Crypto Academy Week 15- Homework Post for Professor @yohan2on on Swing Trading
😁Hello Steemians, welcome to week 15 at Steemit Crypto Academy. This week, we will talk about another trading style which is 'swing trading'. As We already Explained Our Dear Professor @ yohan2on 👏 has explained to us, very well for our sense, the basic information about swing trading. In this post, I will demonstrate my understanding of the subject through technical analysis.
☞ Swing trading:
Swing trading is a trading strategy that is applied in the short term, it was designed with the purpose of obtaining profits when changes in the price of the asset occur. That is, it is an investment technique that uses charts by estimating fluctuating values to detect upward and downward trends following the market, taking advantage of the gains that are obtained during the rise or fall of the market.
Swing traders generally seek benefits from volatility curves that occur over an estimated period using various technical but very fundamental factors that will help them analyze patterns that occur. It is considered the most suitable strategy for beginner traders.
☞ Take Profit:
Take Profit is a type of order that allows the trader to close a position automatically once the prices have reached a set level that allows to fix the profits. A take profit order is a method that facilitates and guarantees the profit of the trader, provided that the prices move in his favor, expressed in pips or as a percentage of the entry price. Example,
To open a buy order we are going to establish a take profit at a certain price, this take profit will represent a sell order, which will then be activated when the price reaches the established level, at a higher price. Now, for one, if we open a sell order, the take profit will be a buy order, at a lower price, and the same process will occur.
☞ Trailing stop:
The trailing stop is a fluctuation that occurs during the orders of a stop loss with the purpose of protecting the accumulated profits, which will only move in the direction of the operation dragging the obtained profits. This allows the way to stop the operation before making losses, that is, the trader does not decide when to take the benefits, since it will be the market itself that takes care of marking when it is enough.
☞ Using multiple time frames:
The use of multiple time frames in technical trading can be of great help for traders to understand the big picture and value price actions, of course it must be applied properly. It is necessary to know how to use the timing inputs and outputs to be able to reduce transaction costs during actions in opportunistic zones and their general image time frame, referring to possible market fluctuations. And the negotiation time frame that will define your decisions and trading levels,
☞ CANDLE PATTERNS:
A candle is a bar with unique characteristics that is represented by the movement of the value of a particular asset during a certain period of time. It provides information including the open, high, low, and close value for the estimated time frame. Candlestick patterns are supported by one or more candles to help technical traders generate conclusions or anticipate future movements of the lower asset.
☞Using your knowledge of technical analysis, demonstrate your understanding of swing trading:
In the following graph I will apply my strategy as follows: First we place a simple moving average in the bounce zone (1).
And another simple moving average with a longer period that follows the price (2). We will take as references for the entry and exit of the trends the following points: for long entry we are located where the two averages are aligned and the price is above sales (3). To position ourselves short we will do the opposite, when the average is below (4). We can place the stop loss at the previous low (5). If our account is very small, it is advisable to lower the leverage, it is not advisable to use operations that risk more than 1% of the account. As we watch the candles, we see how it deepens and bounces. Then we make a trailing stop that will then go up to protect the profits that accumulate in a trade, expecting good results (6). We will exit with a stop-loss (7) to enter later if we wish. The take profit will be represented by RR, which will mean twice the risk that we will take in the investment.
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☞ Conclution:
To conclude, we can say that it is very necessary for a trader to keep updated with any news that is related to altcoins and the financial market, as this will help him find the right platform for the swing trading application. As we have already seen, the cryptocurrency market is very volatile, although it offers fertile ground for swing trading. Properly applying the parameters will achieve a swing trading that can generate many profits.
Thanks For Reading My Post 😘
CC:
@yohan2on
Hello @gaby20,
Thank you for participating in the 7th Week Crypto Course in its second season and for your efforts to complete the suggested tasks, you deserve a 2/10 rating, according to the following scale:
My review :
A low content essay where your role was limited to providing certain definitions of swing trading strategy without applying them to concrete examples or using a certain indicator. Even the last example lacks a lot of depth of analysis which makes it seem like you don't understand this style of trading.
Thanks again for your effort, and we look forward to reading your next work.
Sincerely,@kouba01