Sun Token (SUN) is known as the most volatile crypto for day trading because of its rapid price changes. It had a volatility index of 56.62% over the last 30 days. Trading SUN is risky but can also be very rewarding. If you're thinking about trading volatile Tokens, it's important to keep a close eye on their price swings and use predetermined stop loss and take profit orders.
Cryptocurrencies are volatile by nature, and this represents both a great chance and a problem for day traders. The prices of digital currencies such as Bitcoin, Ethereum, and others can significantly increase or fall over relatively short periods, which can cause large gains or losses. Market sentiment, technological developments, regulatory news, and macroeconomic trends are also factors that contribute to pushing the levels of volatility in cryptocurrencies high, making it one of the most interesting markets out there.
Day trading is simply the practice of leveraging short-term market movements to buy and sell without ever holding any trades overnight. This allows for very rapid, large fluctuations in price to be taken advantage of, just the sort of thing that is always happening with cryptocurrencies. You need to actively learn about market mechanics, be quick in making decisions, and strictly follow disciplined trading strategies. The rapid-fire trading environment makes being vigilant a must, capitalizing on opportunities as market conditions change quickly and often.
In this PlasBit article, we will explain that day trading is possible, especially with the high volatility of cryptos, but be cautious as it carries considerable risk. Unpredictable prices that can increase profits can also cause similarly large failures. Therefore, traders need to use strong risk management, such as placing stop-loss orders on their trades and diversifying their selections. While the potential for a large return can be tempting, this should always be weighed against the risk of potentially losing everything.
Other Most Volatile Crypto For Day Trading
The Sun Token (SUN) has become well-recognized for its fast and frequent price movements, but there are other cryptocurrencies with high levels of volatility as well. Below is the list of top ten most volatile crypto for day trading in September 2024.
- Bitcoin Cash (BCH) - Known for quick and large price changes.
- Dogecoin (DOGE) - Price fluctuates with social media trends.
- Ripple (XRP) - Volatile due to news on cross-border banking use.
- Ethereum (ETH) - Price varies with updates in blockchain technology.
- Solana (SOL) - Experiences sudden shifts due to its technical advancements.
- Shiba Inu (SHIB) - Extremely volatile, driven by online hype.
- Dogwifhat - A meme coin on Solana with massive gains due to its meme appeal.
- Ronin - Gaming-related crypto with market swings.
- Quant (QNT) - Inter-blockchain connections cause sharp price changes.
- Verge (XVG) - Privacy focus leads to unpredictable price shifts.
If you are considering trading these or other volatile assets, it is a good idea to set up automated stop-loss and take-profit orders to control potential risks.
Key Principles for Success in Day Trading
Day trading is an active trading strategy that aims to profit from the short-term price movements of an asset. Day trading involves selling and buying a financial instrument on the same day, capitalizing on small price movements rather than long-term investments. Trading in this environment requires a clear understanding of market movements, fast decision-making, and strict discipline with targeted trading strategies.
Technical Analysis
Technical analysis is a core part of day trading because it forecasts future market movements by analyzing previous data. Various indicators, such as moving averages (MA), the Moving Average Convergence Divergence (MACD), and the Relative Strength Index (RSI), help day traders identify trends and potential reversal points. This analytical method is founded on the belief that market prices move in definable patterns and trends that reflect underlying business models. As a result, many traders have a better chance of finding profitable trade opportunities when utilizing technical analysis properly.
Risk Management
Risk management is essential in day trading because of fast trades. Traders use strategies like stop-loss orders to limit potential losses. This means you can sell an asset if it reaches a certain loss amount. Additionally, smart traders expose only a small fraction of their total capital in any trade and spread the risk by diversifying investments. This step is crucial in protecting trading capital from huge losses and helps maintain a long career as a trader.
