Before going any further, it is recommended to take a pen and a piece of paper to note down this scalping strategy and its rules. We will look at the buy-side.
Choose Coins with High Liquidity and Volatility
The first step you must do is to choose coins with high liquidity and volatility. If you do not trade the most liquid coin (bitcoin) daily, and you prefer altcoins, try to choose those which have high volatility and liquidity.
Today, more than 1600 coins are available on the market and are always growing. You can reduce your choice area by following the top list.
Trade smaller crypto daily can also be a very profitable business. But it also has a bigger risk. Always remember that, as fast as they rise, the crypto prices can fall fast. Going forward, you will learn the way to earn money from trading crypto daily.
Money Flow Index Indicator
The money flow index is the strategy of this particular day trading crypto that uses one simple indicator. Traders can use this to track smart money activity and to measure when cryptocurrencies are sold and bought by institutions.
3 period settings are preferable for the MFI indicator. We will also change the default sell and buy levels from 20 to 0 and respectively from 80 to 100.
Wait To Reach Level 100
The number 100 MFIs indicates the presence of large sharks entering the market. Smart money can hide its tracks when buying. They must have left traces of their activity in the market and the MFI indicator can be used to read that activity.
Technical indicators are not always correct. So, to enhance the day trading crypto strategy, a few more conditions need to be added.
Which means, when the time is nearing the middle of the heart, we have to go through the first reading of the MFI out of 100 and learn it gradually. The prices need to hold on for the first and second 100 MFI readings.
If after the first two readings the price drops, then this indicates that we are most likely going for a decline. Now determine the right place to buy bitcoin and what technical conditions it must meet.
Buy (If the Next Candle is Bullish and the MFI = 100)
Now, we can wait for the 3rd reading above 100. The 3rd reading does not have to be MFI = 100. Every other MFI = 100 can be taken.
If it is not possible on the MFI indicator for the third 100 reading, as long as all other technical conditions are met, you can choose the next one. Next, the candlestick is needed to be a bullish reading when we get a reading of MFI = 100.
The candle closing should be near the top end, giving us very small wicks. This allows us to move to the next essential thing for a day trading crypto which is to take profits and to place the protective stop loss.
Get Profits for The First 60 Minutes
Below the low of the day is the place to hide the protective stop loss. A shift in the market sentiment will be signed with a break below it and this is where you can exit the trade, and also indicate a reversal day.
The nature of volatility in the crypto market is High. volatility is perfect for day trading crypto that provides you with a good environment to succeed.