Is altcoin daytrading possible?. Published · By KarlVonBahnhof
Image: XMRBTC Chart - Cryptowat.ch
So you are looking into daytrading with altcoins, basically. You want to buy an altcoin and sell it the same day for profit in bitcoin or fiat. Is that possible?
The answer is yes, indeed, but not if market moves rapidly.
Go for less profits
If you want to close your position as soon as possible and with profit, don’t look for huge profit from every single trade. You might find them by coincidence but don’t think twice before jumping into them.
If you see a breakout on bitcoin markets, you check TA indicators and might decide to buy. Your order probably will fill and you will make it safely to your sell at the top.
If you see parabolic growth on altcoin markets chances are it was a single order pump or so. If you buy there might not be enough sellers if nobody trades long term with that particular altcoin (which depends). If you leave that order there it might first execute on the way back down.
Most of the altcoin markets are simply not deep enough yet. If you are okay with holding that coin for a few months you might try things but remember that altcoin prices are very volatile. You will either go with your money in an altcoin stuck for a few months or you sell that altcoin and lose big.
Daytrading is the legwork and it also means you don’t want to hold that altcoin.
Let’s see the title picture for illustration. It shows the recent altcoin crash that indeed also affected Monero. Monero started dropping with what looked like a single sell-off. Opportunity for a daytrader?
Monero has relatively mid to big trade volume and quite some stable audience. A daytrader should buy as low as possible right after the dip (that was at about 0.00275 BTC) and wait for correction. Correction topped at some 0.00321 BTC.
Buy: 1 BTC, at 0.00275 ~ 362 XMR after fee 0.25% Sell: 362 XMR, at 0.00321 ~ 1.16144 BTC after fee 0.25% Profit ~ 16%
Where to do this?
You need a good altcoin exchange with real liquidity. That’s only Poloniex these days.
Poloniex is a full altcoin exchange, you won’t be able to withdraw cash directly though they do have tether. Tether is altcoin that is pegged to USD and linked to a bank account. To obtain a tether address one has to go through full identity verification. More here
A major drawback to Poloniex is that their website is not stable enough for the fact that everyone trades there. During major sales or volatility it will be down or at least cranky.
For these cases it might be better to also have account on Bleutrade, a much smaller exchange that also trades many relatively unknown altcoins.
Big names only
If you are only interested in more capitalized altcoins, go for what used to be known as “bitcoin” exchanges.
Their liquidity is OK, UI better than the one of Poloniex but remember that Kraken will collapse under heavy load that comes with every major BTC event.
For charts head over to Cryptowatch.
Bitfinex and Kraken will also let you withdraw fiat, unlike Poloniex.