Liquidity and Volatility
Liquidity in day trading refers to the ease of entering and exiting trades without significantly affecting price. High liquidity allows trades to be made at competitive prices. On the other hand, volatility measures how much price changes within a given time period. While volatility increases risk, it also offers greater profit potential. Day traders often target these wild price fluctuations to capitalize on them, though it brings much more risk into play.
Leverage and Margin
Leverage is a double-edged sword in day trading, which can magnify your profits and losses as well. While it can lead to huge profits, it also goes hand in hand with the risk of big losses, a double-edged sword indeed. Leveraged trading consists of borrowing money from brokers to buy financial instruments. Although leveraging will increase returns on winning trades, it needs to be controlled to prevent big losses.
Discipline and Strategy
Discipline is the key to successful day trading. Traders need to be strictly disciplined, combining their trading plans with avoiding emotional decisions. Professionals frequently have one trading strategy, which sets out the amount of risk they are willing to take, their target entry and exit points, and under what conditions they will apply certain strategies. Having a trading plan is a necessary approach when trading with the rapid changes in price.
These principles are each a core part of day trading and require a high level of skill and dedication. Day trading can be rewarding, but only if it is done right. Anyone looking to succeed at day trading should master these principles and couple them with ongoing education and market analysis.
Risks of Trading with Most Volatile Crypto For Day Trading
Highly volatile assets can cause problems for both new and experienced traders. Some of the biggest risks when trading these types of assets include:
Price Volatility
Cryptocurrencies are widely known for their price changes, which can be extreme and sudden. Market sentiment, political events, and regulation changes can cause rapid price shifts. While day traders may find plenty of profit-making opportunities in this market activity, it can also be significantly challenging to predict price movements. Not only is it possible to earn huge returns, but volatility can also result in heavy losses if trades are executed poorly.
Liquidity Risks
Liquidity in different cryptocurrency markets varies greatly. High liquidity is vital if you want to trade quickly, at a price close to the market price, without affecting the market. Conversely, low liquidity means there may be slippage, where the actual price of your trade differs from your expectation. As a result, trades may be less profitable or incur higher-than-expected losses, especially during market disruption or when large orders are placed.
Scams and Fraud
In addition to Ponzi schemes, phishing attacks, and straight-up fraudulent ICOs (Initial Coin Offerings), the cryptocurrency world is filled with other less-known scams that you should avoid. Most of these scams feature extremely high returns and very low risk. The anonymity and weak regulatory oversight in many corners of the crypto market have made it a haven for scammers.
Regulatory Risks
The regulatory environment for cryptocurrencies is uncertain, with regulations heavily depending on the jurisdiction. Regulations might change at any time and may have a sudden impact on market conditions, which could greatly affect cryptocurrency valuations. As regulatory changes happen frequently in the crypto market, traders need to be aware of new developments, as this could profoundly impact what and how they trade, as well as how they are allowed to trade certain crypto assets.
Market Manipulation
The volume of trading in many altcoins is so small that traders with larger balances can create a crash. These manipulative practices include wash trading, pump-and-dump schemes, and spoofing, which can manipulate prices and market depth. These manipulations might put traders at a disadvantage, causing them financial losses very quickly.
Security Risks
Despite possessing some built-in security features, blockchain technology has hardly been entirely secure against threats that arise in the cryptocurrency ecosystem, like exchanges and wallets being hacked or attacked. This can result in the funds actually being stolen, whereas blockchains are, by nature, irreversible.
Mitigating Risks
Based on our recent research in PlasBit, to reduce the risks of trading with the most volatile crypto for day trading, traders need to care about:
Stop-Loss and Take-Profit Orders
They are instruments that handle your trades automatically. Stop-loss orders make it so you automatically close your trade at a certain price if things start to go against you, preventing more losses with each tick that goes below what the contracted value was at. Conversely, a take-profit order secures profits after your trade reaches a specific price level.
