Swing Trading Strategies – the Golden Rules

We have previously covered the basics of swing trading on our blog. We have also talked about the difference between swing trading vs day trading on our blog. And we have given you some general tips on swing trading crypto effectively. We get it – this is a lot of new information. So, what are the golden rules when talking about swing trading strategies? We summarized the most important points for you. Have a look!

Swing Trading Strategies – a Refresher

Before we get into detail, let’s have a quick recap. In case you have forgotten about the concept of trading, it aims at returning a profit. Institutional trading looks at buying and selling stock, shares and currencies. Trading cryptocurrencies means buying and selling digital assets. Although the tradable assets differ, the purpose remains the same in both worlds. One of the most popular crypto assets used for trading is Bitcoin. On the fiat side, BTC to GBP, EUR and USD are some of the most popular pairs.

Trading has many different forms that vary based on their methodology, goals and strategy. The strategies are usually linked to the trader’s expectations. Day trading means buying and selling assets within a very short timeframe. This could be anything from a few seconds to a few hours. It qualifies as long as the asset trades within the same day. 

Swing trading is the practice of buying and selling crypto after a certain degree of movement in the charts. It is often done in stages. Swing trading might be a good fit for those who don’t want to spend hours on monitoring their trades. If you would like to know more about swing trading, check out our comprehensive guide!

Swing Trading Strategies Checklist

So, what are the golden rules to live by when swing trading? 

Only Invest What You Can Afford to Lose

Yes, we know. You have heard this before. But still, there is no way we can leave this one out of our list. So, only trade with an amount that you can afford to lose. Sure, this is important for obvious reasons like financial security. But there is more to it. Trading with risky funds will get your emotions involved and this is a bad call. Fear will cause you to make irrational decisions and ruin your trades. So, make sure to avoid this and trade only with funds designated for it.

Say NO to FOMO

Let’s continue with the topic of irrational decision making. The fear of missing out has cost many beginner traders lots of money. In essence, trading on FOMO happens when you get too greedy and start investing blindly. This is not a recommended combination of swing trading strategies. For example, if an asset starts climbing very quickly, it might crash just as fast. This is a common example of how FOMO claims its victims. So, keep a calm head and try to avoid this.

Accept Your Losses

We are not going to get too philosophical here but… it is important to understand that losses are part of swing trading. Even the most successful and experienced swing traders experience losses. This happens with all swing trading strategies and it’s integral to the process. So, don’t chase after your losses. This will often worsen your situation since you’ll be likely to take high irrational risks. Learn to accept your losses and move on.

Keep an Eye on Bitcoin

Yes, there are many crypto assets you can trade. But it is quite clear that Bitcoin affects each and every one to some extent. If the price of Bitcoin increases, a similar movement will follow with many altcoins. If it drops, so will the altcoins. So, keep an eye on the “king of crypto” to secure your portfolio. 

The price of Bitcoin is not the only trend to note when trading. Market sentiment is really important to keep in mind in crypto. As there’s no fundamentals attached to the price of crypto it moves pretty much based on the price. We’ve added a market sentiment indicator used by hedge funds to our platform. Read more about it from our article in Forbes

Now that you know all about the golden rules of swing trading strategies, it’s time for some practice! Head over to the CoinMetro crypto exchange! In case you have any questions, contact our support team.

1 Comment

  1. Hans

    Really well written.

    Reply

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