How to Make a Living Day Trading Ethereum in 2024: Strategies and Secrets Revealed

Day trading has emerged as a popular form of trading in recent years, especially in the cryptocurrency market. Ethereum, the world's second-largest cryptocurrency by market capitalization, has gained significant attention among day traders due to its high volatility and potential for profit.

Day trading Ethereum involves buying and selling the cryptocurrency within a single trading day to profit from its price movements. This type of trading requires a deep understanding of the Ethereum market, technical analysis skills, and a disciplined approach to risk management.

This article extensively explores the fundamentals of day trading Ethereum, including the strategies, useful tips, and factors to consider when choosing a platform for day trading Ethereum.

Crypto Trading Strategies

In the world of cryptocurrency trading, many different strategies can be employed to make a profit. Timing is one of the most important factors in any successful crypto trading strategy.

Another important factor to consider when developing a crypto trading strategy is which currencies to trade. It is important to do your research and only invest in those currencies that have the potential to increase in value over time.

Day Trading in Cryptocurrency 2024

In the context of cryptocurrencies, day trading is a type of asset speculation in which a trader buys and sells a cryptocurrency asset on the same trading day in order to close all open positions before the market closes for the day and prevent unmanageable risks and negative price gaps between the close of one day and the price at the open of the next day.

Day trading in cryptocurrencies is a high-risk, high-reward activity. Day trading is essentially a collection of strategies intended to profit from sudden changes in an asset's price. As the name suggests, a day trader's objective is to close out a trading day with holdings that are worth more than they were at the beginning.

Ethereum Day Trading is one of the trending and effective crypto trading strategies. An effective strategy distinguishes between gambling and trading. An effective strategy can distinguish between a few lucky runs and reliable returns. Depending on the market and your skills, you can use various trading strategies in various trading situations. You must understand the market and determine when a specific strategy should be used.

Ethereum

The second-most valuable cryptocurrency is Ethereum (after Bitcoin). However, there is still a significant gap between the bitcoin network and the Ethereum market, despite the Ethereum market being supported by many of the same exchanges and infrastructure.

Unlike bitcoin, Ethereum was not initially designed to function as universal digital money. It was intended to use blockchain technology to pay for only particular actions on the Ethereum network. Anonymous payments can be sent anywhere in the world, and the blockchain, a decentralized ledger, can store transactions. Because of this, Ethereum has been used by businesses both online and offline all around the world.

Why Trade Ethereum?

• Accessibility: Trading in Ethereum is possible at any time, day or night, 7 days a week, 356 days a year, and from any location on the earth. Trading hours are nonstop. All that is required is a connection to the internet, a smart device or PC and/or an internet browser.
• Cost: If you choose your exchange carefully, you can reduce the gas fee to as low as 0.25% for Ethereum transactions.
• Leverage: Ethereum leveraged trading is available via some trading platforms. Because of this, you will be exposed to greater price risk (both on the upside and the downside) than your trading budget would typically allow. Greater profit potential is associated with higher levels of risk.
• Liquidity: Due to the proliferation of trading platforms, exchanges, and online brokerages across the globe, Ethereum is often considered among the most liquid investment assets currently available. Trading Ethereum for fiat currency or other assets, such as gold, may be done quickly and efficiently, and the associated costs are extremely reasonable.
• Diversified investment portfolios: Contracts for difference (CFDs) are used on the different trading platforms provided by FX brokers in order to trade Ethereum. Trading indices, commodities, and currency pairs in forex are similar to how easily and efficiently this method works.
• Stability: Ethereum's price may fluctuate like other cryptocurrencies, but it may also climb steadily as the technology that underpins it evolves and improves.

How to Day Trade Ethereum

Owning some of the cryptocurrency of your choice (such as Ethereum) and having the ability to exchange it are the two prerequisites for day trading.

You can get started easily by creating an account with one of the top centralized cryptocurrency exchanges (such as Binance, Coinbase or Kraken), adding money to your account in fiat currency, and then purchasing Ethereum. From there, you can start day trading cryptocurrency by implementing one of the strategies listed below:

Ethereum Day Trading Strategies

High-Frequency Trading (HFT)

With high-frequency trading, you can profit from price fluctuations that happen on the order of seconds or fractions of seconds. A human trader could not possibly handle the frequency in question, typically on the order of dozens of trades per second.

