Steemit Crypto Academy | Season 2: week 7 - The Swing trading style

in SteemitCryptoAcademy4 months ago (edited)

This is another trading style that is often used by traders with a motive of making short-term to medium-term profits. Unlike day trading (Scalp trading), Swing trading involves holding trades for a few days, weeks or even months. Swing traders use technical analysis in making their trade decisions. They carry out multiple time frame analysis which involves the reading of different charts of different time frames as they seek to establish a good entry and exit strategy.

Swing trading.png

Background image:Pixabay

Crypto market prices don’t move in a straight line. They do move in zigzag, up and down, make waves or swings following the fluctuations in the prices. Swing traders capitalize on making profits from these upward or downward swings in the market. In the process, Markets take on trends could be a downward trend where the bears are in charge or the Uptrend which shows the bulls dominance of the market.

A swing trader first looks for a major trend in a bigger time frame chart such as the weekly or Monthly, then comes down to as low as an hourly or 4 hourly chart to have a good entry position. They make profits from the short-term swings that markets tend to make as they continue in the direction of the major trend.

This trading style consumes less time as opposed to the day trading style. Swing trading does not need a trader to over-focus on the charts. He simply places his trades following his well-established trading strategy and waits for days, weeks or even a month for the trade to hit his take profit or stop loss according to his trade set up.

Ideally, the minimum time frame a swing trader looks at while seeking trade entries is the 1-hour time frame.
Swing traders use technical analysis tools such as the Japanese candlesticks, moving averages, Fibonacci retracement coupled with some fundamental analysis of a Crypto asset pair in establishing a more concrete trade decision.

Since trades are held overnight, for a few days and weeks; Swing trading is, therefore, a less stressful type of trading. A Swing trader is not too stressed like a day trader who places multiple trades in minutes within the day and has to keep watching and monitoring them. Swing traders use smaller lot sizes that protect their accounts from the would-be unprofitable trades.

Swing traders seek out and trade chart patterns such as the header and shoulder chart patterns, Cup and handle chat patterns. Once these are discovered, they are a good opportunity that aids them in making some good number of pips if they are well spotted and traded with good management skill.

Multiple timeframe analysis involves the establishment of the major support and resistance zones in the higher time frame charts as you continue downwards to the smaller time frame chart where you want to place your trade entry.
Ideally, the risk-reward ratio is supposed to be 1:2. Implying for every $1 risked trade your target is to make a $2 profit.

That’s a good risk to reward but if you risk $2 in order to make $1, that’s a bad risk to reward. As swing traders design their trade setups, they put the best risk to reward ratio into consideration.

However all trading styles are risky, mastering the swing trading style comes with continuous practice, using different trading strategies. The practice has to be done on a demo account. It is advisable to backtest a particularly strategy and also constantly try it on a demo account until you have attained a certain level of confidence to begin trading it with your real money.

Example

BTCUSD - Trade pair -4hr.png

A 4-hourly chart of BTCUSD

Swing trading on the BTCUSD pair
I will first identify the major trend of the market
Monthly = Uptrend
Weekly chart = Uptrend
Daily chart = Downtrend
4- hourly chart = Downtrend
I will then establish my support and resistance lines on the various Time frame charts starting with the biggest to the smallest.

The biggest time frame I am looking at is the weekly chart as I seek to hold my trade for a couple of weeks. I plotted my support and resistance lines and I gave them a dark thick colour to make them different from other support and resistance lines in the lower time frames. On the daily chart, I used the Lime dotted lines to plot my support and resistance lines. I scaled further down to the 4-hourly chart, where I plotted the support and resistance lines with the dark orange dotted lines.

The plotted support and resistance lines become my watching points. I watch price action on those particular areas. Usually, whenever the prices reach a support zone, they may either reverse proceeding in an uptrend or break up the support zone by forming a close below that support zone hence proceeding in a downtrend.

