Welcome to our in-depth interview with John Carballar, a seasoned professional in the dynamic world of cryptocurrency trading. Today, we delve into his experiences with automated trading bots, particularly those from 3Commas, uncovering the nuances and strategies that have shaped his journey from a traditional Forex trader to a pioneer in the crypto trading space.

John brings a wealth of knowledge and a unique perspective, having transitioned from the structured world of Forex to the 24/7, ever-evolving cryptocurrency markets. His insights are invaluable for anyone looking to understand the integration of automated systems in trading and how they can be leveraged to enhance performance and manage risks effectively.


Whether you're a seasoned trader or just starting out, John's experiences and the lessons he shares today promise to enrich your understanding of automated trading and its potential in the crypto universe. Join us as we explore the mechanics, the challenges, and the triumphs of using trading bots with a veteran who has witnessed the evolution of these tools first-hand.


1. Introduction to Automated Trading: What initially drew you to using automated trading bots like those from 3Commas for your crypto trading?

Mainly the trading times. I come from forex and the old school, in forex I was used to trading at specific opening or closing times of markets, in crypto it's very different, you can practically trade at any time, any day of the week. All my alerts used to go off outside my trading hours and it was a bit frustrating to have to be on my phone paying attention to any time of the day to trade, that's why bots were especially useful for me in the crypto market in particular.

Interesting... so you come from Forex, is the market very different?

Essentially it shouldn't, but because trading opened the doors to a new niche, a wave of new traders joined, causing the conditions and synchronization present in forex to fade a bit in crypto, since in forex there are certain 'rules' or standards that almost everyone followed. In crypto, due to the influx of new and mostly inexperienced traders, they created different market conditions, making it difficult to detect patterns when trading during certain time frames.

You mentioned coming from the old school, does that mean you've been trading for a long time? Could you say how long?


Since my first contact with MetaTrader, Forex, and demo accounts, it's been around 20 years, but dedicating myself full-time to this business, I have about 5 years approximately.

 2. Strategy Development: How do you develop and test your strategies before implementing them with bots on 3Commas?

Personally, I like to combine 2 or 3 indicators from different categories, oscillators, volume-based, and perhaps another one that weights the price over a period of time. I base my main idea on a setup or strategy regarding price action, adjusting my indicators to react in scenarios that I previously mark. Subsequently, I conduct backtesting with pinescript, grouping all the conditions for a possible entry, making adjustments to achieve a success rate above 50%, and then create my risk management strategy. Once I have all that, I create the code for my indicator that will specifically serve me for 3Commas. I launch it, and again leave a minimum 3-month testing phase to ensure that the script, alerts, API, and 3Commas are functioning correctly, or alternatively, to detect possible failures or issues, both in execution and in strategy.

You know that in 3Commas we have the demo account, do you use it? Backtesting and live trading can have different results…

Yes, I'm familiar with it, but I don't use it. From my experience, I believe that the 3Commas demo account is especially useful for learning to navigate the tools it provides, rather than for obtaining measurable results in the market, as it won't yield results that closely resemble reality because price behaves differently in a synthetic environment. There are inherent risks such as spread, financing rates, gaps, and even violent movements that can disrupt orders in the API, and all of these are what comes with trading in a real market and details that could inevitably affect operations or strategy. I view my backtests only as an approach to get a generalized idea of what might happen; however, I don't take them as fact. Once I create and fine-tune my tools, there's no other option but to dive in and expose myself to the market.

3. Bot Performance Management: Can you describe how you monitor and manage the performance of your trading bots? 

At first, it was a bit messy because I had grids, DCA, some inactive ones, others that were no longer working, or that I set aside, etc. Over time, I started adopting ideas. Now what I do is create sub-accounts on my exchange. When I create a strategy, I run it in isolation in a sub-account, so I can compare the metrics from the initial point the strategy is run, and compare the results with the stats from 3Commas. That way, I can specifically track a strategy with a certain assigned margin capital, without it being mixed with the equity curve of my entire portfolio.

I understand that with so many tools, it seems somewhat complex. Are there any specific stats you focus on? You mentioned the equity curve, but are there any other indicators or data points in particular that you evaluate? What indicators or data points are most crucial in your evaluation?

There are dozens of data points that can be considered, however, I follow the philosophy that if trading is naturally difficult, there's no need to make it even more complicated. From the data I consider as a baseline, I focus on the Sortino Ratio and the average number of trades that hit my stop loss. 

The Sortino Ratio is a performance measure used in investment analysis that focuses on the negative volatility of an asset or investment strategy. Unlike the Sharpe Ratio, which considers all volatility (both positive and negative), the Sortino Ratio only takes into account negative volatility, meaning price movements that are below a certain reference threshold, which is usually the target return or risk-free rate.

I focus primarily on scenarios that could potentially make me lose money, so by concentrating on minimizing that risk and protecting capital, profits practically come naturally once the worst possible scenario can be endured.

4. Adjusting Strategies: How often do you find yourself needing to adjust your bot's strategies based on market conditions or performance outcomes?

