I Tried Day Trading Crypto for a Month
I’ve been investing consistently for over 2 years now. As I dove more into the finance world I came across day trading, so I gave it a shot.
Since I knew very little about it, I stood with ADA (Cardano). The goal was to get 3% each day.
I only followed 2 indicators:
- Bollinger Bands (BB) — It provides a relative definition of the high and low prices of an asset.
- Relative Strenght Index (RSI) — It measures the velocity and magnitude of price movements.
The strategy was to buy when prices and volume were on the lower end of the respective indicator and sell at the peak.
As you can see in the image above the yellow circles represent the entry point and the pink circles should be the exit point, for maximum profit.
I started with only $100 and I was able to get to $120. However, I did two mistakes that made me lose money.
The first mistake I did was to set the time frame to only 1 minute. The volume was near too irrelevant to make a consistent profit as the price would fluctuate 1 or 2 cents, only.
In the picture, you might be able to see that the time frame is 4 hours. That means that the volume of trades will be higher and the price will fluctuate even further.
The second mistake was to do this in December. A month where people usually sell their assets in order to Tax-loss Harvest.
The last time I sold was when it bounced back to $1.57, on December 27th. Then it dropped to $1.40 and I thought it would be a good buying price. But it just went downhill from there.
By January 10th, ADA stands around $1.13 and my investment is at $75,87. I won’t sell it until it bounces back, so I guess I am back to swing trading.
Inspired by a fellow creator, I decided to challenge myself to publish 100 short-form articles within January. This is article number 16.
