Is It Possible to Make $100 a Day Trading Cryptocurrency

Countless articles promise that making $100 a day trading cryptocurrency is easily achievable. While it is technically possible to attain such profits, the reality is much more nuanced. Unlike many self-proclaimed “experts” peddling get-rich-quick schemes—often peppered with deceptive calculations—we aim to provide you with a balanced perspective based on years of experience in the cryptocurrency trading industry:

1. Realistic Approach To $100 A Day With Cryptocurrency Trading 
2. Steps To Developing A Daily Winning Trading Strategy (With Further Reading Links)
3. Developing Discipline and Managing Emotions
4. Real-World Trading Strategies You Can Apply Straightaway To Earn $100
5. Choosing the Right Trading Platform To Increase Your Chances For $100 A Day

Discerning Fact From Fiction About $100 A Day Trading Crypto

The internet is awash with articles from dubious sources claiming that making $100 a day from crypto trading is a breeze. Many of these articles employ catchy but misleading mathematical strategies that simplify the intricate world of cryptocurrency trading. The promise of daily returns of 1%, 5%, or even 10% is, unfortunately wholly bogus, and we can debunk this myth with a very simple calculation. If a trader started only with $10 and made 5% daily returns, he would have $131.705.674,71 after a year. This is obviously very far from the truth.

The reality is that according to this research chart by J.P.Morgan, showing the 20-year annualized returns by asset class, an average investor can expect around 3% per year.

So, consistently earning $100 a day through trading is not child’s play; it requires considerable skill, knowledge, and discipline. However, for those willing to invest time and effort, trading can indeed be profitable, especially when investing in cryptocurrency.

According to Goldman Sachs Global Investment Reasearch, Bitcoin outperformed all classic investments in 2022 and gave investors a return of 27%. This suggests that investing in cryptocurrencies like Bitcoin could be an excellent opportunity for substantial returns.

Focusing on a specific amount, like $100 per day, may not be the best approach to start with. It’s essential to understand that trading is a marathon, not a sprint. You’ll experience both winning and losing trades over time, and the key to success is concentrating on your average performance over the long term rather than daily wins.

Of course, there are extraordinary cases that capture our imagination. For instance, Vitalik Buterin, the co-founder of Ethereum, made a staggering 17100% profit on only one dogecoin trade. While these stories are exhilarating, they are outliers and should not set the standard for what you expect from your trades. It’s equally possible to lose everything in just a few poorly executed trades, as in the case of Bill Hwang, who lost $20 billion in just two days. The balance between wins and losses defines your actual trading capabilities.

To ground your expectations, consider orienting yourself around the average percentages that are realistically achievable. For example, as shown in the previous research, holding Bitcoin offered an average annual return of approximately 27% in 2022. More sophisticated strategies, backed by robust research and backtesting, may yield even higher returns. Now that we have cleared out the “$100 a day” approach, let’s explore some ways to help you make a consistent profit trading crypto. Here are some essential steps to consider when crafting your approach to becoming a successful trader and developing a winning strategy. 

Steps to Developing a Winning Trading Strategy

Define Your Trading Goals and Objectives

Before you start throwing your money into the crypto market, it’s essential to have a clear idea of what you’re hoping to achieve. Do you want to make enough money to retire to a tropical island? Or are you just looking for a way to cover your monthly rent? Knowing your goals and objectives will help you make better decisions and avoid getting swept up in the hype. Check our article on “How to Grow A Small Trading Account“; you may find it helpful. It offers actionable tips and insights that can be applied (regardless of whether your financial goals are big or small) to maximize your earnings and minimize risks.

Conduct a Thorough Analysis of the Market

You know what they say: the early bird gets the worm, but the second mouse gets the cheese. In other words, don’t jump into the market blindly just because everyone else is doing it. Take some time to research the market and understand where things are headed. This will help you make more informed decisions and avoid costly mistakes. Browse our feature on “Crypto Portfolio Allocation” for valuable insights. This guide shows a roundup of different crypto investments and strategies for different investment purposes. Basically, after reading it you’ll be able to understand what it takes to achieve optimal portfolio balance to both increase your gains and mitigate risks. 

Select A Trading Style That Suits You

There are many different trading styles, from the lightning-fast pace of day trading to the more relaxed approach of swing trading. Just like you wouldn’t wear stilettos to go hiking, it’s crucial to choose a trading style that suits your personality and goals. So, if you’re the type of person who gets bored easily, day trading might be a better fit for you. But if you’re more patient and prefer a more hands-off approach, swing trading might be the way to go. Read our article “Swing Trading vs. Scalping: Which Is Better?” to help you decide which trading style suits you better. 