When I have or think about making adjustments, I do so based on performance. I do it this way because initially my goal is for the strategy to behave in a certain way, encompassing any possible market condition, whether bullish or bearish. But when returns approach a 20% loss (drawdown), I stop everything and begin to analyze what is happening, if everything is functioning correctly, the change in accuracy rate, and the profit ratio it has given me in recent months. Although I conduct backtests at least 1 to 2 years back (if the asset allows it), I cannot know exactly what will happen next, so I can only have a "red flag" to know when to stop and review whether I need to adjust parameters in the indicators, or if it might be a season that initially does not favor my strategy.

So you tolerate a 20% risk before adjusting your strategy, is that correct?

Correct, 20% of the total assigned margin in a strategy.

Exceeding the 20%, the probability of being able to recover the portfolio's breakeven point increases exponentially. That is to say, if I were to let it reach 25%, for example, I would practically need a growth of 30 to 40% in the portfolio just to reach the initial point (adjusting the risk to the 75% of the remaining portfolio).

5. Comparison with Manual Trading: In what ways has using bots changed your trading outcomes compared to when you traded manually?

It's an interesting approach because, although it may be counterintuitive, there's a strange force that leads you to fall into overtrading. Even though they're originally meant to "facilitate" things, I believe everyone at some point falls into the trap of overtrading because they have high-frequency trading (HFT) so easy and accessible. That creates a feeling of wanting to trade all the time, on all possible assets at the same time, and a feeling of wanting more and more. Being such a powerful tool, you have to take your time to learn to use it correctly and not let it consume you.

6. Risk Management: How do automated bots help you manage risk, especially during volatile market conditions?

A strategy must be executed to the letter if you seek to achieve results close to what the metrics show. In volatile environments, it helps me execute certain operations that, otherwise (manually), I might hesitate or create a cognitive bias based on rumors, fundamentals, or even communities. I know a bot will execute a trade without hesitation or wavering, conditions are met and it enters, similarly when it's time to exit, it maximizes profits as much as the data allows, without succumbing to fear or euphoria from an overheated market.

7. Tool Integration: Are there any tools or additional software that you integrate2 with 3Commas to enhance your trading efficiency or effectiveness?

I usually use Kingfisher to gather more information, Deribit to monitor the price on options contracts, and get an idea of where they want to move the price based on the max pain price. But generally, I try not to overwhelm myself with too much information. But that's external; I don't directly connect or use tools within 3Commas.

8. Success Stories and Failures: Could you share a particularly successful trade facilitated by a bot and a situation where a bot did not perform as expected? What lessons did you learn from each?

This was a trade that far exceeded my expectations. One of the things that characterizes the crypto market a lot is that periodically there are extreme movements without an apparent reason. Many times, because they are assets with low capitalization, they tend to be more manipulable and have unexpected reactions that are hardly visualized through technical analysis, since they mostly move based on market sentiment (FOMO, FUD). Although I would have manually closed this trade much earlier because I couldn't take any other point in price history as a reference, the bot helped me to keep track based on data from my indicators, squeezing a large part of the movement.

On the other hand, and exactly under the same principle, the opposite happened to me with this bot. Many times, exaggerated movements create a bias in which you think the movement was too extensive and the price "should" return at any moment, then the market surprises you with movements beyond the comprehension of a simple technical analysis. (for example, a long grid after a supposed aggressive drop, which continued to fall until completely liquidating my position).

What I have learned in the crypto space is that there is no way to anticipate the most explosive movements with technical analysis alone; purely speculative skills have to come into play, and having the highest number of probabilities on your side. In the end, it is important to understand that this business is about probabilities.

9. Future of Automated Crypto Trading: How do you see the role of automated trading bots evolving in the cryptocurrency market in the next few years?

While bots are an important tool in trading, I don't believe they can replace the skill of a conscious human mind. Trading bots alone cannot function, and if you think of delegating all responsibility to an algorithm, it could turn into a disaster, as the business is about finding opportunities and "loopholes" in the market to try to gain an advantage over other competitors. In a hypothetical scenario where 90% were bots, there would be a need for a human mind to detect that and find a way to outsmart them all, as no system is perfect.


10. Advice for Aspiring Bot Traders: What advice would you give to someone looking to start using trading bots using software like 3Commas? What are the common pitfalls to avoid?

I'm not sure if I'm the most qualified person to give advice of this kind, as I don't consider myself an expert, but if I had to give advice to a close friend or someone, it would be:

Acquire at least basic knowledge of analysis, whether it's technical analysis, charting, price action, or anything else, but have an idea of how the market works and moves.

Bots alone don't work magic; they're an extension to improve performance in your trading idea or strategy.

Dive deeper into how exchanges work, as there are things that are often overlooked such as funding rates, auto deleveraging, among other things.

Lastly, and I believe most importantly, be yourself; allow yourself to create your own ideas. While you may find a vast number of strategies on social media and YouTube, it doesn't mean they are profitable or suitable for everyone's needs and risk tolerance. It's important to feel comfortable and confident. If you enter the market with fear or excessive greed, it's likely to lead to wrong decisions and result in losses that you couldn't or shouldn't allow.

