Cryptocurrency Day Trading in the UK

Last Updated October 8th 2020

Cryptocurrency Day Trading in the UK: Strategies and Tips

Cryptocurrency day trading in the UK is a dynamic and potentially profitable venture. Here is all you need to know about crypto day trading, day trading strategies and tips, and how to start cryptocurrency day trading in the UK.

Cryptocurrency Day Trading in the UK: Introduction

What Is Cryptocurrency Day Trading?

Why Are Cryptos Great Day Trading Assets?

Why Day Trading in the UK?

Is Cryptocurrency Day Trading in the UK for You?

Can You Make Money by Trading Cryptocurrency in the UK?

How to Start Crypto Day Trading in the UK?

Are There Any Crypto Day Trading Rules I Should Know About Before I Start Trading Cryptos in the UK?

Cryptocurrency Day Trading in the UK & Crypto Day Trading Strategies

Most Popular Cryptocurrency Day Trading Strategies

1. Swing Trading

2. Market Corrections

3. Scalping

4. High-frequency Trading (HFT)

5. Range Trading

6. Steady Incremental Profit Accumulation Strategy (SIPAS)

7. Stop-loss Hunting

Cryptocurrency Day Trading Tips

Best Cryptocurrencies to Start Day Trading in the UK

1. Bitcoin

2. Ethereum

3. Ripple

4. Litecoin

5. Bitcoin Cash

Cryptocurrency Day Trading in the UK: Fees and Regulations

What Is the Best Cryptocurrency Exchange for Day Trading in the UK?

Cryptocurrency Day Trading in the UK: Conclusion

Cryptocurrency Day Trading in the UK: Introduction

Are you interested in cryptocurrency day trading in the United Kingdom? Are you looking for crypto day trading strategies and tips? Whether you are a beginner or an experienced trader, then this is the right place for you!

That’s right! Even beginners can master the complexities of day trading in the UK. After all, you don’t have to be a blockchain developer or a Bitcoin miner to agree that cryptocurrencies have transformed the world of finance and are worth investing in.

Crypto day trading is one of the most popular trading styles across the globe, particularly in the UK. No, that’s not surprising; the UK has always been a buzzing trading hub that attracts traders and investors from all over the globe!

You don’t have to be in the UK to develop a successful crypto trading strategy, though. Simply sign up for one of our online crypto courses from anywhere in the world and start your crypto trading journey today!

What Is Cryptocurrency Day Trading?

Cryptocurrency trading has taken the financial world by storm. There’s no doubt that cryptos like Bitcoin, Ethereum, Ripple, and Dash are some of the major players with huge trading volumes per day.

Before we start talking about crypto day trading in the UK and cryptocurrency day trading strategies, however, let’s explore the world of crypto trading. Without a proper understanding of the market, there’s no way to develop a successful strategy and eventually make a profit over time.

So what is crypto trading? Crypto trading is defined as the buying and selling of cryptocurrencies. Traders can trade coins dominated in fiat money or trade one crypto against another.

Day trading, specifically, refers to buying and selling assets within a single day, which means that even seconds play a crucial role in this form of trading. Though you don’t have to trade every single day, day trading requires a lot of flexibility, attention, and consistency.

Why Are Cryptos Great Day Trading Assets?

Day trading or intraday trading is a common practice across different financial markets, with cryptos being among the most suitable assets for day trading. Why are cryptocurrencies so popular among day traders in the UK and the rest of the world, though?

It’s simple! Cryptos are highly volatile and influenced by demand and supply principles, which makes them great day trading assets. Volatile? Correct! Volatility is defined as a measure of price fluctuations. Like a see-saw, up and down all the time!

To put it simply, crypto day trading is popular among traders as prices fluctuate significantly, which is a great opportunity to potentially make a profit. Some cryptos may increase or decrease by over 10% in a single day.

Trading cryptos is also an exciting way to diversify your portfolio. There’s no need to hold your cryptos for ages and miss out on trading opportunities.

Oh, and let’s not forget that most cryptos are based on blockchain technology, which has the potential to revolutionise transfers and online safety far beyond the financial sector. Though traders don’t have to understand the technology behind cryptocurrencies in detail, they should know that blockchain technology and features, such as decentralised apps and smart contracts, can be used in medicine, gaming, voting, and many other fields.

Why Day Trading in the UK?

Now when we know what cryptocurrency day trading is and why cryptos are a big thing, let’s focus on crypto day trading in the UK.

