Understanding Of Cryptocurrency Swing Trading

Source

Good day fam,

It is your humble friend again @mato445 and I hope everyone is doing fine.

I am happy to be here in this great community to make post and interact with members of this community.

I also want to use this opportunity to appreciate the members and moderators of this community for their hard-work towards community growth.

We shall be learning about a new type of cryptocurrency trading today, and it is no other than swing trading.

Many of us here might have not heard of swing trading, as many are intraday traders, please tag along with me as we learn about swing trading

Swing Trading

Swing trading can be explained to be a type trading in the financial market that seeks to catch medium price gain in the price of an asset.

Swing trading is very much different from day trading which involves making many trades within the day, rather it is a trading technique where traders hold position from days to weeks and in some instances months.

The concept of swing trading lies in taking advantage of price flunctuation or price swings that can be spotted on a broader trend range.

One of the main focus of swing trading is to make profit from market trends, price pattern and momentum shift.

Traders who engage in swing trading aims to capture the highs and lows swing in the financial market.

This form of trading often involves the combination of chart patterns, technical analysis and market indicators to make good trading decisions.

Please do not tire out as we shall proceed with some fundamental principles of swing trading.

Fundamental Principle Of Swing Trading

There are some fundamental principles of swing trading and we shall be discussing about them now, please stay tuned.

• Market Trends :

One of the core principles of swing trading is gaining understanding of market trend.

Technical analysis tools are mostly used by traders to identify the prevalent market trends of a crypto pair.

Cryptocurrency trends can be classified into three types, bullish(uptrend), bearish (downtrend) or sideways (range bound).

Profitable traders seek to align their trade in the direction of the overall trend, they do not enter their trade in opposition to the overall market trend.

Source

• Technical Analysis:

Another interesting principles of swing trading is technical analysis.

Swing traders often make use of technical Indicators such as RSI, bollinger band and moving average to carry out analysis of price chart, and other identify potential exit and entry point.

Moving average is used by traders to smooth out price data, thus providing a clearer image of the underlying trend.

And RSI is used to measure the strength of price market and bollinger band helps in identifying overbought and oversold region in the market.

• Chart Pattern:

Another crucial aspect of swing trading is chart pattern.

Price movement are often predicted with the use of chart patterns such as double top, double bottom, head and shoulder pattern.

These patterns are used for the identification of trend continuation and trend reversals in the market.

Conclusion

Swing trading is a very important trading strategy that is used in the cryptomarket.

This form of trading helps in making profit from trading, and this positions are held for longer positions.

In our next discussion, we shall learn more about swing trading.