Test Your Strategy Using Historical Data

Testing your strategy using historical data will give you a better sense of how it performs in different market conditions and help you make adjustments as needed. A good example of that can be made from the research of Willy Woo, one of the best crypto traders ever: 

“The vast majority of alt-coins are Degenerators. Their price chart has a measurable half-life, like radioactive decay. Plotted on a log chart, it’s a straight line down. This one is Namecoin, a promising coin of its era; there are over 2000 examples like this.”

So, while a coin might seem very promising, it is essential to backtest your strategy to see if it works so you’re not caught in the fake narratives of pump and dumps of the crypto market. In the best case, you see that your hypothesis is not working well and adjust. In this case, seeing that so many altcoins are actually not going to the moon but rather to 0, you might profit from shorting overhyped coins.

Remember to always test and adjust along the way, as past performance is no guarantee that the strategy will work in the future.

Monitor and Review Your Trading Strategy Regularly

Regularly monitoring and reviewing your strategy will help you quickly catch any red flags and adjust as needed. Plus, staying on top of things is good practice – you don’t want to wake up one day and realize you’ve been wearing your shirt inside out for the past week. 

Developing a Winning Trading Strategy Is a Continuous Process

If there’s one thing we’ve learned from the market, things can change on a dime – that is especially important in trading.

“In trading, always remember that Hiroshima and Nagasaki were destroyed in a Day.”

That’s why developing a winning trading strategy is a continuous process that requires ongoing research, testing, and refinement. Think of it like a relationship – you can’t just set it and forget it. You must put in the time and effort to keep things running smoothly. But if you do it right, the payoff can be huge. 

In fact, research by Blackrock, the biggest Asset Manager on the planet, shows that not investing is risky. From lots of personal experience, we suggest not confusing trading and investing with gambling. Because if you approach it the right way, in a disciplined way, it can be a great source of income.

Developing Discipline and Managing Emotions: The Hidden Secrets of Success

Before we show you some crypto trading strategies, we want to stress that you must at all times approach investing and trading with a disciplined approach. It’s not about having an IQ of 160; it’s about discipline and self-control. You need to have a solid knowledge base and understanding first, and then the power of critical evaluation to know when to act and sit back. In other words, “inactivity is doing something” and “buy and hold” should be taken with a grain of salt, as blindly following those mantras without careful consideration can lead to a portfolio that’s as flat as a pancake. 

We’re not saying you shouldn’t have strong opinions or never take a risk, but you must keep those emotions on a loose leash. As traders, mastering our emotions and sticking to our trading plan is crucial. As Benjamin Graham, the godfather of value investing, said:

“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioural discipline that are likely to get you where you want to go.”

Benjamin Graham

It’s the difference between growing as a trader or ending up burnt. Emotion and psychology are significant pitfalls, leading to holding onto losing positions and refusing to exit winning ones. We’ve all been there, watching that price tick upward and thinking it will continue forever. But experience is the best guide, and recognizing and avoiding emotional trading is key to long-term success. Explore our in-depth article on “Trading Psychology” for a wealth of knowledge. We go into much more detail there to give advice on how to manage your emotions, develop discipline, and fine-tune your risk management to achieve better results in your trading endeavours.

Not relying on emotions but trusting the data can benefit you enormously. Here is a great example of emotions vs. data. Jarvis Labs has created a great study comparing various simple buying and selling strategies according to the “Fear and Greed” Index. The study concludes that buying when the Fear and Greed Index is below 10, which occurred only 14 times between 2018 and 2022, gives a phenomenal Sharpe Ratio of 8:

“What you may also notice is the first strategy, which is the short-term strategy (buying below Fear and Greed Index 10 and selling above 35), performed the best with 14.6% returns annually on average. And a cumulative return of 133.4%. It also has the lowest max drawdown risk at -25.3%.”  

So remember folks, developing discipline and managing emotions are the hidden secrets of success in investing. Now, let us review some other strategies you might apply directly and start trading. 

Real-World Strategy Examples You Can Apply Straightaway

The possibilities for trading strategies in the cryptocurrency market are endless, limited only by your imagination and understanding of market dynamics. However, if you’re new to this realm and don’t know where to begin, don’t worry—we’ve got you covered. Below, we outline two very accessible strategies to start your trading journey.