Why should you start day trading cryptos in the UK? That’s an easy one! The UK has always been one of the most influential financial centres in the whole world. 

Though online trading allows people to trade from anywhere in the world without having fixed hours or a micromanaging boss, the UK is a real financial paradise for traders. Given that the UK is a buzzing trading hub, it’s no surprise that traders have different investment options, with crypto day trading being one of them.

Here we should note that some banks in the UK are also crypto-friendly, which is another reason to trade cryptos in the UK.

Is Cryptocurrency Day Trading in the UK for You?

From Australia to Slovenia, crypto day trading is a popular venture. Cryptocurrency day trading in the UK, in particular, is a great way to start trading and potentially increase your wealth. 

Yet, being based in the UK is not enough to start trading cryptos.

Ask yourself if crypto day trading in the UK is the right thing for you. Trading cryptos is not a hobby. It’s a serious business that requires a lot of knowledge, practice, and strategies to predict the market, as well as news-based price fluctuations and potential opportunities. Day trading is all about dynamic moves and short-term gains.

 Though cryptocurrency day trading in the UK is a lucrative financial option, one needs to consider the following cryptocurrency day trading tips:

  • Invest in proper education to understand how the market works.
  • Understand the lingo in order to become a pro.
  • Choose a reliable broker and a user-friendly platform to help you trade better.
  • Identify a pair with good volume and liquidity to facilitate quick trades.
  • Learn to read charts. Focus on technical analysis, chart patterns, and risk management.
  • Follow the crypto news because they can affect the crypto market significantly.
  • Devise a trading plan based on realistic expectations.
  • Practice to establish an effective strategy and risk management steps.
  • Embrace financial losses and trading risks.
  • Be consistent and disciplined to succeed.

Can You Make Money by Trading Cryptocurrency in the UK?

cryptocurrency trading in the uk

Do you think that cryptocurrency day trading in the UK is for you? Yes?! Great! 

That leads us to another important question. If crypto day trading is for you, can you make money by day trading cryptos in the UK?

The answer is Yes… but you can also lose a lot. As explained above, numerous factors affect crypto trading, including crypto news, demand and supply, regulations, and so on and on. 

Moreover, cryptocurrency day traders should invest a lot in ongoing training and self-discipline in order to make a profit. Navigating the crypto market in the UK might be exciting but also emotionally exhausting. Dealing with high volatility, unclear global regulations, and potential losses can be stressful: an obstacle to crypto day trading success.

That said, if a trader develops a consistent strategy, effective risk management, and sufficient self-control, they have the potential to increase their wealth.

No, we are not saying you can turn back time and become one of the early crypto kings and adopters of cryptocurrency. We are just saying that if a crypto day trader works hard, they can see their money grow. One should simply invest in ongoing education and practice to increase their wealth over time!

Here we should note that there are different ways to make money in the crypto world, with cryptocurrency day trading being one of them. From staking and mining to eardrops and long-term investing, the crypto market in the UK offers exciting opportunities to eventually make a profit with cryptocurrency. Interested in staking? Then learn more about the difference between Proof-of-Stake and Proof-of-Work here

In the world of cryptocurrency, you can even make some money by creating social media content and watching ads.

After all, despite the high volatility of cryptos and their ups and downs, there’s a consistent growth in the industry. Crypto day trading isn’t going anywhere, so it’s up to you to embrace its challenges and potentials.

How to Start Crypto Day Trading in the UK?

If you think you have the guts to start crypto day trading in the UK, then let’s look at its peculiarities. What do you need to become a successful cryptocurrency trader?

First, you should decide if you want to own a crypto or speculate on its price. One can either buy a crypto or start trading Contracts for Difference (CFDs). If you decide to buy an asset and store in a wallet on an exchange, that means you actually own the asset. If you decide to trade CFDs via a broker, that means you don’t own any assets but you have the right to the difference in their prices instead. 

A crypto day trading exchange or a CFD?? It’s up to you. But don’t forget that trading CFDs is ideal for day trader beginners. And remember that, as stated above, choosing a reliable broker and an easy-to-use platform are crucial to crypto day trading success.

Then, it’s time to decide on a crypto pair. Note that when more buyers buy a pair, its price will rise, and vice versa. You can choose between crypto-to-fiat (usually USD) or crypto-cross pairings (more suitable for experienced traders). 

