Can You Day Trade Crypto?

Short answer: Yes, it is possible to day trade crypto, but it’s important to understand the realities and statistics associated with this approach.

Realistic answer: Statistically, the majority of day traders, around 95-98%, end up losing money. This is a significant figure to consider before embarking on day trading. The attrition rate is high, with almost 40% of day traders quitting within a month, and after three years, only 13% of day traders remain.

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DO MOST DAY TRADERS LOSE MONEY?

To illustrate the challenges, let’s look at the experience of Taiwanese day traders in the 90s. Despite making substantial profits initially, it took them three years to lose all their gains from the previous decade. Similar situations might be occurring among US traders who made significant profits during the 2021 bull market.

Further evidence highlighting the difficulties of day trading comes from a research paper titled “The Cross-Section of Speculator Skill: Evidence From Day Trading” published in the Financial Journal. The paper indicates that day trading can be consistently and highly profitable for a select few, provided they possess:

• The best information/strategies
• Access to fast trading systems
• The highest conviction/discipline. 

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However, these individuals constitute less than 1% of all traders. They are likely experienced professionals with extensive connections and sophisticated trading tools.

In contrast, the overwhelming majority of day traders consistently lose money, performing worse than random chance would predict. 

In other words: Unless you’re the Michael Jordan or Steve Cohen of day trading, chances are you fall into the 98% of people who lose money over time.

WHAT’S THE BEST WAY TO TRADE CRYPTO?

Fortunately, day trading is not the only approach to trading crypto. At the Market Rebellion Crypto community, our focus lies in risk management and identifying swing trading opportunities that typically last from one week to a few months. 

THE STRATEGY: We believe some of the best opportunities in crypto trading come from riding boom and bust cycles and subsequently shorting them.

Notably, sometimes market anomalies create day trading opportunities. Two recent examples are the $LUNA crash and the $FTT crash during the 2022 bear market. Traders who shorted these above average bust-cycles made trades that the talking heads of Finance TV can only dream of. While our strategy does make it possible to capture these moves, it’s important to remember that this type of movement is exceptionally rare. That’s why we stick with what we know: Boom and bust.

‘Boom and bust’ has been the most consistent theme throughout crypto and will likely continue to be because of the ‘get rich quick’ mentality of market participants. Most recently meme coins such as $PEPE and $WOJAK have taken the market by storm in previous weeks. They are now textbook examples of how boom and bust typically occurs in the crypto space.  

Meme coin PEPE increased over 1500% and proceeded to decline by 80% in the following days. Source: CoinMarketCap 

WHERE TO FIND CRYPTO TRADE IDEAS

To learn more about our trading approach in the cryptocurrency market, we invite you to join the Market Rebellion Crypto community. 

As a member, you’ll gain access to easy-to-follow trade ideas from professional cryptocurrency analysts, participate in a trader community chat where professional traders are available to answer your questions, receive daily market update videos with trade idea updates, and engage in weekly VIP webinars where you can interact directly with professional cryptocurrency traders. 

Try it this week for the same price as your morning Starbucks.