Today, we're gonna be talking about swinging.
No, I'm not talking about those pesky parties that your parents always went to
and came back looking
disheveled.
I'm talking about swing trading.
Similar to traditional financial assets,
there are a couple of different and popular crypto trading styles,
such as day trading, swing trading, buy-and-hold investing,
but among those, swing trading is considered the most suitable for beginner traders.
Why is that, you ask?
Well, you'll be finding out in today's video.
Find out why it's actually a strategy that I use.
Let's get it.
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Alright, guys.
As I briefly mentioned 3 trading types at the start of this video,
I’m going to quickly explain each of them so that you guys can have an idea on what each is
and what makes swing trading unique.
So, let's begin with day trading or intraday trading,
which refers to a strategy in which traders often enter and close a position in one same trading day.
Profit is generated from price changes during the trading session.
Technically, this includes very short-term transactions,
and traders will not likely keep their positions open overnight.
Another trading strategy is buy-and-hold investing.
We'd rather not call it trading because this is a long-term investment.
Investors will set their eyes upon specific portfolios for a long duration.
So a small price fluctuation in a day or a week doesn't matter.
Considering the young age, high volatility of crypto,
this type of tactic is not yet so familiar amongst crypto traders.
Swing trading is the one that concerns us in this video.
This type of trading focuses on watching--
he does like to watch--
and capturing price tendencies.
To successfully detect movements of market price,
traders will have to spend time analyzing data charts and making predictions.
Therefore, swing trading is seen more often for short to medium terms,
in typical occasions at which price tends to form a trend.
Can you guys already see why from the beginning of this video I claim that swing trading is the greatest for new traders?
Ding Dong! The right answer is the timeframe.
An understanding of the market is required.
Day trading takes place in just a 24-hour session,
which requires traders to master technical analysis and to be able to make very quick decisions
while also being in a highly stressful activity.
Buy-and-hold investing is a chess match,
as you need to choose the eggs to put into your buckets and keep them still for a long time.
It’s not only being able to select the right coins,
but you also have to be prepared for sufficient capital and nerves of steel
to cope with unexpected ups and downs of the market.
Starting with this type of trading,
it would have prevented you from experiencing and learning the ins and outs of crypto investing.
All of those complexities make swing trading a perfect option for beginners.
You can have more time to study and consider which crypto holds a sustainable growth
or whether to place buying or selling orders.
Swing trading is like a medium strategy, an introductory lesson for newcomers,
because it provides opportunities for you to gradually practice all basic and necessary techniques
that you will need to use for day trading and long-term investing afterwards.
What are those techniques that I'm mentioning?
Well, I'm talking about technical analysis, price chart interpretation, candlestick patterns,
even a little fundamental analysis-- we do a lot of it on this channel--
and sentimental analysis.
Your job is to foresee the potential movements in the next few sessions
and predict how long the current trend will maintain or when the price is likely to reverse.
So, it might take perhaps one hour, 6 hours, 12 hours, 24 hours,
sometimes days or even weeks to capture the right moves,
the specific points of entry and exit in the breakout level.
Timeframes can be elastic.
But as a swing trader, you need to completely focus on daily charts so as not to miss any precious pieces of information.
Now, let's not beat around the bush and let's focus on the real tricks of doing swing trading.
The first and most important rule is "buy low, sell high."
Never do it the opposite way.
No matter if you're in swing trading, day trading, buy-and-hold investing,
or moving to a new house due to the crippling economic situation,
the recipe to make money is to sell higher than what it cost you to buy.
Even if you utilize some advanced tools like smart contract options,
there's no other way around it.
The next rule is to always determine beforehand when you should enter a swing trade.
We already agreed that swing trading is most suitable for a short to medium timeframe,
in which you have to be able to nail the direction of the market.
That means a stable market when a sideways trend is taking place might be more difficult to forecast.
On the other hand, a market with a highly wavering price seems risky for investors.
Therefore, swing trading beginners should start from a market with an easily predictable uptrend or downtrend.
Of course, in that situation, the margin may not be as high as you would want,
but I guess that's not too bad.
Even if you're pretty sure it’s the most suitable timing to enter the game and place a trade,
don't just go out there recklessly, as,
hey, you can fall into a pit and lose all your money.
So you gotta be careful with what you are doing.
But anyways, to know oneself is true progress.
In this case, it's not just to catch a glimpse of the market trend,
but you have to be able to understand it like the palm of your hand.
The only way to do so is conducting technical analysis.
That means reading charts, construing price indicators, dissecting each day's candlestick, volume,
and combining with some advanced models like moving averages, relative strength index or RSI, Bollinger Bands, or Fibonacci retracement.
Boys, there are tons of indicators that you can use to detect price movements.
We’ve checked out Market Cipher, CATX trade, there's some good ones out there.
Should you want to complete your homework, check out past videos about technical analysis that I've done.
Certainly, building your own swing trading chart is essential and indispensable,
but it would take a while until you become a true master.
inner peace
Hence, swing trading beginners should consider adding more protective methods,
of which stop loss orders is one of the most common.
Apparently, some of you can't spend the whole day looking at daily charts.
If so, stop losses is the most handy way to keep you safe and from suffering.
You can place a predetermined level at which your positions are automatically closed as soon as the price sinks and hits that level.
This is a perfect tool for new players or inactive traders to control your losses from swing trading.
Now, let's wrap up our video here with the 5 best swing trading practices
so you know how to make the best out of your swing trade.
Number 1: Draw a plan and stick to it.
Persistence is crucial,
since swing trading is not something that can be done in the blink of an eye.
You’ve got to be patient and follow with the discipline.
If you're reluctant or inconsistent, then swing trading might not be for you.
Number 2: Place stop losses and don't be greedy.
Like any crypto trading strategies, swing trading incurs inherent risks of digital assets, such as high volatility and unpredictability.
Therefore, be aware of those threats and use all the means you have necessary to manage possible dangers.
Make sure you don't lose too much before you can earn.
That's another important lesson to survive.
Number 3: Don't forget to check the news.
If there is an important announcement about to come up tomorrow,
you better close all your positions today.
It's probably that the announcement will have an unforeseeable impact on your coins.
That's what you should try to avoid.
Number 4: Don't leave your positions open overnight.
You know that prices and crypto can change unimaginably just a few minutes.
It might be amusing to open up your portfolio at night and check your portfolio,
but you can't keep your eye on it all the time.
If you want, it's safer to trade just a portion of your total coins.
Number 5: 20% Rule.
Whenever you see your target coin’s going up 20% while others remain unwavering,
you should go ahead and sell them.
More often than not, the price will decline by 10% in the very next session.
Follow these 5 rules and you'll be closer claiming the Lamborghini they promised you when you were introduced into crypto.
I gotta get rid of that whole moon and Lambo thing.
Nah, I'm just kidding. Let's not do that.
But now it's your turn.
What other rules do you know about swing trading?
Are there any other strategies you want us to explain?
Let me know down below in the comment section.
I hope you enjoyed this video.
If you did, please make sure to smash the Like button and hit Subscribe to become a member of the BitSquad.
Thank you so much for watching.
Have a blessed day.
BitBoy out.