Day Trading: Crypto

Status: Scaffolded - Content pending Last Updated: 2025-12-11

How Crypto Day Trading Works

Crypto day trading uses the same indicator suite as equities, with a critical difference in time stops since crypto markets trade 24/7.

Data Collection

Data Type	What We Get
Current Price	Real-time snapshot
Historical Bars	7 days of 1-minute candles
Bars to AI	240 most recent bars
Indicators	RSI(14), EMA(9,20), SMA(20,50,100,200), MACD
Market Context	SPY, QQQ + ES Futures

The Critical Difference: Time Stops

Crypto has no market close. The algorithm must use hour-based time stops.

Trade Style	Stock Time Stop	Crypto Time Stop
SCALP	15-30 min	15-30 min
DAY	4:00 PM ET	8-12 hours
SWING	3-5 days	3-5 days

WRONG: "Close by market close at 4:00 PM ET" CORRECT: "Close within 8-12 hours of entry"

ES Correlation Factor

The Wild Card Agent checks S&P 500 futures (ES) correlation:

ES Move	Impact on BTC
ES > +0.5%	Bullish bias for BTC
ES < -0.5%	Bearish bias for BTC
ES flat	No strong correlation signal

This correlation is noted in the trade plan but doesn't override Technical Agent direction.

Analysis Flow

1. Data Collection (7 days, 1-min bars)
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2. Technical Agent analyzes:
   - Full indicator suite
   - Support/Resistance
   - Chart patterns
   - Volume patterns
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3. Macro Agent checks:
   - ES Futures direction
   - BTC dominance
   - Overall crypto sentiment
   - Sector rotation (DeFi, L1, etc.)
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4. Wild Card Agent checks:
   - Exchange issues
   - Regulatory news
   - Whale movements
   - Protocol updates
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5. Supervisor synthesizes:
   - Entry zone
   - Stop loss (structure + volatility; expressed as $ move / % move on the coin)
   - Targets
   - Position size (fractional coins)
   - Hour-based time stop

Position Sizing

Risk Amount = Account Size × Risk Percent
Position = Risk Amount ÷ Stop Distance (in dollars)

Example (ETH):
- Account: $25,000
- Risk: 1% = $250
- ETH price: $4,000
- Stop: $100 below entry (2.5%)
- Position: $250 ÷ $100 = 2.5 ETH

In dollars: 2.5 × $4,000 = $10,000 position

Exit Rules

Condition	Action
Price hits Target 1	Exit 50% of position
Price hits Target 2	Exit remaining 50%
Price hits Stop Loss	Exit 100% immediately
8-12 hours elapsed	Exit remaining position

Crypto-Specific Considerations

Best Trading Hours

While crypto is 24/7, volatility and volume vary:

Time (ET)	Characteristics
9:30 AM - 4:00 PM	Correlates with US equities
3:00 AM - 9:00 AM	Asian/European session overlap
Overnight US	Lower volume, wider spreads

Weekend Trading

• Lower volume typically
• Can have significant moves
• News can move markets without equity correlation

What the Trade Plan Looks Like

Direction: LONG
Asset: ETH-USD
Entry Zone: $3,950 - $3,980 (EMA 20 support)
Stop Loss: $3,850 - $3,880 ($100 below entry)
Target 1: $4,100 - $4,150 (50% of position)
Target 2: $4,300 - $4,350 (remaining 50%)
Time Stop: 10 hours from entry
Position Size: 2.5 ETH
Max Risk: $250 (1% of account)

Note: ES futures currently +0.7% - bullish correlation signal

Crypto Day Trading Risks

Risk	Description
24/7 Exposure	No "close" to force discipline
Volatility	5-10% daily moves are normal
Exchange Risk	Centralized exchange failures
Liquidity Gaps	Wide spreads during low volume
Regulatory	Government announcements