Cryptocurrencies have become one of the best investments for traders due to high price fluctuations. Swing trading crypto is very popular for traders at any level and most traders are interested in it. These active trading strategies are used in markets such as stocks, forex, cryptocurrency, etc. There are many differences between swing trading and other strategies, such as day trading.
What is Swing Trading?
Swing trading is a strategy in which traders want to take profit of price movements in the short to a medium time frame and catch it within a certain range. The goal of this strategy is to catch any ‘swings’ in the market that can occur during the day, week, or month.
A swing trader can keep a position open for several days, or several weeks. Using this strategy is very suitable for volatile cryptocurrency markets and swing trading can take advantage of larger price. Swing traders usually use technical analysis. Also using fundamental analysis can also be helpful because fundamental events can occur in a matter of days or weeks.
Swing Trading Indicators
Some of the Swing trading indicators used in this strategy include:
- moving averages
- Bollinger Bands
- the Relative Strength Index (RSI)
- Fibonacci retracement tool
Day Trading Crypto Vs Swing Trading Crypto
The main difference between the two strategies is the timescale. Day traders are actually trying to take advantage of the short-term price movement which happens in a day. They adjust their positions for a day and they do not leave these positions open for more than one day.
There is also a lot of emphasis on technical analysis in this strategy. While swing trading tend towards fundamentals. Swing trading can also keep a position open for several days, or several weeks. The choice of strategy between day trading crypto and swing trading crypto depends on the conditions and goals of the trader.
Start Trading Cryptocurrencies
To start swing trading cryptocurrency as a practical strategy. The reason for this choice is that you can work on longer time horizons. This feature reduces your hasty and emotional decisions (which beginners are often involved in) and trades more calmly in the volatile cryptocurrency market.
Swing Trading Crypto Tools
- Risk Tools: A parameter for stop-loss
- Social & Copy Trading: The best option for beginners who want to try successful strategies.
- Moving averages: Calculating crypto asset’s price movement over a specific period of time, for example, 24 hours.
- Technical Analysis
- the fundamental analysis
- Automated tools
- ….
Swing trading pros and cons
Pros
- an excellent strategy to master
- less trading costs
- Long-term strategy
- Lower intensity: There is no need to monitor the charts daily.
- Trade part-time / You can have two jobs at the same time for yourself
- Perfect for volatile markets
Cons
- Overnight risk
- Timing the market swings
- Price gaps
Swing Trading Crypto Tips
A demo account can helps you get acquainted with swing trading crypto and understand it. Also, pay special attention to the movement of Bitcoin because bitcoin can affect other cryptocurrencies. For beginners looking for a medium to long-term trading, swing trading is the best option. But if you want to work with more understanding, knowing the daily candlestick charts and basic indicators will help you a lot. Be sure to use the training resources and increase your knowledge.
Conclusion
Swing Trading Crypto can be one of the best options for people who are interested in medium to long-term trading. Features of swing trading crypto, make more beginners to this strategy. But if you want to be successful in the volatile cryptocurrency market, increase your knowledge in this area. Also, be sure to use a demo account to get started and implement your conditions and goals. After gaining enough experience and knowledge, you can choose the strategies that are best for you to operate in the market.