Reasons for my entry
In trading, we buy at support and sell at resistance. Bitcoin is heading for a retest of a former low of $29,320 before making a trend reversal. I will therefore set a buy stop at $32,169 so that the market picks me up at that particular price point before reversing and proceeding in an uptrend.
My stop loss = $28,362
Take profit = $42,176
Trailing stop loss = $36,159

Homework task

Using your knowledge of technical analysis demonstrate your understanding of Swing trading

My expectations
A clear trading plan

  • A Crypto asset pair
  • What's your Entry and exit strategy?
  • Multiple time frame analysis
  • Candlestick analysis and use of other relevant supporting indicators for your trade decision.
  • Trade management ( Setting stop loss, trailing stop and take profit)

Rules and Guidelines

  • Post your homework article in the steemit Crypto Academy
  • Only steemexclusive articles will be curated
  • Your article should range between 300 – 1000words.
  • Use an exclusive tag #yohan2on-s2week7 and also tag me @yohan2on so that I can easily find your article.
  • Clearly reference your work in case you have directly borrowed any content from other sources. Otherwise, be original and as creative as possible.
  • Plagiarism and spinning of other users’ articles will not be tolerated in the homework task. Otherwise repeat offenders will be blacklisted and banned from the Crypto Academy.
  • Use only copy-right free images and showcase their source.
  • To participate in this task, your reputation should not be less than 50.
  • Your article will not be reviewed nor curated if you are powering down at the same time.
  • You should have a minimum of 100SP to be eligible to participate in the Steemit Crypto Academy
  • This homework task runs till 29th/05/2021 (Saturday), Time: 11:59 pm UTC.
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Hello professor thanks for this wonderful lecture I would advise you use a markdown style like you used on the ”RULES AND REGULATIONS” for “HOME WORK TASK” to make it more visible
Thank you.

 4 months ago 

I agree

 4 months ago 

Okay, thanks for that suggestion, let me do so.

Thanks professor

Greetings professor @yohan2on I hope you are successful in your activities, below I attach the link of my participation of the assigned task.

https://steemit.com/hive-108451/@madridbg/steemit-crypto-academy-or-season-2-week-7-the-swing-trading-style-by-madridbg

thanks professor...i would like to participate too!

I also post content related to bitcoin and cryptocurrency.

You may check my post to stay up-to-date in the markets.

Thank you.

 4 months ago 

Sorry, your reputation is still below 50. You need to begin from the Newcomers community.

Good lessons by the proffessor,

Expect my entry soon

❤❤❤
Faith

 4 months ago 

Thanks. I am Looking forward to it.

 4 months ago 

It takes an expert like @yohan2on to explain complex topics such as "swing trading " with such simplicity. This post has increased my knowledge of swing trading

 4 months ago 

Thanks for the appreciation.

 4 months ago 

Good day professor @yohan2on. It is always a pleasure to perform your homework task. Please find below the link to my homework task.
Best regards.

https://steemit.com/hive-108451/@reminiscence01/crypto-academy-week-15-homework-post-for-professor-yohan2on-on-swing-trading

 4 months ago 

This is a very interesting task, it is among my favorites to participate in this week. I will certainly give it my best effort. Blessings.

Financial Markets Analyst.
@lenonmc21

 4 months ago 

Great! I am looking forward to your article.

Good day sir. Please can you explain the trailing stop loss

 4 months ago 

The trailing stop is a trade management decision by a trader that involves taking off the risk when a trade moves into profit.

Thanks prof. I did my own research on it so I understand it better. I only asked to confirm if it was the same thing I researched on because you mentioned it in your post without any explanation.

Thank you again for the clarification.

 4 months ago (edited)
 4 months ago 

hello professor @yohan2one
an amazing lecture throughout. I loved reading this post and I learned alot from it. It took me a lot of time to make this assignment.

hope you have a good read too. You can find it here:

https://steemit.com/hive-108451/@huzaifanaveed1/steemit-crypto-academy-season-2-week-7-or-post-for-yohan2on-or-swing-trading-or-by-huzaifanaveed1

thank you

Hello @yohan2on, I participated in your assignment, you can go through it via this link.

Thanks

 4 months ago 

Hello Professor @yohan2on. I am very excited about this assignment, I had a lot of fun doing it, although, on the other hand, I am a bit anxious to know your opinion of my analysis.

Here is the link. Regards.

https://steemit.com/hive-108451/@allbert/crypto-academy-week-15-homework-post-for-yohan2on-the-swing-trading-style

I wrote my assignment two days ago and forgot to submit it here. This is my post

https://steemit.com/hive-108451/@ajewa/steemit-crypto-academy-or-season-2-week-7-the-swing-trading-style

 4 months ago 

Saludos profesor @ yohan2on, espero que se encuentre muy bien, le escribo para notificarle que mi tarea de la semana pasada aun no ha sido calificada aqui le dejo el enlace

https://steemit.com/hive-108451/@claravel/steemit-crypto-academy-or-season-2-week-7-the-swing-trading-style

 4 months ago (edited)

Hello professor
My assignment is 2 days old and it has not been reviewed.