1. Introducción al Trading Automatizado: ¿Qué fue lo que inicialmente te atrajo a utilizar bots de trading automatizado como los de 3Commas para tu trading de criptomonedas?

Principalmente los tiempos de operativa. Vengo de forex y la vieja escuela, en forex estaba acostumbrado a operar en horarios específicos de apertura o cierre de mercados, en cripto es muy diferente, prácticamente se puede operar a cualquier hora, cualquier día de la semana. Todas mis alertas solían saltar fuera de mi horario operativo y era un poco frustrante tener que estar en el móvil atento a cualquier momento del día para operar, es por esa razón que los bots me fueron especialmente útiles en el mercado cripto en concreto.

Interesante… así que vienes de Forex, ¿es muy distinto el mercado?

Esencialmente no debería, pero debido a que el trading abrió la puertas a un nicho nuevo, una ola de nuevos traders se sumó y eso ocasionó que las condiciones y sincronía que hay en forex se desvaneciera un poco en cripto, ya que en forex de cierta manera hay "reglas" o estándares que casi todos seguían. En cripto por el hecho de adoptar nuevos traders y la mayoría no tan experimentados, crearon condiciones en el mercado diferentes, dificultando la detección de patrones al momento de operar en ciertas franjas horarias.

Has comentado lo de que vienes de la vieja escuela, ¿quiere decir que llevas mucho tiempo operando?, ¿podrías decir cuánto?

Desde mi primer contacto con meta trader, forex y cuentas demo, han pasado cerca de 20 años, pero dedicándome full-time a este negocio tengo alrededor de 5 años aproximadamente.

2. Desarrollo de Estrategias: ¿Cómo desarrollas y pruebas tus estrategias antes de implementarlas con bots en 3Commas?

Personalmente me gusta combinar 2 ó 3 indicadores de diferente categoría, osciladores, de volumen y alguno otro que me pondere el precio en un rango de tiempo. Baso mi idea principal en algún set up o estrategia sobre la acción del precio, ajusto mis indicadores para que reaccionen en escenarios que yo previamente marco. Posteriormente hago backtest con pinescript agrupando todas las condiciones para una posible entrada, hago ajustes para poder tener una tasa de acierto por encima del 50% y después creo mi estrategia de gestión de riesgo. Una vez que tengo todo eso, creo el código de mi indicador que me servirá específicamente para 3Commas. Lo lanzo, y dejo nuevamente una fase de prueba de mínimo 3 meses para asegurarme de que el script, las alertas, la api, y 3Commas funcionen de manera correcta, o en su defecto, detectar posibles fallos o problemas, tanto en la ejecución como en la estrategia.

Sabes que en 3Commas tenemos la cuenta demo, ¿la utilizas? no es lo mismo realizar un backtest que el trading en vivo…

Sí, la conozco, pero no la utilizo, desde mi experiencia pienso que la cuenta demo de 3commas funciona especialmente para aprender a manejar las herramientas que proporciona, no tanto para obtener resultados medibles en el mercado, ya que no arrojará resultados que se acerquen a lo real porque no se comporta de la misma manera el precio en un entorno sintético. Hay riesgos inherentes como spread, tasas de financiación, gaps, Incluso movimientos violentos que llegan a entorpecer las órdenes en la API, y todo eso es lo que conlleva operar en un mercado real y detalles que invariablemente podrían afectar la operativa o la estrategia. Mis backtest los veo solamente como un acercamiento para poder tener una idea generalizada de lo que podría pasar, sin embargo no los tomo como un hecho. Una vez que creo y ajusto mis herramientas, no hay otra opción más que meter las manos al fuego y exponerme al mercado.

3. Gestión del Rendimiento del Bot: ¿Puedes describir cómo monitoreas y gestionas el rendimiento de tus bots de trading? 

Al principio fue un poco lío porque tenía grids, dca, unos inactivos, otros que ya no servían o los dejaba de lado, etc, con el tiempo fui adoptando ideas. Ahora lo que hago es crear subcuentas en mi exchange. Cuando creo una estrategia la corro de forma aislada en una subcuenta, de esa manera puedo comparar las métricas desde el punto inicial que se corre la estrategia, y cotejar los resultados con los stats de 3commas. De esa manera puedo darle seguimiento específicamente a una estrategia con un X capital de margen asignado, sin que se mezcle con la curva de equidad de todo mi portafolio.

Entiendo que tantas herramientas se antoja algo complejo. Hay algunas stats en las que te fijas en concreto? Mencionaste la curva de equidad, sin embargo algún otro indicador o punto de dato en concreto en tu evaluación?

Hay decenas de datos que se pueden considerar, sin embargo soy de la filosofía en la que, si el trading naturalmente ya es difícil, no hay que complicarlo más aún. De los datos que yo considero como base, son el ratio de sortino, y el promedio de operaciones que tocan mi stoploss. El Sortino Ratio es una medida de rendimiento utilizada en el análisis de inversiones que se centra en la volatilidad negativa de un activo o estrategia de inversión. A diferencia del Sharpe Ratio, que considera toda la volatilidad (tanto positiva como negativa), el Sortino Ratio solo tiene en cuenta la volatilidad negativa, es decir, los movimientos de precios que están por debajo de un cierto umbral de referencia, que generalmente es el rendimiento objetivo o la tasa libre de riesgo.


