Do you swing trade? Are you long or short? Do you scalp? Most traders love cryptocurrency because they have several ways to make a profit. We’re not talking about lending or collecting interest in crypto, we’re talking strictly about trading. One can use several strategies to make significant gains or cumulative gains that can add to your bottom line.
These strategies include a long strategy, a short strategy, exchange arbitrage, market making, mirror trading, among various other forms of strategies. The truth is that all of these many trading methods may surely benefit you but you must know how to use them to your advantage.
That’s why it is important to cover each strategy specifically and understand the basics before you call yourself a professional. Let’s find out more about swing trading strategy, how it works, is it possible to automate it with the bots, and how it can add value to your portfolio growth.
Swing Strategy in Cryptocurrency
First, we need to know what is the swing strategy in crypto trading and in the general markets. The swing in cryptocurrency is something that will require a proper mindset in regard to how you approach the market. One who seeks to use this specific tool in their arsenal must know discipline, patience and have a certain sense of market direction.
Swing traders see times where they make the wrong trade on Bitcoin, Ethereum and XRP and inquire within whether they have the knack or talent for swing strategies.
The truth is that the fundamental principle of purchasing assets for a low price and selling them at a higher price is what trading is all about in crypto. Swing is an extension of this principle, except, we add time. Instead of having to be aware of market movements on a minute to minute basis, swing traders look at the market in a different manner.
They purchase an asset on one day and may not sell for a couple of days. As opposed to a daytrader, a swing trader practices patience as a fundamental part of their trading strategy. The daytrader is in and out of the market several times during the day. A day trader finds joy in buying and selling swiftly to make incremental gains that add up per day.
Most people do not have time or the resources to daytrade, this is especially true if they are doing it manually. As noted prior, swing traders a bit different. They will look at the market and pick up a few crypto assets. They’ll wait a few days and sell at an opportune time. A swing trader will have the time to focus on other activities while being generally aware of the market and its movements. They may look at prices daily or weekly.
Those who practice swing are not necessarily glued to their devices and may even endure less stress overall.
Selling the News and the Numbers
The swing trader in cryptocurrency may look for specific events that would prop up the price. To prepare for the event, they would their specific assets in advance and wait to see what happens. For instance, if you thought the switch from one consensus model to another would have significant effect on the associated crypto asset, you would make your trading based accordingly.
You may not wait until the day off, you would do it an advance and then see the results after the event. Again, another example is with the bitcoin halvening, if you think that it will move the markets, you would make your trade in advance and look at the price change. Remember that this is event and news based trading.
Next aspect of swing is looking at the technical part of this strategy. Traders appreciate technical analysis because of what it has to offer. These professionals know that they can look at patterns, view signals, and trade on bullish or bearish sentiment in the chart. Professionals who use technical analysis must aggregate the indicator and pattern information to reasonably predict the market.
Always understand that you are dealing in probabilities and not full certainties. Patterns and various forms of signals matter within the market because it shows collective psychology and how the general market is reacting each moment. Charts aggregate and show collective trader behavior.
That’s why traders choose opt to speculate in cryptocurrency with the swing strategy. It may serve as a more feasible option overall.
How Does this Strategy Work with Bots?
Typically swing trading bots allow you to view several crypto assets and notify you on the general positive or negative sentiment. You may also notice broad market scanning abilities at present or in the future with these tools.
Tools may also possess portfolio views, momentum purchases, routine oriented triggers, as well as other functions to make a profit.
Automated trading tools may also have the ability to view candlesticks and other sound TA components to predict potential crypto asset purchases. The better ones will have more seamless experience in regard to alerts in acquisition and divestiture of your crypto assets. Remember that these automated bots may not do all the work for you, you will still be a part of the process in some form.
Automated trading strategies that are swing based will rely on the indicators and the timing. The tools may see aspects such as the Evening Star, Bearish engulfing, Gilligan’s Island, Bollinger Bands, and MA.
Is Swing Trading Profitable?
Of course its profitable over the long-term. Remember that the market is not always kind and that may you see losses in some instances and gains in others. Cryptocurrency is beautiful because it is volatile. Thankfully it moves up and down a certain amount each week. Due to these price movements swing trading method can be very useful and help to pocket value over each week.
Pros and Cons of Bot Swing Trading
Swing strategy is great because you don’t have to be present consistently, you can set a few parameters and be well on your way to living your life. Further, you don’t have to affix yourself to a computer screen or mobile screen, you can come back as you wish.
Finally, many will appreciate the ability to conduct this trading while working at their favorite or non favorite jobs. An additional advantage is that one can aggregate value and net larger profit over the long term instead of minor but several over intra day trading.
Cons of this approach is that you will have to be more patient and have the market go your way to make your trades worthwhile. The truth is that swing can be much slower or it may feel slower because of the longer timeframe that you hold it for.
Issues may occur overnight that may disagree with your strategy if you are looking at it from a day to day standpoint. As you are not intra day, you have more skin in the game and might see effects from events and other factors within the industry. Further, you allocate your value for longer than day traders.
Remember to know your trading strategy and what you are comfortable with in the short term and long term to see success. Swing has massive advantages and offers unique value to those who have more patience and understand the volatility in cryptocurrency markets.