Crypto Academy Season 2: Week 7 – The Swing Trading Style – by @yohan2on

When it comes to cryptocurrency trading, there are a lot of trading strategies and techniques used by different traders in an attempt to capitalize on the cryptocurrency market fluctuations in order to make more profits. The swing trading style is one of the many popular trading styles that is used by a lot of cryptocurrency traders to make a lot of profit from the cryptocurrency market fluctuations. However, it is also important to know that there is no right or wrong trading style or perfect style, it all depends on the strategy or style that the trader understands and feels more comfortable with and above all, the style that is most effective for the trader when it comes to making the most profit.

Swing Trading

Swing trading is simply a type of trading in which a trader holds a particular cryptocurrency for a much longer time frame compared to day trading. The timeframe in which the trader holds the cryptocurrency can vary from multiple days, to weeks and sometimes even months so as to profit from the market swings or price movements in the cryptocurrency market. The cryptocurrency market is volatile and consists of price swings or movements, a swing trader tries to profit from these market swings or movements by holding a particular cryptocurrency for a longer timeframe and waiting for the market movements to either enter or exit a trade in order to make more profits.

A Crypto Asset Pair – ENJ/USDT

A cryptocurrency asset pair is simply the pair of cryptocurrencies that can be traded for one another and also shows the comparisons between the prices of the cryptocurrency pairs. ENJ/USDT, ENJ/BTC, ENJ/ETH are clear examples of crypto asset pairs. The cryptocurrency asset pair I will be using is the ENJ/USDT pair for the swing trading. My focus will be on the Binance exchange simply because there are more volume there which makes it much easier for the technical analysis. The crypto asset pair is very important in swing trading because it plays a major role when doing the technical analysis and in the result of the trade.

The prices of cryptocurrencies might vary depending on the crypto asset pair - that is why it is important to choose the right crypto asset pair before swing trading. Take for instance, a particular cryptocurrency might have a high volume in the USDT, which means that there is a lot of liquidity in that USDT market and also means that there are more people trading that cryptocurrency asset using that pair. Also, that same cryptocurrency asset might have a very low volume and liquidity in the ETH pair, which means that there are not many people trading the coin using the ETH pair. This can heavily affect the analysis and give a lot of false signals. That is why it is very important to always make use of the right trading pair, or the trading pair with a lot of volume.

ENJ/USDT Pair

What's your Entry and Exit Strategy?

As a swing trader, it is very important to have a clear entry and exit strategy. By entry and entry strategy, I mean, having a strategy that determines when to buy a particular cryptocurrency asset and when to sell a particular cryptocurrency asset so as to make the most profit from the market swings. For me, I like to have a clear strategy when doing swing trading to profit from the market swings.

Trends using technical analysis and indicators are my core entry and exit strategy when it comes to swing trading. When doing swing trading, I focus more on technical analysis especially after ensuring that the fundamentals and sentiments around the cryptocurrency are solid before proceeding to focus on the technical analysis of the chosen crypto asset pair.

Before I enter a trade, I would first do my technical analysis on the chosen cryptocurrency pair, which for this case is ENJ/USDT. I like USDT pairs a lot because it has the same value as USD and there is always a lot of volume and liquidity in the USDT pair across multiple exchanges. I always use indicators to help me determine the trends in the market. With indicators such as moving averages, RSI, volume indicator, MACD, I can determine the market trends to know when to enter or exit a trade. I like to use together the MACD and the moving average so get a clear determination of the market trend. The moving average confirms the MACD signals.

Multiple Time Frame Analysis

Multiple time frame analysis is simply technical analysis that involves carrying out analysis on a particular cryptocurrency asset on different time frames to get a clear understanding of the market direction and trends so as to make the best swing trading decisions. When doing multiple time frame analysis, the swing trader would monitor a particular cryptocurrency asset on different time frames, to understand the market trend over a particular time period. Since swing trading involves holding a particular cryptocurrency asset for a period of time, like multiple days or weeks, multiple time frame analysis would involve doing analysis on that cryptocurrency asset on multiple time frames up to months to get a clearer understanding of the market trend. I will be doing multiple time frame analysis on ENJ/USDT pair, focusing on hourly, daily, weekly and monthly charts.

Monthly Chart - ENJ/USDT

When we look at the monthly chart of the ENJ/USDT pair, we can see that the market has been moving in an upward direction, the price has moved from $0.0489 to $2.5440. We have also seen an increase in volume since. The price broke above $2.5440 but immediately retraced back down below to the $1.66 price level.

Weekly Chart - ENJ/USDT

We can see from the weekly chart the different support and resistance price points. The market is in a correction, it has moved from uptrend to a downtrend. We can see the latest support level at $0.9222. There is a previous support at $1.9737 and resistance on $3.1143 and $2.6688. We have also seen a drop in the volume which shows that there is a decrease in interest in the market.

Daily Chart - ENJ/USDT

The daily chart shows that the market is moving in a downtrend. Looking at the 10EMA and the 20EMA, the 10EMA has crossed above the 20EMA which confirms the market in a downtrend. The price has moved from $3.4182 all the way down to 0.9393 and is correcting with a current price of $1.6678.

4 Hour Chart - ENJ/USDT

We can see from the 4 hour chart, we can see that the trend is taking a U turn and is moving in an uptrend direction. The price has moved from $0.8454 to $1.6435. We could see the price retest the resistance level at $1.9737 sooner than later. We can also see that the volume is picking up momentum, which is a good sign of increased market interest.

Candlestick Analysis

Using the weekly timeframe candles, the market is moving in a down direction. The price of ENJ/USDT has moved from a high of $3.1088 to $0.9393 and is probably trying to retest back to the previous high which would see the market move back in an uptrend.

On the daily candles, we can see the downtrend movement. It is a reversal correction from the uptrend movement. There is a support level at the $0.9393 price point which has seen the price begin to surge upwards. However it is still in a downtrend as there is a big chance that we will see another correction downwards. The EMA red line is above the EMA blue line which confirms the downtrend.

Looking at the 4-hour candles, it shows an uptrend movement has begun. We can see the price moving to retest the resistance at the $2.1677 price level. The MACD indicator is showing that the market is in an uptrend. With the 10EMA line crossing the 20EMA line, there is a confirmation that the market as entered an uptrend. Which is a good indication to enter the trade using a stop loss and taking profit at $2.1677.

Trade management

Trade management is very important when it comes to swing trading. With proper trade management, a swing trader can either make the most profit or reduce as much risk as possible. For me, using the ENJ/USDT market, I will wait for a pullback to buy ENJ at $1.53. I will set my stop loss to be at $1.41. I will set my trailing stop at $1.45 and I will put in a sell order when the price of ENJ hits $2.11 so as to take profit.

Conclusion

Swing trading is one of the most popular style of trading that can be very profitable if done correctly and utilized the right technical analysis tools and indicators. When it comes to swing trading, there are a lot of trading strategies that can be used so as to capitalize on the market swings in order to make more profits. However, it is important to know that there is no perfect trading style, it all depends on the strategy or style that is most effective for the swing trader and a strategy that helps generate more profit.

Task post for @yohan2on