What is swing trading and how to trade it?
Swing trading is a widely used trading strategy that can be ideal for experienced traders. Swing traders work in different financial markets such as cryptos, forex, and stocks. But is swing trading suitable for you? Should you start day trading or swing trading?
In this article, we will tell you what you need to know about swing trading cryptocurrencies and help you decide if it is worth using this strategy in your trading.
What is swing trading?
Swing trading is a trading strategy that includes trying to fix the price fluctuations that occur over short to medium time frames. In other words, the idea of swing trading is to catch market swings that occur from a few days to a few weeks.
The swing trading strategy works best in trending markets. If there is a strong trend in the higher timeframe, traders can take advantage of larger price swings and receive a good profit. In contrast, swing trading can be more difficult in a consolidating market. After all, if the market experiences a flat trend, it’s harder to catch big price changes.
How do swing traders make money?
As already mentioned, swing traders seek to capture price fluctuations that occur from a few days to a few weeks. Thus, swing traders will hold positions longer than day traders but less than investors who buy and hold crypto.
Basically, swing traders usually use both technical and fundamental analysis to analyze the market.
To determine trading positions, traders use the following types of technical analysis: candlestick charts, support, and resistance levels, price movement, and technical indicators. Among the most common indicators for swing traders are moving averages, the Bollinger Bands, Relative Strength Index (RSI), and Fibonacci Bands.
Swing traders usually use medium and long timeframes since the start of strong uptrends or downtrends can be identified over a longer timeframe. Also, swing traders can use intraday charts such as hourly, 4-hour, or 12-hour charts to determine entry and exit points when analyzing the market. For example, these points can be a breakout or a pullback in a shorter period of time.
In addition, if a trader needs to allocate the most important period of time for swing trading, then it is necessary to use a daily chart.
As for fundamental analysis, it is also necessary for swing trading since the news background and statistics may be the impetus for a new trend.
Swing Trading vs. Day Trading
| Swing Trading | Day Trading |
| Swing traders profit from larger movements in the market. | Day traders benefit from short-term market movements. |
| This strategy doesn’t require constant monitoring of open positions. | It is an active trading strategy as traders should often control the market. |
| Swing traders typically use a combination of technical analysis and fundamental analysis, usually with more emphasis on technical aspects. | During day trading, traders mostly use technical analysis. |
| Swing traders leave open positions for more than one day. | Day traders do not leave open positions for more than one day. |
How to start swing trading cryptocurrency on the Cryptorobotics platform?
As we have already said, in order to start using a swing trading strategy, traders need to analyze the market using various crypto trading tools for tech analysis. With the help of these crypto trading tools, traders can make the trading process more efficient and profitable. All this is provided to its users by the Cryptorobotics trading platform. This platform has all the necessary tools for both swing trading and day trading. Among them are various algorithmic tools and tools for manual trading. Traders can set stop loss and take profit to reduce the risk of losing funds and increase the chances of making a profit as well as turn on alerts to get instant messages when the price of a digital coin has been reached. To start using all the necessary tools for swing trading on the Cryptorobotics platform, you need to follow these steps:
- Go to this link.
- Register on the Cryptorobotics platform.
- Click on the “Trade” button.
- Create an account on one of the fifteen exchanges available on the Cryptorobotics platform.
- Link created exchange account to the platform.
- Select crypto pair.
- Customize the necessary trading tools.
- Start swing trading.
Conclusion
Swing trading is a widely used trading strategy in cryptocurrency and other financial markets. Swing traders usually stay in positions for several days or weeks, depending on the individual trading setup.
Should you use swing trading or day trading? The easiest way to figure out the most suitable trading strategy for you is to try both swing and day trading. It can also be helpful to learn how to manage risk using stop loss, take profit as well as proper position sizing techniques before you start crypto trading.
READ MORE: Investing in cryptocurrency: how to start and reduce risks