Yo me enfoco en primer lugar en los escenarios que potencialmente me podrían hacer perder dinero, así que, concentrándome en minimizar ese riesgo y cuidando el capital, prácticamente las ganancias se dan solas una vez que se puede soportar el peor escenario posible.


4. Ajuste de Estrategias: ¿Con qué frecuencia te encuentras necesitando ajustar las estrategias de tu bot basándote en las condiciones del mercado o los resultados de rendimiento?


Cuando tengo o pienso en hacer ajustes, los hago en función del rendimiento, lo hago de esa manera porque inicialmente mi objetivo es que la estrategia se comporte de cierta manera abarcando cualquier posible condición de mercado, ya sea bajista o alcista. Pero cuando los rendimientos se acercan a un 20% de pérdida (drawdown) detengo todo y empiezo a analizar que es lo que sucede, si todo funciona correctamente, el cambio en la tasa de acertividad y el ratio beneficio que me ha dado en los últimos meses. Aunque los backtest los hago como mínimo de 1 a 2 años atrás (si el activo me lo permite) no puedo saber a ciencia exacta lo que ocurrirá después, de esa manera solo puedo tener un "foco rojo" para saber en que momento parar y revisar si tengo que ajustar parámetros en los indicadores, o si posiblemente sea una temporada que en principio se que no favorece a mi estrategia.


Entonces toleras un riesgo del 20% antes de ajustar tu estrategia, ¿es correcto?

Correcto, un 20% del total del margen asignado en una estrategia.

Rebasando el 20%, la probabilidad de poder recuperar el punto de equilibrio del portafolio se aumenta exponencialmente. Es decir, si dejara que alcance un 25% por ejemplo, necesitaría un prácticamente un crecimiento de un 30 o 40% en el portafolio para alcanzar tan solo el punto inicial (ajustando el riesgo al 75% del portafolio que me queda)

5. Comparación con el Trading Manual: ¿De qué manera el uso de bots ha cambiado tus resultados de trading en comparación con cuando operabas manualmente?

Es un acercamiento interesante, ya que, aunque puede ser contraintuitivo, hay una extraña fuerza que te lleva a caer en over trading. Aunque originalmente están hechos para "facilitar" las cosas, creo que todos en algún momento caen en la trampa de sobre operar ya que tienen tan fácil y accesible el HFT (high Frequency Trading). Eso crea una sensación de querer operar todo el tiempo, sobre todos los activos posibles al mismo tiempo, y una sensación de querer cada vez más. Siendo una herramienta tan poderosa hay que tomarse su tiempo para aprender a usarla de forma correcta y que no te coma la cabeza


6. Gestión del Riesgo: ¿Cómo te ayudan los bots automatizados a gestionar el riesgo, especialmente durante condiciones de mercado volátiles?

Una estrategia tiene que ejecutarse al pie de la letra si se busca tener resultados cercanos a lo que te arrojan las métricas. En entornos volátiles me ayuda a ejecutar ciertas operaciones que, de otra manera (manual) quizá podría dudar o crear un sesgo cognitivo basado en rumores, fundamentales, o incluso en comunidades. Sé que un bot ejecutará una operación sin dudar ni titubear, se cumplen las condiciones y entra, de la misma manera cuando toca salir exprime los beneficios tanto como LOS DATOS se lo permita, sin caer en miedo o euforia por un mercado sobrecalentado.

7. Integración de Herramientas: ¿Hay alguna herramienta o software adicional que integres con 3Commas para mejorar la eficiencia o efectividad de tu trading?


Suelo utilizar Kingfisher para recaudar más información, deribit para monitorear el precio sobre los contratos de opciones y darme una idea hacia donde quieren mover el precio basándome en el max pain price. Pero por lo general procuro no sobreestimularme con demasiada información. Pero eso es externo, como tal no conecto o utilizo herramientas directamente en 3Commas.

8. Historias de Éxito y Fracasos: ¿Podrías compartir un trade especialmente exitoso facilitado por un bot y una situación donde un bot no haya funcionado según lo esperado? ¿Qué lecciones aprendiste de cada uno?




Este fue un trade que superó por mucho mis expectativas. Una de las cosas que caracteriza mucho al mercado cripto es que periódicamente hay movimientos extremos sin una razón aparente. Muchas veces por ser activos con baja capitalización suelen ser más manipulables y tienen reacciones inesperadas que difícilmente puedes visualizar mediante un análisis técnico, ya que mayormente se mueven por sentimiento del mercado (FOMO, FUD). Aunque yo manualmente hubiera cerrado mucho más temprano este Trade porque no podía tomar como punto de referencia ningún otro punto en la historia del precio, el bot me ayudó a seguir la pista basado en datos de mis indicadores exprimiendo gran parte del movimiento.

