Jul 31, · Swing trading is a very popular trading approach for digital currency traders as the price of bitcoin and other digital assets regularly show sharp price swings over the course of a week. . Sep 21, · Swing Trading ‘A Good Approach’ When polled by Bitcoin Market Journal, several market analysts spoke in favor of using swing trading for bitcoin. “I think swing trading is a good . Swing trading is one of the most basic trend following trading techniques. It has got the advantage that it is mostly based on chart patterns which can be detected without a great lag. Thus it avoids a lot of the .
Swing trading btcHow to Use a Bitcoin Trading Bot for Swing Trading - Bitcoin Market Journal
This approach, which involves holding positions for as little as overnight and for as long as several weeks, is a great way to take advantage of trends in the market. Day traders by definition will not hold positions overnight, so they sell before markets close. When polled by Bitcoin Market Journal, several market analysts spoke in favor of using swing trading for bitcoin. Arthur Hayes, co-founder and CEO of BitMEX , offered similar input, stating that bitcoin is volatile enough to support swing trading, as well as many other trading strategies.
As for specific tips, analysts offered a handful of suggestions. Investors who are new to swing trading might leverage these suggestions to obtain better results. Embrace Flexibility. Limeres notes that one major benefit of swing trading is that it offers traders flexibility. Follow The Trend. Investors who leverage swing trading should always trade in the direction of the weekly or monthly trend, as doing so will increase their chances of making profitable trades, notes Zivkovski.
Have a look at the chart below and you will see how useful this simple definition can be. I did not mark all swing points — can you find the missing ones? Swing High: a high with a lower high on the left and right, Swing Low: a low with a higher low on the left and right. If the daily swing points show too much noise, just switch to a higher time frame and apply the same technique on weekly or monthly charts. You could also stay on the daily chart and build second order swing points.
Then a 2nd order swing high would be defined as a swing high which is surrounded by lower swing highs. Remember, it is a trend following trading technique, and so some kind of trend definition is needed. Otherwise you are buying high and selling low in a sideway market — and this would kill you within a few trades. One way to tackle this problem would be to observe the position of the swing points against each other. Remember Dow theory: an uptrend is defined by rising highs and rising lows. So you could define the buy signal as follows: buy, if the market trades above the last swing high AND the last swing low is above the swing low before.
Another way to solve the problem would be to use some kind of trend filter. For the strategy shown in and over here I use two moving averages.
Therefore I calculate 2 moving averages which will later be used for detecting the trend. In I used a 54 and a 21 day average:. The trend detection and the entry signal long is quite straight forward and consists of three conditions:. If all three conditions are true the strategy buys as soon as the previous swing high is touched or broken.
To exit the position just have a look at the first picture in this article: Exit Long sell to close if the bitcoin market falls below its previous swing low.
To reduce the risk of an open position even further, I raise the exit stop to the entry level 5 days after entry. This gets you out early in dull markets, without sacrificing too much of the upside potential.
How to Swing Trade Using a Bitcoin Trading Bot Bitcoin trading bots enable digital currency traders to deploy trading strategies in a fully automated fashion using pre-determined parameters that are set by the user. Step by Step, With Photos. Best Cryptocurrencies to Mine with a PC. How to Invest in DeFi. Join our Newsletter and Join the New Rich. Receive Free E-mail Updates. You should, too. Sign Up.