Swing Trading in Cryptocurrency

What kind of trader are you? Do you look for steady profits, protecting yourself from high risks? Or do you enjoy the high risk high reward game?

There’s a type of strategy that has potential to fulfill both types of traders with massive returns that most people only dream about. It is called swing trading.

Swing trade takes a lot of discipline, to be honest. Of course all your trades should be done with a lot of discipline, but for swing, it takes more because swing trade focuses on the trader’s physiological analysis. Basic point is buy low, sell high. It might sound obvious.

Day Trading VS Swing Trading

There are two types of trading, day trading or swing trading. Day trading is when someone that makes several trades during days, accumulating small gains of 1–3%. However, considering the volatility of crypto market, it seems much success doing swing trading. Swing trading also allows you to not to stay in front of your computer all day. Swing traders will typically make one trade every 1 to 3 days, but sometimes could last up to a week or more.

The advantage of swing trading is that you can earn much larger profit of about 20-50% within a relatively short time. Most importantly. It is also a lot less stressful and time consuming.

Technical Analysis

Predictable chart patterns could be found within all financial markets such as stocks, forex, options, etc. But are especially common within the cryptocurrency trading market. The reason could be because there is more ratio of novice traders in relatively new crypto market.

Technical analysis is visual indicators of trader’s psychology throughout the whole market. There is nothing magical about it, but it’s plain and straightforward.

The 7 Basics of Swing Trading

I will be going over the fundamental precautions of swing trading.

1. Only invest amount can afford to lose.

This is the most important thing in trading. You probably have heard this million times in your trading period. Not only because it can lead you broke, but also by investing more than you could afford, it will lead you to emotionally unstable state.

Trading with fear will cause you to make careless mistakes and lose your patience. If you’re a new trader, trade with only small fraction of what you earn per month.

1. Do not be greedy. This is probably one of the hardest thing to implement. Once you stop trying to reach peak, and sell somewhere before, you will find yourself making higher profit than before. Greed was one of the problems I had when I first started trading and in one of the difficult thing to overcome.

2. Learn from your mistakes. This may seem like thing everybody knows, but you might probably be making the same mistake many times before you learn from them.

Don’t harass yourself too much when you made this mistake. It is normal that you make a lot of mistake when you first try swing trading. Just learn from the mistakes with and ensure that it will never happen again.

At the same time, do not be discouraged by your losses. You might need to pay some tuition fees to learn at the first time.

1. Accept your losses and let them go, and never chase your losses. As similar meaning above, crypto trading will not always go as you expected them to be. Therefore, it is important how you deal with those losses. You have attitude to be willing to accept your losses when they happen. It’s impossible even for professionals to make accurate predictions all the time. Having attitude to learn from your failures may be useful not only in trading but as you live your life. Chasing losses is where most trader encounters more loss, trying to make it up on high risk trades.

2. Always keep an eye on to Bitcoin. Almost all altcoins are closely related to Bitcoin. If the price of Bitcoin rises, altcoins price will almost always drop as a results of people trying to sell altcoins and move to Bitcoin for profits. On the other hand, if Bitcoin prices falls, altcoin prices will fall together. The perfect time for trading altcoins is during the consolidation phases of Bitcoin or when it steadily rises. As long as Bitcoin stays as a king of crypto, market shifts will always follow them most of the time.

3. Write a trading journal. This provides trader to evaluate themselves. The primary objective to writing a journal is to monitor your performance and trading system. Traders who consistently lose trades are not actually having a poor trading systems but it’s because trader do not follow the rules properly. Therefore, if you do not accurately track your trades with trading journal, it becomes very hard to judge if you are having proper trading methods.

4. Practice makes your trade perfect. Before using your real money to trade, practice reading chart or try out demo account first. There are many brokers that provides demo account to check your skills. Once you’ve got a view on how the markets works, basic understanding of technical analysis, you’re may take the next step with trading with real money. Start with small money to get used to the psychological factors that come with trading with money, and slowly increase your capital. When you first start your trading, you need to focus on improving your skills and knowledge before investing large amounts of capital.