Por otro lado y exactamente bajo el mismo principio, en este bot me pasó exactamente lo contrario. Muchas veces los movimientos exagerados crean un sesgo en el que piensas que fue demasiado extenso el movimiento y en cualquier momento el precio "tendría" que regresar, entonces el mercado te sorprende con movimientos fuera de la comprensión de un simple análisis técnico. (ejemplo de un grid en long después de una supuesta caída agresiva, que siguió cayendo hasta liquidar por completo mi posición).

Lo que he aprendido en el espacio cripto, es que no hay manera de poder anticipar los movimientos más explosivos con un análisis técnico, tienen que entrar en juego habilidades puramente especulativas, y tener a favor la mayor cantidad de probabilidades. Al final hay que entender que este negocio se trata de eso, de probabilidades.

9. Futuro del Trading Automatizado de Criptomonedas: ¿Cómo ves que evolucione el papel de los bots de trading automatizado en el mercado de criptomonedas en los próximos años?

Si bien los bots son una herramienta importante en trading, no creo que puedan reemplazar la habilidad de una mente humana consciente. Por si solos los bots de trading no pueden funcionar, y si piensan delegar toda la responsabilidad a un algoritmo, puede ser que se convierta en un desastre, ya que el negocio se trata de encontrar oportunidades y "agujeros" en el mercado para intentar tomar ventaja frente a otros competidores. Y en un caso hipotético en el que el 90% fueran bots, abría una mente que detecte eso, y logre encontrar la manera de burlarlos a todos, ya que ningún sistema es perfecto.

10. Consejos para Futuros Operadores de Bots: ¿Qué consejo darías a alguien que esté buscando comenzar a usar bots de trading utilizando software como 3Commas? ¿Cuáles son los errores comunes a evitar?

No sé si soy la persona más indicada para dar un consejo de este tipo, ya que no me considero un experto, pero si tuviera que darle un consejo a una persona cercana o un amigo sería:

- Adquiere por lo menos conocimientos básicos de análisis, ya sea técnico, chartismo, acción del precio, lo que sea, pero tener una idea de cómo funciona y cómo se mueve el mercado.

- Los bots por sí solos no hacen magia, son una extensión para tener un mejor desempeño en tu idea o estrategia de trading

- Investiga más a profundidad cómo funcionan los exchanges, ya que hay cosas que muchas veces no se consideran como tasas de financiación, auto desapalancamiento, entre otras cosas.

- Y por último y creo que lo más importante, sé tú mismo, permítete crear tus propias ideas, si bien en redes sociales y youtube encontrarán cantidades ingentes de estrategias, eso no significa que sean rentables o que se ajustarán a las necesidades y tolerancia al riesgo de cada quien. Es importante que se sientan cómodos y seguros, si entran al mercado con miedo o excesiva codicia lo más probable es que eso los haga tomar decisiones equivocadas y se traduzca en pérdidas que no podían o deberían de permitirse.

This blog is a transcript of an interview with a professional crypto trader who explains his trading philosophy along with giving some specific advice on how he handles different market conditions.

From Forex to crypto bots: Interview with professional trader John Carballar

John shares his wisdom with the 3Commas community

Want to learn how to day trade Bitcoin? You’ve come to the right place.

Day trading Bitcoin allows traders to profit by speculating on the cryptocurrency's short-term movement. As a result, day trading has become the most widely used strategy across all financial markets, including stocks, forex, commodities, and cryptocurrency.

Unlike traditional financial markets, the crypto market has drawn attention because it provides one of the most profitable environments for day traders. The massive volatility and their availability 24 hours a day, seven days a week, have proven to be a strategic opportunity to make quick money from day trading.

In this bitcoin day trading guide, we will look at what day trading is and also consider the different strategies for day trading Bitcoin.

Most of you are probably wondering how to make money day trading Bitcoin. So, let us find out.

Day trading (also referred to as "intraday" trading) is trading executed on the same day, usually with the assistance of computers, to capitalize on small and short-term movements in price. The goal is to capitalize on small (or large) fluctuations in price, to realize incremental gains that can add up over time.

Day trading is fundamentally about volume, support, and resistance.

Reportedly, good day traders use their day trading strategies to make one to two percent in profit per day. The statistical probability is slim, but how can you beat the odds?

If you want to know how to day trade Bitcoin, your chances of success depend on taking the right steps before you start trading. Before focusing on how to day trade Bitcoin, you need to understand how the blockchain itself works and what makes it different from the traditional model of transactions.

Learn the basics through free educational content online

Before you start day trading Bitcoin, gather different opinions from people who know what they are talking about. 3Commas hosts an entire community of professional traders from which you can learn firsthand.

Apart from developing good day trading strategies, this will also go a long way in helping you understand how to day trade Bitcoin.

Pay attention to all the aspects – positive as well as negative

Research resources that will objectively highlight different peculiarities of this market. There is a lot to learn from blogs, books, online classes, documentaries, etc.

