There is no end to trading strategies when we talk about cryptocurrencies. Like each and every financial instrument, the strategy has been twisted and optimized to suit the needs of cryptocurrency traders as well. Such is the case we consider the infamous swing trading strategy. It evolved with equities and stocks, and now finds huge applications in cryptocurrency as well.
What is Swing Trading Strategy
To be precise, swing trading strategy is a speculative kind of strategy, which tries to capture the gains in a stock, cryptocurrency for our matter, from a period of a few days to several weeks. It is not too short term, but still falls in the purview of short term to intermediate term trading strategies in terms of time frames. Technical Analysis is a word that is common with swing trading, as that is kind of a building block for all swing trade decisions, along with some fundamental analysis as well.
Tactics for Effective Swing Trading Strategy
Swing trading, if done carefully and with proper technical analysis, can be very fruitful. First and foremost, it is hiring some experts like executium.com to initially carry out the trades. Second, is you yourself also understand the tactics of effective swing trading, so that you become self-sufficient over a period of time. Please understand that a swing trade is different from a day trade, in the sense that the trade is carried out after holding for more than one day, and the period can extend even up to a few weeks. Now there is no hard and fast rule, but this is the typical time period. Next, in swing trades, one tries to capture a chunk of the potential price fluctuation, rather than targeting the entire shift. A predicted risk/reward ratio is considered an important metric for indulging into swing trade strategy for cryptocurrency. The lower the ratio, the better or more prospective the opportunity is considered to be.
Factors to be considered in a Swing Trading Strategy
The major things that must be kept in mind while undertaking a swing trading strategy for cryptocurrency are:
Market shifts can happen, which can be the exact opposite from the current one as cryptocurrency is quite volatile and unpredictable, and this can be catastrophic, especially when larger figures are at stake.
Long-term trends must be simultaneously considered, as swing trading strategies are comparatively short-term, and one might lose focus on those opportunities entirely.
Market Risks like weekend risk and overnight risk must be factored in.
Who Can Use a Swing Trading Strategy
Swing trading strategy is not something that is too tough to learn, but yes, it is better to learn the tricks and tactics properly before going full-fledged into it independently. Also, swing trading requires that a trader must be fast and accurate in the short term speculation, and at the same time be able to analyze the long term position of some particular cryptocurrency. Now this is a tough one, and it is great when cryptocurrency consultants like executium.com come on to help traders make these decisions.