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Beginner's Guide to Swing Trading Crypto

Beginner's Guide to Swing Trading Crypto
If you're a newbie to swing trading crypto, here's a guide that'll help you understand it.
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Swing trading is a trading strategy that entails capturing the price as it moves in a short time frame. The crux behind swing trading is to capture swings in the crypto market that continue from a few days to over a few weeks.

Trending markets are the most suitable for swing trading. When a strong trend exists for a longer time frame, the opportunities for swing trading can be abundant. This helps swing traders reap the benefits of more significant price swings. If you're a newbie to swing trading crypto, here's a guide that'll help you understand it.

How Do Swing Traders Earn?

A swing trader aims to capture the swings in price. When it happens, swing traders may secure positions for an extended period—more than day traders, and less than buy and hold investors.

They use technical analysis to formulate ideas for trade. As the swing events can often stretch for a few weeks, swing traders can also utilize fundamental analysis within the trading framework.

While candlestick chart patterns, price action, technical indicators, and support and resistance levels are typically used to ascertain trade setups, the most common indicators swing traders use are Relative Strength Index, moving averages, Fibonacci retracement tool, and Bollinger Bands.

Swing traders usually analyze time charts ranging from medium to high time frames. That's because a higher time frame confirms a robust downtrend or uptrend. Moreover, they also analyze intraday time frames like 4-hour and 12-hour charts to search for exact exit and entry points.

However, the crucial time frame ideal for swing trading is the daily chart. Regardless of that, the investment and trading strategies differ significantly between traders. Please note that the ideas discussed above are mere examples and not stringent rules.

How to Swing Trade Cryptocurrency?

Want to make money with cryptocurrency? Swing trading is a fantastic way to begin trading. As it consists of longer time horizons, you can make decisions calmly and monitor the trades easily.

If you're new to cryptocurrency trading, you can check out A Beginner's Guide to Making Money with Cryptocurrency (Link to pillar article 2). This article explains three principles of cryptocurrency trading and the steps involved in purchasing the cryptos for trade. Once you're well-versed in the basics, you can start testing your swing trading skills.

Once ready, you can begin trading on a cryptocurrency exchange platform. You may be wondering what the best platform for cryptocurrency swing trading is? While there are several options. The Binance ecosystem contains perpetual and quarterly futures, several market pairs, leveraged tokens, margin trading, and more.

Pros of Swing Trading

Here are some reasons why cryptocurrency traders go for swing trading:

• Swing trading doesn't demand the constant and undivided attention of the trader. While the average crypto trader spends many hours crunching numbers on the desk, a swing trader doesn't have to do that. The pre-requisite of this is that the swing trader must be well versed in the nuances and nitty-gritty of trading through extensive research. A swing trader spends a few hours a week in front of their desk.

• Swing trader doesn't require a lot of effort compared to day-trading. Typically, swing traders rely on Technical Analysis, where they use price charts and historical data to decide their asset management actions. It makes swing trading a more at-ease option that doesn’t require much work on the trader's end.

• Swing trading an asset can lead to fantastic short-term profits. When you're focusing on a set of assets, swing trading can help generate a healthy profit in a short period. That's why people who develop monthly incomes through trading prefer swing trading.

• Unlike long-term trading and intraday trading, swing trading offers leveraged control over the trading market's risks. When it comes to swing trading, you only have to check a few stocks. Because of this, the swing trader can use Fundamental Analysis and Technical Analysis to focus on the pay attention to the investments to make profitable decisions.

Cons of Swing Trading

Here are some reasons why swing trading requires a lot of trader's attention and discretion:

• As swing trading involved extended holding times, the assets invested in swing trading can be subjected to several market risks. For example, the trade position can dramatically change within a few hours or days. This doesn't happen in intraday trading because the trader doesn't keep the assets overnight.

• Swing trading fails to acknowledge bigger and leading market trends. As swing trading centers around the idea of holding an asset for a few weeks and garnering profit from it, this strategy doesn't consider the long-term gains.

• Although swing trading doesn't require a trader to spend most of their day trading, they must have a comprehensive understanding of the crypto market. They must also be skilled in fundamental and technical analysis.

About the Author

The writer of this post is a part of the research team and a regular contributor to Urban Crypto. He writes extensively about making money with Bitcoin. You can check out the site for crypto news and industry info that brings you all the latest news and updates so you can successfully trade and earn from crypto. Check out their Ledger Crypto Starter Pack to get going.

This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links at no cost to you. Please read my disclosure for more info. Clicking any of the links on this website does not increase the cost or affect the price for any item you purchased. Our main purpose is for informational purpose and not for just earning 🙏 

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