21.08.2020
The secrets of Swing Trading on Cryptocurrency

Effective swing trading – a useful guide for the beginners

Trading on a stock or cryptocurrency exchange is a high-risk business that can bring both income and losses. However, this process is subject to certain rules and patterns as many factors affect the market. Correct analysis, the ability to make timely
decisions and choose the right trading strategy are the signs and features of a true professional. Knowledge is a real strength and the key to success. Therefore, novice users and experienced customers need to constantly progress and learn something new.
This article will tell you what is swing trading and why it might be attractive for you.

Swing trading basic concepts

First of all, you need to learn the swing trading basics principles. The basic principle of cryptocurrency trading is simple – “buy cheaper, sell more expensive”. The fluctuations in the rate for all assets in the market are cyclical, and the main task
of the trader is to determine the optimal indicator of the value of an asset to acquire it at the most favorable price. Swing trading is a special set of strategies that allows you to accurately determine the point of entry into a trend. Comparing swing
trading vs. daily trading, then a special feature of the first is the use of day/week timeframes and strict adherence to risk management. This means that swing trading, although it brings less profit, is a less risky way to make money because the user
can conduct a thorough analysis and take into account all factors. Swing trading implies the choice of a medium-term expiration period and allows for a more thorough analysis of a trade, which increases the chances of success. Comparing swing trading
vs. daily trading, then a special feature of the first is the use of day/week timeframes and strict adherence to risk management. This means that swing trading, although it brings less profit, is a less risky way to make money because the user can conduct
a thorough analysis and take into account all factors. Swing trading implies the choice of a medium-term expiration period and allows for a more thorough analysis of a trade, which increases the chances of success.

There are certain rules to help you understand how do swing traders make money

  • The best moment to open a trade is the entry point, after which the price of the asset will move in the right direction for you. If for a long time after entering, the price moves in the opposite direction, the trader should close the deal and look
    for other opportunities.
  • Sharp and powerful impulses of changes in value can be recorded immediately. This is a useful tip for swing trading for beginners because the user can secure the maximum profit in a short time and increase efficiency.
  • Regardless of which of the swing trading strategies you have chosen, you need to correctly set up your stop loss and use take profit. These two options will help you minimize your losses.
  • It is necessary to carry out the transfer of the transaction to the next day only when the trader is fully confident in its profitability. If the current trade moves towards a loss, it is not recommended to postpone it.
  • Pay attention to the Bitcoin trend. Bitcoin is usually the leader in the cryptocurrency market. Often, other cryptocurrencies will follow Bitcoin trends. This is not an exact correlation, but it should be kept in mind when considering entering the
    market. Trading against Bitcoin’s short-term trend can reduce the likelihood of a trade reversal.
  • It is highly discouraged to place trade orders at the very beginning of a new market session or working day. An additional guideline for exiting a trade is the moments when any significant news is released, which can strongly change the direction
    of the trend and turn it towards a loss.
  • When trading, you must strictly adhere to the given algorithm and trading plan. If there is a sharp change in the trend, then you should not attempt to bring the order to profit or trade against the trend – this will only aggravate the situation and
    increase losses.
  • High liquidity. Try to choose a cryptocurrency with a wide range of rate fluctuations. This will help you more accurately determine the entry point to the trade and maximize profits.
  • If the next prospects for the development of the market situation are unclear, you should skip potential trading opportunities.

Entry point and other swing trading options

Remember that this is a basic concept that can be useful for almost any type of trading and investment strategies chosen by the user. The first stage always begins with the search for a high-quality core. An active zone is an area in which the value line
indicates that a trader can enter a trade. To display this zone on the price chart, a pair of moving averages with periods from 10 and 30 is used. When the price enters the active area, a suitable retracement point appears in the market where you can
open a trade. When the value enters the active zone, the trader should start looking for entry points and calculating the optimal parameters of a potential order. If the value leaves the area enclosed by the moving average line with a period of 30, then
a reversal or long-term correction of value should be expected soon. In this case, you should refrain from placing trade orders. Another unfavorable condition for trading is the exit of the value from the zone enclosed by the indicator line with a period
of 10: this means that the market condition is not suitable for entering it. Directly in the active area, the trader needs to find the most suitable entry point. This can be done using various methods of technical analysis, indicators, or candlestick
patterns. Also, trading opportunities can be found by using value levels or volume indicators of various types of orders. Swing trading is based on a standard approach to market analysis.

