see a “Max Supply” figure as well which is simply the best estimate of how many coins will ever exist. Some cryptos will inflate forever and have no limitation to their coin supply.

As an investor, you must keep this in mind — deflationary crypto assets tend to suffer the harder when the altcoin market isn’t in a massive bull run (STEEM suffered greatly before the late 2018 crypto bubble.

#7 – Catchy Fundamentals are Your Friend

What's trending graphic

This tip isn’t easy to put in words.

Some fundamentals of a coin are known to increase its value. The traders who have been around for many years, day in and day out, will know what makes a difference. Many factors will be mentioned and recommended as worthwhile to follow. However, only an experienced trader will know what is a bullish trigger.

Here are some fundamentals to watch out for in newer, low market cap coins. If you plan to buy and hold mid to long-term, we suggest you keep them in mind while day trading cryptocurrency.

Masternodes

Masternodes give people the chance to make money from their holdings. This coin fundamental gets people staking and locks up more of the supply, which reduces the amount on the open markets. Coins with masternodes and very low market caps, but promising futures, serve as potential lottery tickets. For instance, if you got in on DASH and picked up masternodes early on you would almost certainly be a million right now.

Why are people so bullish on coins with masternodes? Because the masternodes create a form of passive income. Not only will you speculate on the coin increasing in value, but, you’ll also receive the extra payments for as long as you save your holdings.

New Exchange Listings

You might want to watch out for fresh listings on crypto exchanges. These coins often go up in value a fair bit when the announcement is made. Traders speculate that the increase in buying avenues will create a greater demand. Furthermore, the trading supply will be split up over more exchanges which makes for more buy strength.

Not all new exchange listings are profitable for speculators. This type of announcement is worth trading for a quick scalp if the market sentiment is positive at the time. In early 2018, getting listed on Binance (a fast-growing crypto exchange) resulted in many coins increasing anywhere from 40% to 400% their value in a short period of time.

You want to catch these announcements as soon as they happen and avoid getting in on the action if the coin already pumped heavily in recent days/weeks. Use an app like ‘Crypto Tracker Bot’ to receive instant signals when there’s even a hint of a new coin listing on any major exchange (for instance, you can get notified when a coin is “tested” by an exchange).

Here’s a preview of the Crypto Tracker Bot in action…

Crypto Tracker Bot in action

This particular app is compatible with many crypto exchanges. Some of the more well-known names include Binance, Bitfinex, Bithumb, Bittrex, Coinbase, Huobi, Kraken and Kucoin.

Many traders lose a lot of money by buying blindly into a new coin listing, especially on Binance where millions of users trade. The key here is to check the market cap history for the coin (which you can do via CoinMarketCap.com) and determine whether the coin already pumped. 

Also, keep in mind that high market cap coins won’t pump much from an exchange listing unless it coincides with a long-term trend reversal. While typically low market cap coins are riskier investments, if you catch a major exchange announcement early it could be a 50-200% profit in minutes to hours.

Other Price Growers 

  • Coin burns
  • Low coin supply
  • MVP already released
  • Team and advisor token lockups
  • Strong network with profitable mining
  • Coverage from influential crypto traders
  • Lead developers with impressive resumes
  • First-in-the-door licensing/regulatory approval

These examples are only some of the possible fundamentals a coin could have. In time, you’ll get a better feel for what matters to speculators and what drives hype on a coin-by-coin basis.

#8 – Follow Various Crypto Media Sources

The crypto world has grown at an incredible rate. Previously, all news stories would flood through Reddit. Before that, everyone read the Announcements section of BitcoinTalk to find out about the latest developments in cryptocurrency. Now, everyone is interacting through many ways such as chat groups, Github, LinkedIn, Reddit, Steemit and other sites.

The point here is that news can be found from many sources. You want to stay on top of the latest announcements when there’s big hype around a coin you hold or want to trade. You can even aggregate news, such as by checking what’s new through CryptoFlash.io (real-time crypto news source).

Here’s a look at what a news aggregator tool does …

CryptoFlash.io news aggregator screenshot

Convenient, right?

You can also check crypto news sites daily. The most reliable sources are CoinTelegraph, CoinDesk, CCN.com, CNC and Forbes. Many announcements are hyped or made via social media as well, especially on Twitter — check CoinMarketCap.com’s listing for any coin that interests you and make use of the ‘Social’ tab to find the latest tweets from the project.

Be careful which sub-Reddit sections you rely on for your news. Make use of Reddit to find links to popular news stories to decipher. You can also customize your Google News to display important crypto news.

The most reliable Reddit sub-sections at the moment include /r/cryptocurrency , /r/ethtrader and /r/bitcoinmarkets – sort by Top first and then by New while actively trading (to catch scalps based on small bumps from news). Check individual altcoin sub-Reddit sections as well.

#9 – Test Trading Strategies First

Test cryptocurrency trading strategies graphic

Imagine you’re building a bot. How would you make it more profitable? Any modification would be tested in iterations. You would have a testnet version and make adjustments until you found a perfect, winning strategy. On a much smaller scale you can still track and test by noting your trades and parameters on paper.

Simply decide your entry and exit points in a dynamic fashion. Once you’ve done that, use a demo or practice account of a Bitcoin CFD platform to see how your trades perform. Then run the iterations and compare the results. Integrate the most profitable code into your bot to yield the greatest rewards.

How complicated is building a trading bot? You will need to know how to code. It’s possible to make a trading bot in many languages, even Java, JS and PHP. The most common language for a crypto trading bot is Python.

You can also purchase trading bots which are adjustable. This alternative gives you the bare bones if you aren’t confident with your ability to code. There might be some limitations so you’ll have to weigh the pros and cons before you invest.

Finally: Stay Committed

Take the time to learn from others, learn from your mistakes and learn how to prevent setting yourself up for disaster. There’s no shame in even using testnets / practice accounts at first, to make sure you know how to deploy a winning strategy and protect your investment.

Everyone starts somewhere. Most winning traders are losers for a while, but then they realize what needs to be done to start winning more. Don’t get discouraged but take in all the knowledge and uncostly experience you can to become a successful crypto day trader.

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