Believe it or not, there are thousands of altcoins out there, so do your research to choose the best cryptos to invest in and avoid crypto scams and frauds. As some cryptocurrencies are worthless for day traders in the UK, it’s better to stick to major players, such as Bitcoin, Ethereum, EOS, or even IOTA. More on the topic in a bit!

After that, you just have to fund your account and open a trade. 

Here we should note that risk management orders are among the most important orders to set up. Imagine you want to trade a crypto-to-fiat pair. If you buy an order at £5,000 but don’t want to lose more than 10% of it, you’ll have a stop-loss order at £4,500. If things don’t go well and the value of your pair goes down to £4,500 the broker will exit on your behalf.

If you think you need some more time to practice crypto trading, consider a demo account.

Are There Any Crypto Day Trading Rules I Should Know About Before I Start Trading Cryptos in the UK?

The good news is that crypto day trading in the UK is not like stock or forex day trading at all. The crypto market is open 24/7 and allows you to trade crypto part-time.

You can’t sleep? Then trade Bitcoin early in the morning or at night! Your children are away? Make your weekend productive and buy Tezos, one of the best cryptos to buy this month!

Unlike stock trading, crypto trading allows you to go either long or short. 

The opportunities are simply impressive, there’s so much flexibility, The best part is that there are no pattern day trading rules, so you don’t need a fortune to start day trading cryptos in the UK. You can also buy and sell as many cryptocurrencies you want every single day.

And guess what? You don’t need special equipment to start day trading cryptos in the UK. There’s no need for special monitors to track different cryptocurrencies at once. You can simply use your smartphone. How cool is that!

Cryptocurrency Day Trading in the UK & Crypto Day Trading Strategies

If you are ready to dive into the world of real crypto day trading in the UK, it’s time to establish a profitable strategy. As stated above, knowledge, practice, and self-control play a crucial role in reaching day trading success. Embrace the volatility of the market and be prepared to lose before you win. 

That’s right! A positive financial mindset is a part of a successful crypto day trading strategy. To control your emotions while trading means to succeed.

 To devise a successful crypto day trading strategy, though, traders need to account for various indicators. One of the most beneficial tools is technical analysis data, including Bollinger Bands, Moving Average Convergence Divergence (MACD) indicator, Relative Strength Index (RSI), and Money Flow Index (FMI). 

bollinger bands diagram 

Bollinger Bands (Source: StormGain)

 MACD diagram

MACD diagram (Source: StormGain)

rsi diagram

RSI indicator (Source: BuyShares)

MFI diagram

MFI indicator (Source: Trading Strategy Guides)

 

Following the news, tech announcements, and even gossip is also a great weapon to help you win the battle of cryptocurrency day trading in the UK.

Most Popular Cryptocurrency Day Trading Strategies

Now when you know what you need to start day trading cryptos in the UK, it’s time to establish a profitable trading strategy and an enjoyable trading style. Though there’s no one-size-fits-all strategy, some of the most popular day strategies that traders in the UK can consider are:

  • Swing Trading

Swing trading is a suitable cryptocurrency trading strategy for both beginners and experts. Swing trading is a mixture of day and position trading; it’s a strategy in which traders focus on new trends and corrections. Note that swing traders might keep a position open for a few weeks, which is quite different from day trading.

  • Market Corrections

When it comes to trends and corrections, we should mention that using market corrections is an important strategic move that cryptocurrency day traders in the UK may consider. When a trend is temporarily halted, a trader may jump in and take advantage of a more discounted value, while waiting for the trend to return to normal.

market corelation diagram

Market Corrections (Source: BuyShares)

  • Scalping

Scalping is another popular cryptocurrency day trading strategy among UK traders. It focuses on many small price fluctuations throughout the day. Interestingly, many scalpers use leverage which can amplify wins as well as losses. No wonder why many beginners stay away from scalping! Note that according to data, the European Securities and Markets Authority (ESMA) allows UK brokers to apply leverage of 1:2.

  • High-frequency Trading (HFT)

When it comes to scalping, we should talk more about high-frequency trading. This type of scalping often requires the development and monitoring of different algorithms and crypto trading bots to execute trades frequently. We are talking milliseconds here!

  • Range Trading

Range trading is another useful crypto day trading strategy.  It involves the use of support and resistance levels and candlestick chart data to understand price ranges. It’s pretty straightforward, so it’s suitable for beginners.