Here is the link

Please check it out

Thanks

Can I use a forex pair to illustrate my strategy. Or is it compulsory to use crypto asset only @yohan2on?

 4 months ago 

It's compulsory to use a Crypto asset since cryptocurrency is the main topic of the cryptoacademy.

Yeah sure, Just wanted to confirm

Hello professor, I would like to participate, but it is not very clear to me what is the task to follow.

 4 months ago 

The task is all about demonstrating your understanding of Swing trading. You can use any strategy of your choice. I have listed out my expectations. They should act as a guideline for you. Otherwise, I am also looking out for your creativity on how you will be presenting your work.

Thank you very much professor, I have become clearer about the task!

Hello teacher, I hope you are very well, here I leave my homework. I hope you like it and comply with what is required

 4 months ago 

Prof my assignment is 3 days old
I think you missed it

Please review

https://steemit.com/hive-108451/@awesononso/crypto-academy-week-14-homework-post-for-yohan2on

Hey professor thank you for amazing lecture here is my homework

Steemit Crypto Academy | Season 2: week 7 - The Swing trading style [email protected]

 4 months ago (edited)

good afternoon teacher @yohan2on a big hug and greetings @ franklin.tsosa here the assignment in response to the homework please correct it.
https://steemit.com/hive-108451/@franklin.tsosa/steemit-crypto-academy-or-season-2-week-7-the-swing-trading-style-por-franklin-tsosa

 4 months ago 

Greetings Professor @yohan2on. I was able to complete your assignment, I hope I did a good job.

Greetings and blessings

https://steemit.com/hive-108451/@lenonmc21/crypto-academy-week-15-homework-post-for-yohan2on

 4 months ago 

Thanks for delivering a great lecture professor @yohan2on. I present my task's link to you below. Thank you, sir.

https://steemit.com/hive-108451/@fredquantum/2u3aai-crypto-academy-week-15-or-homework-post-for-yohan2on-or-the-swing-trading-style

 4 months ago 

Hello professor @yohan2on, I have up to 100SP in my wallet now, please review my homework post, thanks.
https://steemit.com/hive-108451/@anselam/steemit-crypto-academy-week-15-homework-post-for-professor-yohan2on-swing-trading

Greetings professor @yohan2on I hope you are successful in your activities, below I attach the link of my participation of the assigned task.

https://steemit.com/hive-108451/@adnanyassin/steemit-crypto-academy-or-season-2-week-7-home-work-post-for-professor-yohan2on-on-the-swing-trading-style

 4 months ago 

disculpe profesor corregí mi enlace por error en el enlace anterior

Greetings professor @yohan2on, I made a small correction in one of the graphics, I attach again the link of my participation.

https://steemit.com/hive-108451/@madridbg/steemit-crypto-academy-or-season-2-week-7-the-swing-trading-style-by-madridbg

Hello Professor, Hope you are fine and doing great.

Here is My Homework Task of this week which is not graded

https://steemit.com/hive-108451/@salmanwains/crypto-academy-week-15-homework-post-for-professor-yohan2on

Dear Sir, I have submitted homework 2 days ago but it is not reviewed yet. Please look into it.
Here is link to my post.

https://steemit.com/hive-108451/@atulboss/steemit-crypto-academy-or-season-2-week-7-the-swing-trading-style-homework-work-by-yohan2on

GOOD MORNING TEACHER EXCUSES YOU HAVE NOT CORRECTED MY HOMEWORK. PLEASE IF YOU ARE IN HELPING ME I WOULD BE THANK YOU. GOOD DAY.
https://steemit.com/hive-108451/@franklin.tsosa/steemit-crypto-academy-or-season-2-week-7-the-swing-trading-style-por-franklin-tsosa

Hello [email protected] i kindly want to bring to your notice my work which has not been voted and it's been ovee 2 days now thanks and God bless
https://steemit.com/hive-108451/@samuelj/steemit-crypto-academy-or-season-2-week-7-the-swing-trading-style