Are you curious about starting to trade cryptocurrency but is not sure which strategy to use? In this article, we are going to give you a full picture of swing trading – What the term really means and how you can use it when trading cryptocurrencies.
So, Swing trading is a popular trading strategy used by traders all around the world. When using Swing trading as a strategy the goal is to capture price moves that happens during ha short to medium long-time frame. The goal is to catch what the business calls market swings. This strategy works best on markets that are trending. Swing trading can generate a lot of money when used right, which is on a strong trend with a high time frame.
How does one start with Swing trading?
Swing trading is a great strategy as a beginner. But don’t let that fool you in to thinking that it is easy. There are a lot to think about when using Swing trading as strategy. We are going to guide you step by step how you can get started with Swing trading.
1. You need to start by choosing a Swing trading platform. When choosing platform, it is important that the platform easily can scan stocks and give buy signals. You can use Tradestation, Multicharts or Amibroker.
1. As step 2 you need to create your own Swing Trading strategy. This strategy needs to be tested on some historical data so you can be sure on that it really works. There are 4 steps for how you create your strategy. 1. Choose a market for the strategy, 2. Create a trading idea. 3. Run some backtests on the idea. 4. Evaluate the strategy.
2. Now you need to find good stocks for Swing trading. It is important to find a stock that fits with your strategy. If you choose a stock without considering your strategy you might lose a bit of money. You always need to look at volume, market sectors and volatility when choosing your stocks.
3. As a final step, it is time to execute the Swing trades. You need to trade many stocks and to really be diversified in your trades. It is important to not forget about using a stop loss. A stop loss is an order that is used to tell what maximum loss that is allowed in a trade.
On Tradingbrowser you can get more tips on how to use Swing trading.
The best sites for Swing trading
When starting Swing trading it is important to use professional platforms. There is some platform that suits Swing trading very well.
1. KuCoin
2. Binance
3. Okex
4. Coinbase
5. Bitfinex
The difference between Day trading and Swing trading
There are some ground differences between day traders and swing traders. Day traders always wants to capitalize on what we call short-term price moves. Swing traders almost always looks for longer moves.
When using day trading as a strategy you need to be more active and frequently monitor the market. As a swing trader, the approach is more passive. The different price movements take more and longer time to truly play out.
The different traders also use different analysis. Day traders use more technical analysis and Swing traders use technical- and fundamental analysis.
Master your emotions
Trading and human emotions does not go hand in hand. A lot of traders lose their trades because of their emotions and not being able to handle the pressure. Before you start trading you should read these tips on how to keep your emotions separate from your trades.
1. Start by logging your emotions. This can be a real eye-opener for trades. By logging your emotions in every trade, you can start going back and keep data on how the emotions could impact the trade.
2. Don’t dwell! It is never a good idea to dwell on losses. This can be hard but try to see every loss as an opportunity to learn something new about your trading.
3. Accept smaller returns. As a trader, you are always hungry for big wins. But it is important to understand that you might not always get the returns you wish for. Instead of getting stressed, accept this and in the long run you will be a better trader.
Summary
Swing trading is a great strategy for beginners as well as for experienced traders. As a Swing trader, you need to know your market at be comfortable with staying in positions for days or weeks.
Before you choose if you want to swing trade or day trade it is important to understand the difference between the two strategies.
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