  • Steady Incremental Profit Accumulation Strategy (SIPAS)

This strategy is ideal for beginners who aim to minimize volatility-related risks and ensure steady returns. Usually, traders using this strategy aim for 1-2% returns to avoid big losses. It also helps crypto traders focus on more stable coins, including the popular stablecoin Tether.

  • Stop-loss Hunting

Though this strategy is for the crypto whales in the industry, it’s good to know what stop-loss hunting is all about. It involves selling large amounts of a coin to push prices down. Then the whales buy the discounted cryptos, which results in price recovery and profits.

Cryptocurrency Day Trading Tips

So which cryptocurrency day trading would you choose? To help you establish a strategy and succeed in crypto day trading in the UK, here are some additional cryptocurrency day trading tips to consider:

  • Once you’ve acquired enough knowledge about crypto day trading and strategies, it’s time to start practicing
  • Learn to read charts in order to filter market noise from market edges. Learn how to identify data that indicates a signal shift in the market sentiment, for example.
  • Do not overdo your charts with trendlines, RSI, support-resistance levels, and other indicators that can distract you unnecessarily. Choose something that works for you!
  • Set clear goals and clear time limits to enter and exit a trade. Be consistent in following your entry and exit plan, as well as your stop-loss and take-profit limit orders.
  • Stay tuned in and invest in easy-to-use apps and software. Note that automated software is suitable for experienced full-time day traders. 
  • Whether you are a beginner or a pro, make sure that the trading platform you are using is secure and your money is safe.
  • Master the psychology of trading to learn how to deal with losses and wins. It’s worthnothy that losses can lead to revenge, while wins to overconfidence and greed.

Best Cryptocurrencies to Start Day Trading in the UK

When it comes to cryptocurrency day trading tips, day traders in the UK should also have a clear understanding of the different cryptos out there. So as promised, here are the best cryptos in the UK for your day trading strategy! 

With thousands of cryptocurrencies, choosing the best cryptos to start day trading in the UK might be tricky. Especially for beginners!

When choosing an asset to day trade, one has to identify its potential, market sentiment, and tech challenges. That’s right! Following the news can help you stay ahead of the game.

Though there are numerous undervalued coins with some great potential, let’s not forget that some of the most popular cryptocurrencies among day traders in the UK are:

  • Bitcoin

Bitcoin is the oldest virtual coin, a crypto that perhaps will never go out of fashion. Being the first crypto, Bitcoin - the king of crypto day trading - will always be remembered as the phenomenon that revolutionised the whole world of finance. Do we need banks? Do we need the middlemen? Bitcoin has made us rethink our economic system. No surprise that Bitcoin day trading in the UK is one the rise!

  • Ethereum 

Ethereum is another powerful crypto that has transformed our world; a favourite crypto among cryptocurrency day traders in the UK. With the introduction of smart contracts and decentralised apps, Ethereum facilitates much more than payments and transactions. Moreover, let’s not forget that many tokens and games are built on the Ethereum blockchain.

  • Ripple 

Interested in day trading Ripple in the UK? Well, Ripple is a great choice. Some day traders prefer Ripple over Ethereum! Ripple aims to make transactions faster and cheaper, so it has become a powerful payment network for financial institutions. Ripple is also highly volatile, which makes it a great asset for day trading.

  • Litecoin

Despite the strong competition in the UK cryptocurrency day trading market, Litecoin is another wonderful asset to trade. Its high liquidity and large market cap make it an attractive option among crypto day traders. In fact, Litecoin is one of the top cryptos to invest in 2021.

  • Bitcoin Cash

Bitcoin Cash day trading is another popular financial endeavour in the UK. No, dear day trader, Bitcoin Cash is not Bitcoin. Bitcoin Cash is a hard fork of the original Bitcoin that developed different rules. Some crypto millionaires strongly support Bitcoin Cash, which makes it a popular day trading asset.

If you are not sure what crypto pair to choose for your day trading ventures, do not worry! There are no right or wrong pairs to trade. It all depends on you. Do you want to trade cryptos against fiat money? How well can you handle risks? So many questions to ask yourself.

Cryptocurrency Day Trading in the UK: Fees and Regulations

cryptocurrency regulation in the uk

While crypto day trading in the UK is a lucrative business that can potentially lead to profits over time, day traders shouldn’t forget that hidden fees and unclear regulations may play a bad joke on their cryptocurrency day trading strategies and goals.

As a day trader in the UK, you should be familiar with commission rates and fees, including exchange rates, trade fees, and deposit and withdrawal fees.