In this risky market, things can go wrong at any time. For example, in late June 2019, the Bitcoin price fell by 15% after a violent sell-off. Interestingly, even seasoned traders were caught off guard.

Considering the volatility of Bitcoin, you can expect a lot of ups and downs. Your existing capital, risk tolerance, and financial goals are the main determinants.

Catch up to speed with the recent industry updates

The media is the most important source of influence on the price of Bitcoin and other cryptocurrencies. Certain news spreads like wildfire, and the price of Bitcoin gets impacted. For example, a simple declaration of a large company’s interest in Bitcoin may cause a sharp increase in the price.

Political events also have an impact on day trading Bitcoin. This is why you need to pay attention to them while learning how to day trade Bitcoin.

During the Greek crisis in 2015, many Greek traders invested in cryptocurrency and were affected by it. Similarly, presidential elections or Brexit will affect Bitcoin’s price before any other crypto.

If the software interacts directly with financial exchanges, it is a useful tool in such rapidly changing settings as daily trading. Based on the comprehensive interpretation of the market data, the 3commas trading program allows trades to be executed faster and more efficiently.

How to Day Trade Bitcoin: Strategies for Day Trading Bitcoin

Even though you can get deep into highly technical indicators, you should learn the basics of simple Bitcoin day trading strategies in the beginning. It does not necessarily have to be an intricate strategy that you can’t wrap your head around.

When it comes to day trading Bitcoin, the more straightforward the strategy is, the more effective it is. The basic questions you should be asking yourself when deciding on a strategy are:

How much effort are you willing to put into the process? Can you manage sitting behind the computer for a long time, or do you want minimal involvement?

What kind of expertise does the strategy require? With varying degrees of complexity, you need to find one that suits your skills.

When do you want to see the first results? Do you expect to start earning as soon as possible, or can you give it some time?

What trading style would suit your personality best? Decide if you should stick with formula-like systems or follow a more creative and intuitive approach.

Do you want to play it safe or make riskier but potentially more profitable trades?

What are the regulations in your country? They can eliminate certain strategies. For example, US regulations place limits on leverage and hedging.

We will shed more light on Bitcoin day trading strategies later in the guide.

When day trading Bitcoin, positions are based on short-term movements, so you need to respond quickly. If there is relevant news that could affect the price or you see an emerging pattern, the window for any action is very limited. After you master the basic techniques, you could consider using a series of day trading strategies.

How to Begin Day Trading Bitcoin for Beginners

The first decision a day trader must make is which platform to use. Since traders based in the US can only use crypto trading platforms that are regulated domestically, this is an important factor that must be considered when looking for the best platform.

Factors to Consider Before Choosing a Trading Platform

While learning how to day trade Bitcoin, you need to pay attention to the platform that will be used for day trading bitcoin. Here are the most important things you need to consider:

The longer an exchange has been in business, the more stable and credible it is.

Knowing which cryptocurrencies are available for trading ahead of time can be a useful tool in deciding which platform to use. A smaller exchange with more supported cryptocurrencies and trading pairs may be more useful for day traders who are interested in altcoins than a larger exchange with fewer options.

When buyers or sellers execute a trade, exchanges charge transaction fees. They do this to monetize their business.

Many crypto exchanges accept wire and bank transfers, but few accept gift card, PayPal, and credit card funding. So it is important to know if the platform accepts your deposit option.

One of the best ways to decide which exchange to use is to visit different crypto communities and read user feedback. This will give you an idea of how the platform operates and if it is reliable.

The liquidity of an exchange refers to how fast and how easy an exchange can convert one asset into another without any impact on the asset’s price. The best cryptocurrency exchanges are highly liquid, which means they can buy or sell assets almost instantly and with a small difference between the bid and ask prices.

Once you've chosen a platform, it's time to decide what you want to invest in. Market volatility is a necessary evil for crypto day traders. The same market conditions that scare away long-term investors create opportunities for day traders to profit. The day trader requires volatility and liquidity to actively participate in the crypto market.

Factors to Consider Before Choosing What to Invest In

Consider asset liquidity, volatility, and trading volume when deciding what to invest in.

This refers to how easy it is to convert an asset to cash without affecting its price is referred to as "asset liquidity." When the trader executes the trade and the exchange fulfills the order, the price of a crypto asset can change.

Slippage is the difference between those prices, and in the crypto markets, a few minutes can mean the difference between a large profit and a large loss.

A lack of asset liquidity can devastate the crypto market, thereby leading to slippage and increasing flash crash risk. A flash crash occurs whenever a large market sell order clears out the top buy offers in the order book. Traders try to close their positions as soon as possible, and with no buy orders present, the asset's price can plummet.

The unpredictability of the movement of crypto prices is referred to as "market volatility." Economic data, research reports, and news cycles are all factors that influence market volatility. In the crypto markets, the same factors have a dramatic (or no) impact on certain crypto assets.

The total number of cryptocurrencies traded over a specified period is referred to as "trading volume." The trading volume of a cryptocurrency is a measure of overall market interest. A cryptocurrency with a high trading volume has more liquidity. In the same vein, a cryptocurrency with high liquidity often has a higher price.

