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Catalin
Published On: Jun 26, 2024
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Simple Steps to Effective End-of-Day Crypto Trading

End-of-Day Trading_ How to Make It Work for You in Crypto

End-of-Day Trading: How to Make It Work for You in Crypto

Introduction

End-of-day trading is a strategy that aims to profit from the closing hours in the financial market.

This strategy works for the cryptocurrency market since traditional institutions are trading more often in this market.

As it happens at the opening, at closing hours the market volume tends to peak high. The goal of this strategy is to take a probabilistic advantage over this condition.

When volatility goes up, timing trades can result in a good practice since a trader does not have to chase the price, which may move extremely fast at closing hours.

Key Takeaways

  • Trading the end-of-day provides a clear idea of what a trader is looking for, volume. As the day comes to a close, the trader may use all the data from previous hours to make informed decisions.
  • Closing the market can only happen once each day. An end-of-day trader does not need to spend the entire day in front of a screen. This trader avoids over-trading and looks for something concise.
  • The Quick Scanner of Altrady is perfect for the end-of-day strategy since it has a customizable volume filter. Hence, a trader can get an alert when an asset meets a volume rule used by the scanner.
  • Newcomers to start trading the end-of-day strategy should be familiarized with volume indicators, and liquidity concepts, and should know how to spot institutional traders as they begin to enter the market. 

 

What is End-of-Day Trading?

End-of-day is a day trading strategy designed to profit off trades placed near closing hours and the volume peak at this time in the market.

Unlike other day trading strategies, end-of-day can be less stressful. Being able to make more informed decisions is a key distinction of this strategy.

Other trading techniques can demand high levels of concentration and stress for long periods. 

This strategy requires that capacity but for a very specific time, and a specific goal. This leads to better execution automatically.

If a trader has a lower risk tolerance but wants to make a substantial profit quickly, an End-Of-Day strategy should be one to consider.

From a psychological perspective, this method takes a big picture of the market without relying on constant monitoring over the day. So traders can reach the market and not feel like they are missing some movement which can lead to over-trading.

From a logistic point, this strategy can be convenient for non-full-time traders who want to participate in high-volume contexts of the market, but their main jobs do not allow the best trading hours.

Understanding timeframes and hours for End-of-Day trading

The crypto market, like the traditional one, is driven by trading sessions according to the timezone of professionals that trade in major exchanges across Europe, Asia, and North America.

The main sessions driving the markets come from:

  1. New York Stock Exchange (NYSE).
  2. London Stock Exchange Group (LSEG) 
  3. Australian Securities Exchange (ASX)
  4. Frankfurt Stock Exchange (FRA)
  5. Tokyo Stock Exchange (TSE)
  6. Hong Kong Stock Exchange (HKSE)

Let’s see the opening and closing hours in the next table. The 4-hour, 12-hour and daily candlesticks could help you address these sessions according to your timezone.

SessionTime
AMERICA

15:30 to 19:30 (Morning Session)

 

21:30 to 23:30 (End of day)

NYSE (New York, USA)
EUROPE 
LSEG (London, UK)

8:30 to 12:30 (Morning Session)

 

13:30 to 16:30 (End of day)

FRA (Frankfurt, Germany)
ASIA 
ASX (Sidney, Australia)

 

1:30 to 4:30 (Morning Session)

 

4:30 to 7:30 (End of day)

TSE (Tokyo, Japan)
HKSE (Hong Kong)

NOTE: 

These hours are based on Metatrader timeframes. We use Metatrader as a reference for general purposes as it is one of the most used trading platforms.; servers running in it normally come with a pre-settled configuration of UTC+2 (which is the time criteria used to structure this table).

Most crypto exchanges use Tradingview as a terminal. You can set Tradingview to UTC+2 or to your timezone directly to understand the session's hours better.

New York is UTC-4; London UTC+1 and Frankfurt UTC+2.

Australia UTC+10, Tokyo UTC+9 and Hong Kong UTC+8.