In the UK crypto day trading scene, other non-trading fees may also apply, including overnight financing and monthly fees for inactive accounts. Such fees may not apply to day trading accounts but it’s something important to know.

Make sure you are using a regulated CFD broker, such as eToro, instead of an unregulated exchange. We should note that brokers in the UK are licensed by the Financial Conduct Authority.

Though crypto regulations around the world are pretty unclear, HM Revenue and Customs in the UK are quite active in ensuring that traders are paying tax; exchanges might be contacted regarding their UK customers.

Data show that there’s no tax on buying crypto, but sales and exchanges of cryptos are subject to Capital Gains Tax. Note that Capital Gains Tax is paid only over £12,000 in returns.

When trading CFDs and futures, on the other hand, things are different. If one is a financial trader, then they have to pay income tax; if they are not, the situation is not clear. 

Spread betting, on the other hand, is the only tax-free trading option in the UK. 

Make sure to do your research before you start day trading cryptocurrencies in the UK!

What Is the Best Cryptocurrency Exchange for Day Trading in the UK?

And now when you know so much about cryptocurrency day trading in the UK and day trading strategies and tips, we want to give you a final tip for your crypto flying start. 

If you are wondering what the best cryptocurrency exchange for day trading cryptos in the UK is, then consider eToro.

Given the fact that eToro is one of the largest trading platforms across the world, it’s no surprise that many day traders in the UK are crazy about its services. The good news is that its UK arm is regulated by prestigious authorities.

When it comes to crypto day trading on eToro, day traders can either buy an asset or trade CFDs. And guess what?! With eToro, you can trade more than 90 cryptocurrencies.

If you’re ready to get started with a cryptocurrency day trading right now, we would suggest exploring eToro. The UK top broker allows you to invest in cryptocurrencies as well as trade fiat-to-crypto and crypto-cross pairs. There are no commissions to pay and you will benefit from the regulatory safeguards of the FCA.

So, what are you waiting for? Explore eToro’s online trading platform, consider risks, and start day trading cryptos today!

eToro – Best Cryptocurrency Day Trading Platform in the UK

etoro broker

Cryptocurrency Day Trading in the UK: Conclusion

  • The cryptocurrency market is a lucrative market that is open 24/7 to people from all walks of life. 
  • Crypto day trading, in particular, is a common style in the UK as it allows traders to buy and sell cryptos within a single day. 
  • It’s easy to open an account and find crypto day trading tips; you can start trading cryptos with as little as £100 from the comfort of your own home.
  • To develop a profitable day trading strategy, though, one has to invest in training education and self-discipline first. In fact, being consistent in your risk management and trades is crucial.
  • Some of the most popular crypto day trading strategies among traders in the UK are scalping, swing trading, and range trading.
  • Crypto day traders should master how to use technical analysis and chart patterns data and stay tuned in with the latest news in the crypto world.
  • Day traders in the UK should also choose a crypto pair to trade on their way to success.
  • Consider cryptocurrency market's liquidity and trading volume before you start to day trade
  • Other considerations to help you succeed in day trading in the UK are software usability and security, fees and commissions, and tax and regulations.

We at Trading Education can help you master the complexities of cryptocurrency day trading in the UK in order to develop an effective crypto day trading strategy. Sign up for one of our online courses to access high-quality structured information and more crypto day trading tips.

Do you think that crypto day trading in the UK is for you? What day trading strategies would you use? What other helpful tips can you share with us?

If you liked our article Cryptocurrency Day Trading in the UK. Cryptocurrency Day Trading in the UK: Strategies and Tips, please give it a like and share with your fellow day traders.

Top Brokers in
    All Regulated Brokers

    more from Cryptocurrency Trading Articles...

    Can You Make Money Trading Cryptocurrency In Australia? Are you looking to make money in the cryptocurrencies market in Australia? Maybe you are...
    Why You Should Start Investing in the Cryptocurrency Market Today Explained Top 15 Reasons to Invest in Cryptocurrencies: Introduction Is crypto a...
    Trading Education Picks the Top 5 Altcoins to Trade in 2021 Best Altcoins to Consider in 2021 Wondering what are the best altcoins to look at in...
    Top 10 Cryptocurrencies In 2021 Planning to buy or invest in cryptocurrencies in 2021? With more than 7,000 cryptocurrencies, choosing the best...
    Looking for cryptocurrencies you can buy and sell in GBP? Read on. In this article, we’ll explore 5 different cryptocurrencies traded in...