How Should a Beginner Approach the Strategies?

In the initial stages of cryptocurrency trading, you should rather focus on simple and straightforward strategies and use little capital. You can either use the Fear & Greed study above or start with “Strategy 1: Trading the Trend with Heikin Ashi Candles,” which we will cover below. Both can be readily implemented by beginners. Both offer a simplified entry point to market dynamics, utilizing basic indicators and chart patterns.

As one gains familiarity with fundamental indicators, one can advance to more complex strategies. One such example is the strategy we provided below: “Strategy 2: Spotting Reversals and Shorting the Cryptocurrency Market”. This strategy incorporates multiple indicators such as Bollinger Bands and Relative Strength Index (RSI) and specific candlestick patterns for market entry points.

It’s important to note that these strategies should not be viewed as infallible methods for guaranteed profits; rather, they serve as foundational examples of what is attainable. These are merely starting points aimed at facilitating your understanding of the dynamics within live chart scenarios. The ultimate objective is the cultivation of your own trading theories and strategies through a cyclical process of trial, assessment, learning, and adjustment. So go out there, and create your own – because that is what trading is ultimately about! 

Strategy 1: Trading The Trend With Heikin Ashi Candles

You might already know what Heikin Ashi Candles are; however, if not, it is wise to use them for your momentum strategies. Heikin Ashi mostly helps you to identify and trade momentum trends. Unlike traditional candlestick charts, Heikin Ashi candles serve as sort of a “Moving-Average” of charts, making them better suited for swing trading, aka. Trend following strategies instead of quick trading decisions.

By analyzing the chart example below using Heikin-Ashi candles, we can identify two clear trends: a downtrend and an uptrend. The colour of the Heikin-Ashi candles remains consistent over a given period, providing an indication of potential trend reversals when the colour changes. Additionally, changes in the size of the candles and shadows offer further insight into possible market movements. So, overall, they might be a great addition to your arsenal when trading momentum strategies. 

To effectively use Heikin Ashi candles for swing trading, it is important to follow certain rules to identify trends. The following rules should be kept in mind:

1. A trend begins with a big real body candle, typically after a period of consolidation or sideways trading with doji candles.
2. For an uptrend, the candles should not have lower shadows. Conversely, for a downtrend, the candles should not have upper shadows.
3. The trend loses momentum or ends when the candles become smaller, and shadows appear from both sides.

On the Heikin-Ashi chart, you can clearly apply all the trading rules discussed earlier. The downtrend is confirmed with a big red candle without an upper shadow, followed by multiple similar candles. This is always the point when you should get into the trade. Then, it’s time to monitor the candles closely. Finally, we exit the trade once the candles become smaller and shadows appear on both sides. However, you cannot apply the same rules on the chart with normal candles as it is filled with green candles in between.

The same rules apply to the other two downtrends shown on the chart above. By trading simply by looking at the Heikin-Ashi candles, you could have made three easy and profitable trades. The first short would have given you around 13%, the second short around 23%, and the last one a whopping 34%. You could have made an even bigger profit on such an easy strategy with leverage.

Strategy 2: Spotting Reversals And Shorting The Cryptocurrency Market

This more sophisticated strategy utilizes multiple indicators to make more informed decisions. Specifically, we combine Bollinger Bands, the Relative Strength Index (RSI), and the Fear and Greed Index.

• Bollinger Bands help you understand whether a coin is overbought or oversold.
• RSI provides an additional layer of data, allowing you to confirm the signals you’re getting from the Bollinger Bands.
• Candlestick Patterns provide visual insights into market trends and trader sentiment. They complement other tools like Bollinger Bands and RSI, helping you make more nuanced trading decisions. It’s like the perfect addition to gauge entry and exit points into the charts. 
• Fear and Greed Index helps you gauge market sentiment, letting you know if traders are too fearful or too greedy.

This trading strategy applies to almost any cryptocurrency and relies heavily on the Bollinger Bands indicator. However, timing the market can be challenging, and false signals can occur, so we must use additional indicators such as the RSI and the Crypto Fear and Greed Index and look for Candlestick Patterns to confirm our hypothesis.

Suppose we consider the example of Bitcoin’s bull run in November 2021. The RSI was overbought at above 70, suggesting a top may have been reached. However, this is only one indicator, and other signs of an overheated market must be considered.