While the cryptocurrency market is highly liquid and volatile, not all cryptocurrencies are created equal. Cryptocurrency day traders should carefully examine an asset's trading volume to determine whether it can be sold quickly and for a higher price than when it was purchased.

The next step in learning how to day trade Bitcoin is to choose a day trading strategy.

Day traders use a variety of strategies to profit from short-term fluctuations in the cryptocurrency markets. A good crypto day trader should do research and come up with a plan for when to get into and get out of positions.

Certain websites allow prospective day traders to track and copy the most successful traders on the platform. The following are some of the most popular trading strategies for day trading Bitcoin.

Arbitrage in cryptocurrency is when traders buy a cryptocurrency on one exchange and then sell it right away on another exchange for a higher price, making a profit.

Arbitrage opportunities can be facilitated by cryptocurrency pairs. Arbitrage traders can profit by taking advantage of the value difference when the price of a cryptocurrency pair (comprising a lesser-known altcoin and Bitcoin) differs from one exchange to the other.

Arbitrage is a complex financial strategy that is usually done automatically by software that tracks prices. It helps keep prices for digital assets consistent from exchange to exchange.

The goal of crypto trading bots, like the ones offered by 3Commas, is to make more money while reducing losses and risk. This is a strategy that you should consider if you want to understand how to day trade Bitcoin.

Crypto trading bots can automate the process of analyzing price movements, exchange fees, and opportunities to profit from trades in the short term. Day traders who understand APIs and software programming should consider taking advantage of this day trading technique.

There is no denying that computers can perform calculations much better than humans. It is crucial, especially when there is real money on the line. The success of a trader is heavily dependent on his or her psychological state, whereas a bot is not affected by emotions.

People often make mistakes by holding trades for additional gains even though it goes against their chosen strategies. Failure to stick to the plan can have significant ramifications. People lose existing profits just because they feel they can get more.

Another human flaw to point out is not being able to react quickly enough. Trading bots never make erratic decisions because a predetermined algorithm dictates every action. Also, when it comes to day trading, timing is key. Bots can react to data and execute transactions in a matter of seconds.

However, a trading bot is as good as the technology behind it. When you choose the automated trading platform by 3Commas, you get a robust platform with no downtime and technical hiccups.

Your trading gets even better when you think about how you can share and learn strategies, indicators, and settings from other traders in the community.

The long straddle entails purchasing both a put and a call order. A long straddle has call and put orders on the same strike price, cryptocurrency, and expiration date.

Due to the volatility of the crypto market, a long straddle is a popular option in crypto trading. A crypto day trader who uses this strategy is betting on the price of a crypto asset changing. In the long straddle, the day trader profits whether the price rises or falls. If the price does not move, the trader will lose money.

Another strategy that you can use in day trading Bitcoin is range trading.

Range traders make money in markets that don't move in any particular direction. They do this by finding stable highs and lows, which are shown on charts as resistance and support levels.

Day traders using range trading techniques pick a time frame during which they will buy a digital asset when it is at a low price (i.e., oversold) and sell it when it is overbought (at a higher price) to make money.

Crypto day traders prefer range trading because it has clearly defined entry and exit points, which can help reduce losses. The range trader reduces losses caused by bad news or bad market conditions by making small profits over a short period of time.

Scalpers use large amounts of liquidity to capitalize on minor price movements. This Bitcoin day trading strategy can include buying and selling Bitcoin over a few hours and earning small percentage gains at the end of the day—or setting up a bot for high-intensity and frequent trades based on signals or technical indicators.

Since scalping positions are smaller, traders can evaluate their gains or losses at the end of the day rather than investing for the long term. Due to market volatility, traders can consistently earn small profits over time, which can add up to significant gains in the long run.

Technical analysis is an important aspect that those learning how to day trade Bitcoin must consider.

The study of financial data such as historical price and volume data points to identify statistical trends in the markets is known as technical analysis. TA helps traders find profitable trading opportunities.

In the crypto world, technical analysis can be used as a guideline to assess how past performance predicts future gains or losses.

Technical analysis works best when combined with other trading strategies. Cryptocurrency day traders must be aware of and use TA, but they should do so alongside fundamental analysis, news, correlation arbitrage, and other market drivers.

All trading charts show data points for past and current price movements. A Bitcoin day chart focuses on its price action for a specific day. You can also view changes within a specific timeframe, which helps traders make more informed decisions.

Whilst there is no shortage of line and bar charts, one of the most valuable types is the candlestick chart. It offers plenty of valuable information in a concise form. Here is what the chart can tell you:

It shows what Bitcoin’s opening and closing prices were.

Shadows display the highest and lowest prices at which Bitcoin has traded that day.

If the stick is red, then the closing price was lower than the opening one. When it’s green, it signifies that it closed higher.

If you can tell that a chart is mostly red and heading downward, it exhibits a downward trend. If the opposite is true (green and upward), it is an upward trend.

There is a lot more information to extract that will hold significance in your trading. So, don’t rush into trading before you properly learn how to use charts.