Strategies and best indicators for swing trading

There are many swing trading strategies and indicators, but this is the most useful information.

  • As an example, the principle of three candles is extremely popular. The «body» of the candlestick marks the opening and closing prices, while the tails indicate price movement. The state of indecision or «variability without movement» is characterized
    by a short body with long tails. Such candles appear, as a rule, before a change in the current trend.
  • Convergence and divergence. These are situations where the behavior of impulse indicators does not coincide with the price movement of an asset. It is noticed that the momentum starts to slow down before changing the direction of the current trend.
    Thus, convergence and divergence characterize the moment when the impulse slows down and, as a consequence, a possible reversal of the price movement.
  • Bull/Bear Engulfing. This is a fairly popular candlestick pattern. These models are considered the most reliable, provided they are correctly identified. In this case, it is very important to pay attention to the length of the candlestick. The first
    candlestick should ideally have a small body and form on a small volume, and the second candlestick should have a large body and form on a large volume. Such a pattern characterizes the state of indecision of the last part of the trend, after
    which a decisive reversal is likely to follow.
  • Harami Cross. It is a fairly frequent reversal candlestick pattern. In this case, to successfully interpret the model, you need to monitor the volumes. There must be a strong volume in the trend in front of the cross, and after the formation of the
    model, low volume, while the candles of the cross should have short tails. This situation characterizes the state of distrust of traders to the prevailing trend movement, which often leads to a reversal.

Now you know more about the basic principles and the most popular strategies thanks to this article. It is now time to put knowledge into practice by starting swing trading cryptocurrency.  

21.08.2020
The secrets of Swing Trading on Cryptocurrency

Effective swing trading – a useful guide for the beginners

Trading on a stock or cryptocurrency exchange is a high-risk business that can bring both income and losses. However, this process is subject to certain rules and patterns as many factors affect the market. Correct analysis, the ability to make timely
decisions and choose the right trading strategy are the signs and features of a true professional. Knowledge is a real strength and the key to success. Therefore, novice users and experienced customers need to constantly progress and learn something new.
This article will tell you what is swing trading and why it might be attractive for you.

Swing trading basic concepts

First of all, you need to learn the swing trading basics principles. The basic principle of cryptocurrency trading is simple – “buy cheaper, sell more expensive”. The fluctuations in the rate for all assets in the market are cyclical, and the main task
of the trader is to determine the optimal indicator of the value of an asset to acquire it at the most favorable price. Swing trading is a special set of strategies that allows you to accurately determine the point of entry into a trend. Comparing swing
trading vs. daily trading, then a special feature of the first is the use of day/week timeframes and strict adherence to risk management. This means that swing trading, although it brings less profit, is a less risky way to make money because the user
can conduct a thorough analysis and take into account all factors. Swing trading implies the choice of a medium-term expiration period and allows for a more thorough analysis of a trade, which increases the chances of success. Comparing swing trading
vs. daily trading, then a special feature of the first is the use of day/week timeframes and strict adherence to risk management. This means that swing trading, although it brings less profit, is a less risky way to make money because the user can conduct
a thorough analysis and take into account all factors. Swing trading implies the choice of a medium-term expiration period and allows for a more thorough analysis of a trade, which increases the chances of success.