We also looked at the Crypto Fear and Greed Index, which showed a value of 75, only 9 points away from its all-time high. This high value indicates that the market sentiment was extremely positive, and traders were likely too bullish. These indicators suggested that the bulls were losing steam, and it might be time to start looking for the right candlestick patterns.

In cases where the market has gained over 100% in the prior months, like Bitcoin or other cryptocurrencies, using Bollinger Bands can be a helpful strategy. When the candles got out of the upper side Bollinger Bands, it can best confirm a clear entry position for a short.

Finally, we might start looking for entry points if all indicators show a potential trade. A great way of spotting entry points is to look for candlestick patterns forming. Professional traders often use candlestick patterns to enter and exit trades according to specific candlesticks on the charts. If you are interested in all the different possibilities, you should read our comprehensive guide on Candlestick Patterns, to know all the formations and details. So, for now, we hope to spot a bearish candlestick pattern that might pinpoint a great entry point for a short position.

In this case, we identify an Evening Star Pattern forming. We wait for the third candle to confirm before entering the position and going short Bitcoin. In this case, we would have been able to correctly identify the top of the bull market using this indicator, giving you almost 80% profit on your trade-in the longer run.

Trading Rules:

1. RSI overbought 70+
2. Fear & Greed Index High 60+
3. Identify Reversal Candlestick Pattern (Here: Evening Doji Star)
4. Wait for the third candle to confirm  
5. Go Short

Choosing The Right Trading Platform: What To Consider

Picking an apt trading platform is pivotal for achieving success in the fluctuating realm of cryptocurrency trading. Your chosen platform, be it Metatrader 4, TradeStation or Tradingview, should align with your trading strategy. If you only want to buy and hold coins, you should focus more on very simple platforms that are created specifically for that. If you want to trade daily, you will need a much more sophisticated platform to suit your needs and your trading style. Here are some important factors to weigh:

Tool Range and User Interface: For active traders, a platform with a comprehensive and user-friendly interface is essential. Such platforms should offer a rich set of trading tools and advanced charting capabilities. Being able to trade in diverse markets at any time, including weekends, is an added bonus, ensuring you can seize market opportunities whenever they arise.

Fee Structure: Low fees are crucial, especially for traders targeting daily gains. Zero or low fees can significantly affect profitability when engaging in frequent, smaller trades.

Leverage and Market Flexibility: Look for platforms that can go long or short on various markets coupled with leverage options. This enhances your ability to capitalize on market conditions, whether bullish or bearish.

Security: Arguably one of the most important factors, security protocols should be rigorous. The best platforms offer enhanced security features and the ability for you to hold your own keys. This is crucial because, as events with certain exchanges like FTX have shown, your assets could be at risk if the platform has direct control over them.

Customer Support: Quick and reliable customer service is invaluable in a fast-moving market. Whether it’s a technical glitch or a query about a transaction, having robust customer support can make or break your trading experience.

AI and Automated Alerts: Some platforms incorporate artificial intelligence technology to provide timely alerts on significant market movements or even create full strategies and hand-pick stocks for you. 

If you’re deeply committed to trading, Morpher might just be your platform of choice.

If you’re deeply committed to trading, Morpher stands out as your potential platform of choice—and for good reasons. Not only do we offer commission-free trading and 24/7 access to over 800 markets, but we also equip you with an extensive suite of advanced charting tools powered by TradingView.

And there’s more. By combining blockchain with the latest developments in Artificial Intelligence (AI), Morpher elevates itself as the best platform for trading across financial markets. This fusion of technology ensures you’re not just trading, but trading smartly and securely.

And when it comes to security, it’s not just a buzzword for us; it’s a foundational pillar. With our “your keys, your coins” policy, you wield ultimate control over your assets at all times.

This commitment to excellence is reflected in our Trustpilot rating. The “Excellent” high score is a testament to the trust we’ve cultivated through our unique and reliable trading platform, and our excellent customer support.

We encourage you to explore the amazing tools on our platform for free and see for yourself how easy it is to trade the financial markets with full flexibility.

Conclusion

In the pursuit of achieving $100 a day trading cryptocurrency, a strategically devised approach and tempered expectations are essential. A framework designed by specialized analysts aims to elucidate everyday complexities and risks inherent to this trading sector. Adhering to disciplined decision-making processes is advised for enhanced navigational success in the fluctuating landscape of cryptocurrency. Selecting an appropriate trading platform is a significant factor that can impact overall trading outcomes.

Disclaimer: All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. This post does not constitute investment advice.