Risk/Reward ratio
Determine before starting how much risk you are willing to take in comparison to the worth of the reward. A common practice is to target at least double the potential gains as potential losses. It allows you to be a calculated trader instead of a more emotional one.
Manage Your Position Size
As a basic rule, you should only risk a small portion of your total trading funds on any single trade. Most preferably 1% or 2%. Thus, there is no room for huge losses, and you will be able to survive for the long term.
Keep Learning
The cryptocurrency ecosystem is very dynamic, and you need to keep yourself educated all the time. Follow media of recent market trends, news, and tech developments to perfect your trading plans.
While trading cryptocurrencies can be profitable, making money is not guaranteed. It requires a considerable amount of knowledge, strategy, and an understanding of the many risks that come with it. You can't only enter the market optimistically about your earning opportunities but also need a solid plan to manage pitfalls.
Bitcoin Sensible Gains in the long-term vs. short-term Alt-Coin Thrills
Those investing in cryptocurrencies for the long term, like Bitcoin or other altcoins for the short term, will have different winning strategies and outcomes depending on their risk tolerance, investor goals, and market dynamics.
Bitcoin Long-Term Investment
Bitcoin has significant potential if you have the right knowledge and resources. A long-term strategy is often referred to as “HODL,” buying and holding the cryptocurrency in hopes of benefiting from price appreciation in the long run. Over the years, historical data shows that a Bitcoin-only buy-and-hold strategy has typically outperformed diversified altcoin investments and picked up enough steam over long durations to draw significant returns.
Altcoins for Short-Term Investment
Altcoin investing in the short term can be very interesting due to its high probability of success. Day trading, swing trading, and scalping are all different strategies for making fast money out of wild moves in the markets. But, this requires a good knowledge of the market's trend as well as a willingness to take on high risks because altcoins are very volatile and much less predictable.
How are Altcoins different from Bitcoin?
Altcoins almost always provide greater potential returns but are also inherently riskier. They can fluctuate and are often massively affected by changes in the market caused by new technology or regulatory news. On the other hand, many altcoins suffer from lower liquidity compared to Bitcoin, which means they may be more difficult to trade for the highest prices.
Side-by-Side Performance
Some historical performance metrics suggest that altcoins outperform Bitcoin from time to time; this is more prevalent when a specific corner of the crypto industry (like DeFi or NFTs) catches attention. But these 'altcoin seasons' do not last very long.
Should Investors Choose Bitcoin over Altcoins?
Investors should consider their financial objectives, risk tolerance, and investment horizon while deciding whether they should choose between Bitcoin and altcoins. Bitcoin can be more stable and gradually grow in value as a long-term investment, while new altcoin traders might see the potential for huge gains. In general, the choice of looking at long-term investments or investing in altcoins in the short term depends upon individual investor profiles and market conditions. But it also has its own pros and cons, knowing them can be crucial in making informed investment choices.
Case Study: The Rise and Fall of BitConnect
Emergence and Rapid Growth
BitConnect has operated since 2016, giving into the industry with promises of repayments as high as 40%, all thanks to its proprietary cryptocurrency-lending model, where it purported to profit off of trading market volatility. By boasting 40% guaranteed returns each and every month, BitConnect quickly attracted investors to the investment in its own digital token, BitConnect Coin (BCC).
Exposure of Ponzi Scheme & Collapse
Though it looked like a get-rich-quick investment scheme at first glance, BitConnect was essentially a Ponzi. The platform in question made no money from trading but instead operated as a Ponzi scheme, generating returns by paying money from new investors to those before them. In the end, increased regulatory attention and thorough UTX investigations within the community ultimately led to this unsustainable model being unveiled. This caused the price to fall sharply and ultimately result in bankruptcy for the coin in 2018, and users lost an estimated $2.4 billion.
Law and Industry
The founders of BitConnect are suspected of fraud and operating an unlicensed money-transmitting business, because they offered investment schemes where people could participate and receive interest in return. This project pointed out just how wide open the regulatory space was for cryptocurrencies back then and showed the dangers unregulated investment opportunities could cause.