There are certain rules to help you understand how do swing traders make money

  • The best moment to open a trade is the entry point, after which the price of the asset will move in the right direction for you. If for a long time after entering, the price moves in the opposite direction, the trader should close the deal and look
    for other opportunities.
  • Sharp and powerful impulses of changes in value can be recorded immediately. This is a useful tip for swing trading for beginners because the user can secure the maximum profit in a short time and increase efficiency.
  • Regardless of which of the swing trading strategies you have chosen, you need to correctly set up your stop loss and use take profit. These two options will help you minimize your losses.
  • It is necessary to carry out the transfer of the transaction to the next day only when the trader is fully confident in its profitability. If the current trade moves towards a loss, it is not recommended to postpone it.
  • Pay attention to the Bitcoin trend. Bitcoin is usually the leader in the cryptocurrency market. Often, other cryptocurrencies will follow Bitcoin trends. This is not an exact correlation, but it should be kept in mind when considering entering the
    market. Trading against Bitcoin’s short-term trend can reduce the likelihood of a trade reversal.
  • It is highly discouraged to place trade orders at the very beginning of a new market session or working day. An additional guideline for exiting a trade is the moments when any significant news is released, which can strongly change the direction
    of the trend and turn it towards a loss.
  • When trading, you must strictly adhere to the given algorithm and trading plan. If there is a sharp change in the trend, then you should not attempt to bring the order to profit or trade against the trend – this will only aggravate the situation and
    increase losses.
  • High liquidity. Try to choose a cryptocurrency with a wide range of rate fluctuations. This will help you more accurately determine the entry point to the trade and maximize profits.
  • If the next prospects for the development of the market situation are unclear, you should skip potential trading opportunities.

Entry point and other swing trading options

Remember that this is a basic concept that can be useful for almost any type of trading and investment strategies chosen by the user. The first stage always begins with the search for a high-quality core. An active zone is an area in which the value line
indicates that a trader can enter a trade. To display this zone on the price chart, a pair of moving averages with periods from 10 and 30 is used. When the price enters the active area, a suitable retracement point appears in the market where you can
open a trade. When the value enters the active zone, the trader should start looking for entry points and calculating the optimal parameters of a potential order. If the value leaves the area enclosed by the moving average line with a period of 30, then
a reversal or long-term correction of value should be expected soon. In this case, you should refrain from placing trade orders. Another unfavorable condition for trading is the exit of the value from the zone enclosed by the indicator line with a period
of 10: this means that the market condition is not suitable for entering it. Directly in the active area, the trader needs to find the most suitable entry point. This can be done using various methods of technical analysis, indicators, or candlestick
patterns. Also, trading opportunities can be found by using value levels or volume indicators of various types of orders. Swing trading is based on a standard approach to market analysis.

Strategies and best indicators for swing trading

There are many swing trading strategies and indicators, but this is the most useful information.

  • As an example, the principle of three candles is extremely popular. The «body» of the candlestick marks the opening and closing prices, while the tails indicate price movement. The state of indecision or «variability without movement» is characterized
    by a short body with long tails. Such candles appear, as a rule, before a change in the current trend.
  • Convergence and divergence. These are situations where the behavior of impulse indicators does not coincide with the price movement of an asset. It is noticed that the momentum starts to slow down before changing the direction of the current trend.
    Thus, convergence and divergence characterize the moment when the impulse slows down and, as a consequence, a possible reversal of the price movement.
  • Bull/Bear Engulfing. This is a fairly popular candlestick pattern. These models are considered the most reliable, provided they are correctly identified. In this case, it is very important to pay attention to the length of the candlestick. The first
    candlestick should ideally have a small body and form on a small volume, and the second candlestick should have a large body and form on a large volume. Such a pattern characterizes the state of indecision of the last part of the trend, after
    which a decisive reversal is likely to follow.
  • Harami Cross. It is a fairly frequent reversal candlestick pattern. In this case, to successfully interpret the model, you need to monitor the volumes. There must be a strong volume in the trend in front of the cross, and after the formation of the
    model, low volume, while the candles of the cross should have short tails. This situation characterizes the state of distrust of traders to the prevailing trend movement, which often leads to a reversal.

Now you know more about the basic principles and the most popular strategies thanks to this article. It is now time to put knowledge into practice by starting swing trading cryptocurrency.