Using programmed software called a trading bot is the only way to partake in high-frequency trading. As long as it is connected to the exchange, the bot continuously makes transactions based on the trading logic provided and keeps an eye on the market. High-frequency trading can be integrated with many different tactics by implementing appropriate trade logic.

Scalping

Scalping is a trading strategy that involves making multiple, relatively little profits from a large number of deals in the hopes of ultimately realizing a higher overall profit. Scalping is a form of trading that takes advantage of small price fluctuations over short time periods by utilizing huge quantities of liquidity (currency). In most cases, the time horizon is measured in minutes, but it can be as short as a few seconds or as long as many hours.

Technical Analysis

A technical analysis (TA) is a statistical trading strategy. In order to identify patterns in the market, you will need to run a number of different statistical calculations on the historical price data. The practice of technical trading is predicated on the assumption that prices in the past can be used to predict future prices to some extent.

Range Trading

Range trading is based on the idea that crypto prices will usually only move within a certain range over a certain amount of time. If prices move outside that range, it's thought that prices are about to change in an abnormal way. For example, if the price drops below the lower limit of the range, that could be a sign that it's time to sell, assuming it's the start of a big drop.

News and Sentiment Analysis

News and sentiment analysis is a lot like technical analysis, but there is one big difference: it is based on predicting how people will act and react, not how prices will move. With news and sentiment analysis, you look at different sources of information to try to guess whether demand for a certain cryptocurrency will go up or down.

By looking at the sources, you try to figure out what people think about a cryptocurrency and what they will do. This information comes from industry news sites, mainstream news sites, and social media posts.

Using Day Trading Bot for Ethereum

A trading bot for Ethereum is a computer software that allows traders to build a set of automated trading rules and parameters for each trading strategy within a single day. When you run the software, the Ethereum day trading bot will automatically grasp each trading opportunity that emerges depending on your chosen strategy.

You can easily test the most effective automated Ethereum day trading strategies using the Ethereum trading bot to find the one that works best for you. You don't have to be constantly connected and monitoring charts in order to capitalize on profitable opportunities. Everything will be handled by the bot trading algorithms.

Below are some strategies that can be implemented with a Day Trading Bot:

Ethereum Day Trading Bot Strategies

Grid Strategy

A grid trading bot strategy is handy when the market is ranging, the price is going back and forth, and you aren't confident enough to trade manually. Ethereum Grid Bot will automatically place and maintain a grid of uy and Sell orders that are the same size within a specified range.

The sell order is put above the grid level once a Buy order is completed. A purchase order is placed one grid level below if a sell order is executed. Grid Bot runs till it achieves the desired profit or is manually terminated.

Short DCA Strategy

When the markets are trending, you need a Short DCA bot strategy. It is effective in both bearish and bullish markets. ETH DCA bot boosts your chances of success by averaging down your entry point and automatically altering your Take Profit level if the price goes against you. 

While the Long Ethereum DCA bot sets extra purchase orders as the price falls, the Short Ethereum DCA bot makes new sell orders as the price rises. With each order execution, the DCA Take Profit level is modified to reflect the new size and price of your position.

Infinity Trailing Strategy

Infinity Trailing Ethereum trading bot performs well in bullish or bearish markets with strong volatility! It rides strong market swings both up and down by employing Trailing Stop orders to join and exit Ethereum holdings, collecting more upside than simply holding would.

All you have to do is set the Trailing Distance for your entry and exit orders depending on actual and expected volatility. The algorithm will then send Trailing Buy and Trailing Sell orders indefinitely until you manually stop it or your profit objective is met.

Top Ethereum Trading Platforms

• Binance: Binance is the largest cryptocurrency exchange in the world, with a 24-hour trading volume of more than $1 billion USD.
• Coinbase: Founded in 2012, Coinbase is a digital currency wallet and platform where merchants and consumers can transact with digital currencies like bitcoin, Ethereum, and litecoin.
• Kraken: The cryptocurrency exchange and bank; Kraken was established in the United States in 2011. It is believed to be worth $10.8 billion USD.
• Blockchain.com: Blockchain.com is the world’s leading software platform for digital assets. Offering the largest production blockchain platform in the world, blockchain.com is using new technology to build a radically better financial system.
• Kucoin: Kucoin is a digital asset exchange company that was founded in 2017. The company has raised $20 million from investors, including Sequoia Capital, IDG Capital, and Matrix Partners.
• Crypto.com: Singapore-based Crypto.com operates a cryptocurrency exchange and trading platform. The company will have 50 million customers by the end of 2022.
• Huobi: Founded in 2013, Huobi is one of the largest cryptocurrency exchanges in the world. The exchange allows users to buy, sell, and trade a variety of digital assets.
• HitBTC: HitBTC has been operational since 2013, making it one of the oldest exchanges in the space.