The BitConnect experience is a reminder that cryptocurrencies are still subject to wildly volatile and unpredictable price fluctuations. However, it also shows the need for regulatory frameworks that can adapt to quickly changing financial technologies in order to avoid such scams.
Essential Features of the Best Exchange for Day Trading
The exchange you choose will play an important role in determining how effective and profitable your day trading will be. Especially when trading the most volatile crypto for day trading. The ideal exchange and trading environment for day trading provides low commissions, competitive fees, and security in the same place. In this section, we are going to discuss a few of the important things you will need to look into first before picking up any cryptocurrency exchange for day trading.
Low Fees
Day trading may involve a lot of trades, so it is important to keep the cost of trading low. Choose platforms that have reasonable fee structures since the fees charged can hurt your overall profitability. Some exchanges offer more discounts depending on the trading amount or the trading coins.
Variety of Trading Pairs
The availability of a range of trading will always keep the trader active as it allows him to jump on all possibilities found in every asset. Best exchanges lists a wide range of tokens, allowing day traders to take advantage of the increased volatility in more obscure assets.
Advanced Trading Tools
Day traders rely on advanced charting software and technical indicators. Moreover, support for margin trading allows traders to leverage positions to amplify potential returns, though it also increases risk. Decision-making is informed and swift with these tools.
User Interface and Experience
A nicely designed user interface is key to successful day trading, enabling traders to easily move around the platform and place trades with speed. Many platforms also include customizable dashboards and the ability to set up notifications for specific price movements or trading indicators, which can significantly enhance trading efficiency and improve user experience.
Security
Good security measures are a must. A secure exchange employs multiple layers of security, including two-factor authentication, SSL encryption, and cold storage of the majority of the assets. Ensure the exchange is secure enough and shields traders from cyber threats or hacks.
Regulatory Compliance
Trading on an exchange that meets regulatory standards can offer some stability amongst the counterfeit exchanges everywhere. Make sure the exchange you choose follows regulatory compliance. This ensures your money and personal information are safe. Features like two-factor authentication, cold storage for fund security, and adherence to anti-money laundering (AML) guidelines should be standard.
High Service Levels
An accessible and responsive customer service section is important, particularly for platforms where day trading runs into large trading volumes and highly complex strategies. This can be vital during times of critical trading or if you encounter any technical problems.
It is important to weigh these features when choosing a trading platform based on one's style of trading and particular requirements as a day trader. Selecting the correct exchange can mean success or failure in day trading. Find a platform with low fees and offering different coins pairs to be able to trade the currency of your choice. It is also important that the platform should be easy to use, have solid investment security, and provide reliable customer support for any query or issues you might face. Choosing an exchange that meets all three criteria will give you a higher chance of success in day trading.
Conclusion
In this PlasBit article, we mentioned Sun Token as the most volatile crypto for day trading, and day trading it can offer both opportunity and risk. The market is constantly moving at a very fast rate, so traders need to use technical analyses and real-time data to make decisions. Traders need deep knowledge of market trends coupled with the ability to use that insight to take advantage of price movements.
Risk Management
Risk management is especially important in such a volatile market. One way to avoid issues is by taking a stop loss or, even better, diversifying your investments. Traders should balance the desire for high rewards against the reality of a volatile market, which carries an equal risk.
Finding the Right Platform
Choosing the right trading platform is essential. With many different types of exchanges on the market, you need to make sure you trade in the fastest and most practical way using platforms with low fees that work under current regulations. These features additionally allow traders to implement long-term trades in a manner that is beneficial.
To be a day trader, you have to keep learning and adjusting your strategies based on experience. It is essential that traders stay updated on all market news, regulatory changes, and new technologies. Along with the above tips, being committed to learning and becoming flexible will let traders effectively navigate the framework of the cryptocurrency market.
