Swing Trading Crypto also referred to as spot trading in crypto is a trading strategy particularly suited to volatile markets where ‘swings’ can be expected to occur reliably. Classical examples of such markets are the cryptocurrencies Bitcoin (BTC) or Ethereum (ETH).
A swing is any rapid change in price action, occurring after either a peak before the market value drops again (where the swing trader will initiate a short trade), or after a dip before a bounce occurs (where the swing trader will initiate a long trade).
What is the difference between Swing Trading Crypto and Day Trading Crypto?
What differentiates Swing Trading from Day Trading is that Day Trades as the name indicates operate on a timeline that is usually a day or less, whereas Swing Trades last at least a day and can even last weeks in some cases.
Swing traders may utilize technical analysis to guide their trading strategy but rarely to the same degree as day traders do, usually opting into a combination of fundamental analysis as well as technical analysis.
Is Swing Trading Crypto right for you?
Before you can answer that question first you have to take a look at the pros and cons of Swing Trading.
· Because you issue orders less frequently, trading costs will be less expensive
· Less stress: Due to this lower trading frequency and playing more of a long game, swing trading cryptos tends to be less stressful
· Lower time investment: Swing Trading Crypto doesn’t require you to put in hours every day monitoring trades like in day trading, your life does not have to evolve around swing trading
· Exposure to overnight risk
· Technical analysis can become invalidated by volatility: The crypto market is never off, it is ongoing 24/7, coupled with the notorious volatility of the crypto market it’s easy for the price to go way beyond planned trading ranges
Patience is key when it comes to Swing Trading Crypto, not only is it imperative to possess the patience to look at the long term when it comes to capitalizing at the proper moment on a market movement, but you must also possess the ability to satisfy yourself with closing in profit when you’ve hit a profit benchmark you set instead of becoming too greedy trying to maximize your profit and then losing it all. This is the good and the bad of trading in a volatile market, and being able to reliably end up in a net profit is key to succeeding.
How to get started
First of all, you need to figure out what cryptocurrency to trade. In the beginning, it’s best to stick to as few cryptocurrencies as possible. It may seem tempting to try to capitalize on many different coins at once, but it will just spread your attention thin without any gains. Pick one or two cryptocurrencies, study them well and become good at trading them before considering branching out further.
Remember, Swing Trading Crypto is about using a methodical approach to your trading to reliably earn income. Most people who believe they can get rich quickly and easily by gambling on cryptocurrencies will lose the gamble! What you’re looking for is consistency and becoming familiar with the charts of one cryptocurrency.
But which to choose? There are thousands of cryptocurrencies on the market with new ones appearing every day, but when it comes to swing trading, you’re not looking for new coins but rather those with large market capitalizations, think Bitcoin (BTC), Ethereum (ETH) or Tether (USDT) for example. Those three traded the most on cryptocurrency marketplaces and exchanges.
Because these cryptocurrencies are so volatile, swing traders will seek to find themselves on one side of an extreme swing for a few days or weeks, then switch to the opposite side once the price swings in the said direction.
But where to trade? When you decide which crypto exchange you’re going to use, you should keep in mind aspects such as security, reliability, number of users, trade volume, transaction fees or other critical information you need to know.
When you’re trading with large funds, you want to do so via an exchange you can trust with your money without any second doubts about the integrity of the security of the platform – which is why the security features of our crypto otc desk at securedigitalmarkets.com are such an integral part of our exchange. We believe that the only thing that should keep traders at the edge of their seat is whether their trades are going to be profitable – not if they’ll actually be able to move any of their profits to their bank account.
All that’s left is to start trading
No trading strategy is objectively superior to others – trading strategies can only be the best to the degree they fit an individual trader’s goals, budget, personality, and skillset. If you’ve assessed the case and concluded you are ready to expose yourself to the volatility of Swing Trading Crypto, no better place to start than the best crypto otc desk.