Trends show the momentum of Bitcoin price changes in a particular direction. You can identify these patterns on a chart and make decisions based on that data. It’s not hard to tell the price direction as it is indirectly represented on a chart through these invisible lines:

However, prices don’t follow the lines precisely but rather move back and forth between an upper and a lower trend line.

Peaks in an uptrend and troughs in a downtrend form a trend channel, which is a commonly used concept in technical price analysis. The channels show where Bitcoin is trading at a particular time and compare it to the overall direction.

Price changes are not linear. That is why technical chart analysis uses levels of support and resistance; they showcase short-term trends within the overall trend. Resistance shows where an upward trend is expected to pause or rebound.

That means there are a lot of buyers concentrated at that time.Resistance can be used as an exit point for a transaction. A level of support can be used to predict where a downward trend can pause or rebound. This can be used as an entry point.

Let’s examine limit orders in comparison to market orders. Market orders are the fastest way to enter or exit a trade at the best price available at the time.

However, instant execution means that the price becomes secondary. When you place a limit order, it will only be triggered once Bitcoin reaches the price you set. Thus, you may get a better price if you are patient enough.

Have it in mind that the price should be profitable for you but still realistic. For example, you want to buy three bitcoins for $9,000 each. The limit order will not be executed until there is a seller (or sellers) willing to accept the price that matches yours. Alternatively, you could sell bitcoin for no less than $10,000.

If the market price is lower, it simply will not execute your order. Here are the benefits of limit orders: 

More freedom because traders are not required to actively monitor prices.

 However, some aggressive trading techniques do not suit limit orders. In situations where fast execution is more important than the price difference, you should opt for market orders.

When you are day trading Bitcoin, the activity on the exchange occurs very sporadically. So, you need a reliable exchange that won’t let you down at the most crucial moment. Before you commit to any exchange, take your time to fully explore its functionality and thoroughly evaluate its drawbacks.

Here are the best crypto exchanges for day trading Bitcoin:

The great news is that all of the exchanges, except for the last one, are supported by 3commas.

Psychological Factors in Day Trading Bitcoin

Many traders shared their experiences about the psychological struggles that have caused them losses. If you want to avoid quietly sabotaging your trading profits, here are some mindsets that you need to adopt:

You cannot get rich instantly, so you shouldn’t try to; slow and steady wins the race.

If you constantly blame your losses on others, you don’t learn from your mistakes. See what you did incorrectly and make the necessary changes.

Fear can be detrimental to your ability to make the right decisions. Make peace with the fact that funds allocated for trading can be lost – then you can act rationally.

Making money by trading Bitcoin is not just a hobby that you can get in and out of whenever you want. Rearrange your schedule so that you can always find the time without making excuses.

Although the cryptocurrency market can be unpredictable, you need to maintain a sense of control. Stay reasonably confident and trust your knowledge and trading plan.

Trading cryptocurrency for profit is a difficult craft in itself. But when you add other layers—such as trading Bitcoin specifically and engaging in day trade – traders can’t afford to neglect the rules.

Pros and Cons of Day Trading Cryptocurrency

The market is open 24 hours a day, seven days a week

Since the market never closes, trades can be made at any time. This is advantageous because you can access markets at any time of day or night, depending on your time zone.

Market volatility can be beneficial to you

Even though day trading Bitcoin and other cryptocurrencies is a risky venture, there are numerous advantages. One of the best things about trading cryptocurrencies every day is that you can take advantage of volatility.

You can profit when the market goes up and down because it will naturally fluctuate in price throughout the day.

Cryptocurrency prices are displayed on exchanges around the world, making them easily accessible to anyone looking to buy or sell. This eliminates the need for guesswork when determining how much something should cost.

Since markets do not have set hours for trading, you may not have consistent hours or breaks while day trading Bitcoin and other cryptocurrencies on various exchanges around the world. The inconsistency in the trades can result in increased stress.

Only a few coins are available for trading on popular exchanges

If you are interested in day trading, there are a few pitfalls to be aware of before you begin. Only a limited number of coins can be traded on popular exchanges, and it can be hard to enter and close positions if they don’t happen quickly. Hence, crypto day trading is ideal for experienced traders.

This guide has explored what day trading is and how to day trade Bitcoin.

Day trading Bitcoin can be a profitable endeavor. However, it is critical to remember that it is by far one of the riskiest ways to interact with the crypto market. Understanding the specifics of how to day trade Bitcoin is critical if you want to make long-term gains.

The best way to manage this risk is to first thoroughly understand the cryptocurrency market, then devise and implement a suitable strategy. If you take these precautions, you can understand how to day trade Bitcoin profitably.

Bitcoin day trading is a high-risk and a high-reward activity. You can be on your way to crypto success by using an effective trading strategy in 2023. However, you need to understand how to day trade Bitcoin.

Learn How to Day Trade Bitcoin: a Guide with Winning Trading Strategies in 2023

Learn how to make money day trading Bitcoin – steps you need to take, gaining control and confidence, and risks and benefits that come from day trading Bitcoin.

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