Ethereum Trading Tips

• Consider your objectives before establishing daily, weekly, and monthly objectives.
• Choose the strategy and trading platform you want to trade on and educate yourself completely on them.
• Specify your total risk tolerance as well as the amount you're willing to risk on each trade.
• Calculate your risk-to-reward ratio using the risk-tolerance data.

Factors to consider when choosing Ethereum day trading platform

Factors affecting the choices of the Ethereum day trading platform can be categorized into two; Financial and other factors.

Financial factors include:

• Fees: The cost of trading Ethereum varies greatly between trading platforms. Your chosen platform will likely charge you a percentage, some platforms will also provide flat rates.
• Margin: There are trading platforms that provide high margins for trading Ethereum. By doing this, you'll be able to borrow money and maximize the gains from a future trading.
• Account types: Your level of success might be significantly impacted by the kind of Ethereum trading account you have. There are several account alternatives available from many trading platforms. Look for companies that provide customization, competitive spreads, and permit simple withdrawals. Choosing the least expensive account might result in you losing money over time.
• Liquidity: Day traders in the Ethereum market are trying to buy or sell; thus, it's critical to consider the potential liquidity of the Ethereum trading platform.

Other factors include: 

• Trading bots: An Ethereum trading bot could save you a lot of painstaking hours staring at a computer screen. An increasing number of trading platforms offer these automated services, where once you’ve programmed your rules, the bot will do all the rest.
• Customer service: You hurriedly look for a trading platform with 24/7 support for Ethereum trading. Before signing up, read customer service evaluations. Some of these platforms guarantee phone help in minutes or less than an hour.
• Mobile apps: Successful day traders are continually engaged with the market, but they can't always be at their computers. Some  Ethereum trading platforms provide a smart, easy-to-use mobile trading app. When chaos occurs, and the market plummets, a mobile app used on the go may save the day.

Disadvantages of Day Trading Ethereum

It is important to constantly bear in mind that many more monies have also been lost in the cryptocurrency market.  You need to be aware of the two sides of Ethereum's extremely high price volatility. Losing money is something that will happen, not if. If you have a solid plan, you can tell if the loss was disastrous or just unfortunate.

The cryptocurrency market also poses certain special security concerns that are not present in conventional financial markets. You should know the risks associated with centralized cryptocurrency exchange security breaches.

What is Ethereum Classic, and is Ethereum Classic Good for Day Trading?

Ethereum Classic is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality. It provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes.

Ethereum Classic is a continuation of the original Ethereum blockchain - the classic version preserving untampered history; free from external interference and subjective tampering of transactions.

Ethereum and Ethereum Classic have taken varying paths: while Ethereum has grown to be a dominant cryptocurrency, Ethereum Classic has mostly remained unnoticed. The average daily trade volume of the original Ethereum is a tiny portion of the known Ethereum. It is not a well-liked platform for  DeFi services, decentralized applications, or crypto NFT collectables. To put it another way, it has far lower active utility than Ethereum.

Having said that, the price of Ethereum Classic has increased thus far in 2021. It reached a new record high of $167 per coin in May, about the same time as Ethereum reached its own peak, but has since fallen further due to weak fundamentals: Currently, the price of Ethereum Classic is roughly $47 per coin, which is 72% below its all-time high. However, compared to ordinary Ethereum, it has maintained a higher price multiplier over the course of the year.

Conclusion

Day trading Ethereum can be a potentially profitable but risky endeavor. As one of the most widely traded cryptocurrencies, Ethereum offers ample opportunities for day traders to enter and exit positions quickly. However, the volatility of the cryptocurrency market can lead to significant losses if proper risk management strategies are not in place.

It is important for day traders to have a solid understanding of technical analysis and market trends before entering the market. They should also have a disciplined approach to trading, with clear entry and exit points, and a strict adherence to risk management principles.

Furthermore, it is essential for day traders to keep up-to-date with the latest news and developments in the Ethereum ecosystem, as these can have a significant impact on the price of the cryptocurrency.