Steemit Crypto Academy | Season 2: week 7 - The Swing trading style || DOGE/USDT Trading Pairs || by @preye2

INTRODUCTION

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So far we have really learnt alot from our respected professor @yohan2on, who has taught us how to make both short and long term profits using the various Trading styles.
Although the crypto market can be most times unpredictable, these various Trading styles can go a long way in guiding the traders on what and how to go.

Having learnt and understood your lecture Sir, permit me to proceed with my homework task for Season 2: week 7, which is on "Using my knowledge of technical analysis to demonstrate my understanding of Swing trading".

Swing trading on DOGE/USDT Trading Pair

I have been made to understand by our professor @yohan2on that in Swing trading, Multiple times frame analysis are carried out which includes diverse reading from various charts and time frames, all with the aim of making atleast a short term profit.

So for the sake of this lecture I will be using the DOGE/USDT Trading Pair to demonstrate my understanding of Swing trading. Dogecoin which is regarded as the clone of Bitcoin, is one of the fastest rising coins so therefore it will be easy to get the various multiple Analysis I need for this homework task.

Here is my Entry and Exit Strategy

I want to make a trade with the DOGE/USDT pair on Binance, but before I go into it I must first of all observe the ups and down movement (zig-zag movement) of their coin or pairs. This zig-zag movement is regarded as Trend in the crypto market.

Talking about strategy, I will be using the Machanical/Systematic Strategy to execute my entry and exit. This strategy helps the trader in decisions making, defining his/her goals, and risk controls.
So here trading is done based on changes in the trend.

Although trades in crypto could be unpredictable, you should have a target and a profitable one at that with low risk and high probability of profit.

Multiple time frame analysis

For swing trading, what is usually used is weekly and daily chart time frame and in some cases we can use the 4 hours time frame. Time frames are used to identify the common differences in the time of a trade.

To make it easy and clear, I will check the market view using the weekly chart and see how it has been working all along, and then I will use the daily chart to identify the various trends, and then finally, I will determine my entry and exit point using the 4 hours chart.

Candlestick analysis and use of other relevant indicators for your trade decision

The various candlesticks gives a larger view to how the market has been going, and each candlestick represents a week for weekly, day for daily, and hours where necessary.

I used the weekly candlestick to go back to about a year ago and I discovered the all time highest during this period, and it was $0.45000 at around 13:00 on the 16th of April 2021.

I entered the 4 hours timeframe chart, and observed that there are changes in the trend, so I introduced the Moving Average Convergence Divergence (MACD) to help in momentum checking, which includes signal line cross over.

The volume is kind of low, is fluctuating, so I will use the Relative Strength Index (RSI) to calculate the improve in the market.

Trade Management (Setting stop loss, trailing stop and take profit)

Like I said earlier crypto can be unpredictable, these styles are aim to helping us avoid loss, so in other words the market could go outside your plan, that is the more reason you need to set a stop loss).
My setting is more of a short term profit, If the dogecoin goes above $0.34499, I will be taking a profit of $0.34713 and a stop loss of $0.34157.

Conclusion

The various trading styles are really important, and a good knowledge about it will help you avoid losses. I hope to improve in my knowledge of the various trading styles as I am still in the process of learning it.

Special thanks:
@yohan2on

Note: All pictures were personal screenshots of the trading view from my Binance app.