OBSERVATIONS:

After understanding these session hours, an End-of-day trader could take advantage of up to 2 sessions. For example, the European session ends between 13:30-16:30; at this same time the American session is starting, so the End-of-day on one side is the opening on the other. The trader from the European session could still wait for the end at New York time. Note that major moves typically occur during the US session.

What is End-of-Day Trading_

Advantages of End-of-Day Trading

At the closing hours of a market, all major events could have already happened. We could think of this as a disadvantage since a trader might miss big price movements, but it is also riskier.

End-of-day trading reduces the risk of larger moves during a session while still capturing beneficial moves at the market close.

As we mentioned, this strategy does not depend on monitoring the market constantly, which saves a trader from over-trading. Which is a bad practice for risk management, but also for reducing costs.

Day trading could lead to a negative balance not only by losing trades but also by the costs associated with them, like spreads and commissions.

The end-of-day approach reduces these costs by executing fewer but more efficient trades.

Once the market has closed, the trader can continue the labor by collecting information and analyzing the overall market condition as well as his performance for the next day.

Implementing End-of-Day Trading with Altrady

Altrady is a trading platform that offers an advanced suite of tools for different trading styles.

Use the Quick Scanner from Altrady to set rules that will alert when volume peaks start to happen. This feature is possible thanks to its volume filter.

In Altrady you will find Multi Charts and Market Explorer (in the left side menu), using these features to discover and analyze real-time market movements and trends.

You can set up a Signal Bot to execute trades algorithmically so you do not miss fast price action.

From the Signal Bot, you will receive updates on your positions and you may track progress manually.

Implementing End-of-Day Trading

Strategies for Effective End-of-Day Trading

To develop an end-of-day strategy, you can integrate these core concepts with technical analysis indicators like the 200 moving average. 

In this article, you can dive into the best crypto charting and trading tools to see all the software and technical indicators available to integrate with an end-of-day strategy.

The 200 day moving average is an indicator that calculates the closing price of an asset over 200 days. Widely used to identify support and resistance levels, his effectiveness has a great percentage of assertion.

In an end-of-day context where the price action is near to touching a 200-day line, it is guaranteed there is going to be a response of the price at that level. You can take this as a probabilistic advantage in your trade execution.

Carrying a trading plan that takes into account different market environments will help a trader to rapidly adapt to several movements when volatility starts to play.

Conduct recurrent research and analysis, and write a journal that keeps you familiar with known contexts that let you identify when uncommon situations are happening.

Risks and Considerations

Certainly, end-of-day trading is not exempt from bad practices a successful trader should avoid:

  1. Do not chase price movements.
  2. Do not trade unfamiliar contexts; maybe something more is happening: a breaking news release, for example.
  3. Avoid breaking the trading plan because of the hype of the moment.

Keep your positions protected with stop-loss and multiple take-profit orders, set price alerts, and track your positions and equity.

Take a look into the Smart Trading section of Altrady.

If you have an investor approach, end-of-day trading well applied will bring a smooth balance to your portfolio management that the risk reward ratio of the overall portfolio could exceed expectations.

Risks and Considerations

Conclusion

Now that we looked into all of the related topics about end-of.day trading, we have to take into account the following:

  1. End-of-day leads to more informed decision-making.
  2. Psychologically and logistically provides traders with an advantage compared with other strategies.

You could be a scalper, a day trader or a swing trader, and still this strategy would bring beneficial outcomes to your trade execution and trading sessions. Consider adding these end-of-day trading concepts to your arsenal and see the positive returns.

It is important to keep learning and exploring new techniques as the market is not a static field but a constant changing environment. Improve your professional path as a trader with end-of-day concepts, which are compatible with a lot of technical indicators and sub-strategies.

Call to Action

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Learn more about:

  • Day trading
  • Scalping
  • Grid Strategy
  • Algorithmic Trading
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Catalin

Catalin is the co-founder of Altrady. With a background in Marketing, Business Development & Software Development. With more than 15 years of experience working in Startups or large corporations. 

@cboruga
@catalinboruga5270