What Strategies Can You Use In Swing Trading

by James DiGeorgia | 02/19/2021 4:34 PM
What Strategies Can You Use In Swing Trading

Swing trading is one of the current trading strategies that one can consider in the crypto space; before you immerse your resources in it, you must be ready psychologically.


Trading in stock markets and the crypto space can positively generate so much income for an individual. This is a result of the fluctuations in the stock and crypto values. One can apply a swing trading strategy within the crypto trading platforms where they commit their time for maximum profit generation.

From the name, swing trading refers to trading in stock or crypto that is normally aimed at getting the maximum yield in profit due to the short-term fluctuations that exist within the stock markets and the crypto space.

You have to concentrate on the upswings and downswings resulting from the observable trends that can be noticed within the trade. Following these trends demands the use of algorithmic indicators to ease the investment decision-making process. Therefore, for maximum returns in the trend following strategies, the use of indicators that have stood the test of time can be the most reliable alternatives.

The following are some of the strategies that one can use to outwit other traders within the stock markets and the crypto trading;

#1: Consider using the MACD indicator

MACD stands for moving average convergence divergence. This is an indicator that utilizes averages to indicate whether a given trend can be categorized as bearish or bullish. The trader compares the MACD line’s movement in relation to the signal line. With this, you can make a quick turnaround decision on whether to consider buying or selling. In most cases, when the deal is bearish, one should consider selling, while when it is bullish, that is the time to consider buying the stock. However, care must be taken to combine one’s experience with the values obtained from these indicators.

#2: A trader should consider the use of Fibonacci sequencing

Fibonacci retracement indicator is a very strong tool for following trends and predicting future values. It often indicates two outcomes: whether the stock is in resistance or support conditions. The decision is often appropriate when the Fibonacci sequence is followed; for instance, the most common Fibonacci ratios applicable are about 23%, 38%, and 61%; with this, a trader may decide whether it is resistance or support. Most traders often opt for the alternative of 50% that doesn’t lie within the Fibonacci sequence, which may be misleading. 

#3: A trader may depend on the resistance and support triggers

Within the support and resistance market values, the decision can be made to buy stock or sell. For instance, support represents that condition where stock or crypto price is below the normal market price; with this, one may decide to buy stock. On the other hand, the value may fall above the market price in the case of resistance, which can be a wrong time for making an investment. When following the line trends for support and resistance, care should be taken when they cross over and their roles get switched. There are always selling pressures and buying pressures; these indicators enable a trader to overcome these pressures by either going below it during buying or above it when selling.

#4: A trader should follow a channel of stock

In the trading periods, there are often stocks that tend to display strong trends. With this, a trader can track them and perform their trades within the given channels. The channels can either display a bearish situation or even a bullish one. In the case of a bearish trend, one may decide to open up a selling position for maximum short-term returns, while on a bullish trend, one may choose to buy stock or even crypto to form maximum returns.

Why one should consider crypto rather than stock markets

The blockchain technology that utilizes the decentralized finance system has dramatically revolutionized online trading. Since the stock markets are centralized in management, there is often a possibility of manipulating the stock; on the other hand, the crypto markets are out of reach to the conventional manipulators such as the central banks and service providers. Therefore, they are more convenient for use since they are relatively reliable and have considerable increases in value that can be used for the long term.

Therefore, for reliability in swing trading, the investment within the cryptocurrencies, including bitcoins, Etherium, Litecoin, Cardano, and many more, can be more reliable than the stock markets.


                     3 Proven Swing Trading Strategies (That Work)



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