May 30, 2024

10 min

Crypto Swing Trading For Beginners

Successful traders are always on the lookout for ways to capitalize on the dynamic movements of the cryptocurrency market. Swing trading provides a golden opportunity to capture short- and medium-term trends and turn them into profit. In this article, we’ll break down swing trading techniques, show you how to apply them effectively, analyze key market signals, and manage risks to help you achieve consistent results.

What Is Swing Trading Strategy In Simple Words?

Swing trading is a style of trading where positions are held for several days or even weeks, aiming to profit from short-term market fluctuations. Think of it as a blend between day trading and long-term investing.

Imagine crypto prices moving like waves on the ocean. Swing traders try to catch these waves at the right moment—buying when the price dips and selling when it rises. The goal is simple: ride short-term trends for profit while minimizing exposure to long-term market risks. This approach is perfect for those who want to stay active in the market without the pressure of constant intraday trading.

How To Do Swing Trading Guide On Crypto Exchange?

Learn Swing Trading Basics: Before diving in, get a solid understanding of how the crypto market works. Study the fundamentals of trading, explore technical analysis, and learn to recognize price movement patterns. Pay special attention to indicators commonly used for swing trading, like moving averages, RSI (Relative Strength Index), and MACD (Moving Average Convergence Divergence).
Choose and Register on a Reliable Crypto Exchange: Your exchange matters. It should offer advanced trading tools, a secure environment, and a user-friendly interface. For example, WhiteBIT, the largest crypto exchange in Europe per traffic, is a solid choice. It has been thoroughly audited by the leading cybersecurity provider Hacken.io and boasts a top AAA rating on the CER.live certification platform.
Use a Demo Account for Practice: Start with a demo account to test your strategy without risking real money. It’s a safe space to learn, make mistakes, and fine-tune your skills before going live with actual funds.
Fund Your Account and Develop a Trading Strategy: Set clear goals and define your risk management rules. Build your swing trading strategy around key indicators like moving averages, RSI, or MACD. Once you’re ready, deposit funds into your trading account.

💡 Pro tip: If you want to experiment with multiple strategies, take advantage of WhiteBIT Sub-Accounts. You can create up to 10 additional accounts to test different strategies while keeping your main account secure. Sub-accounts come with the same perks as the main account, like fee discounts and bonuses.

Best Time Frame For Swing Trading

When it comes to swing trading in crypto, the best timeframes typically range from 1-hour to 1-day charts. These timeframes strike the right balance between spotting short-term trends and capturing larger market moves over several days or weeks.

1-hour charts are perfect for identifying precise entry and exit points, helping you catch short-term price movements.
Daily charts, on the other hand, provide a broader market perspective, helping you confirm long-term trends and avoid trading against the bigger picture.

By combining these timeframes, swing traders can maximize their chances of catching profitable market fluctuations while minimizing the noise of smaller, less significant price changes.

Risks Management

Effective risk management is a non-negotiable aspect of successful swing trading. Even the most promising trade setups can turn against you, so a well-thought-out risk strategy is essential for long-term success. Here are the key principles to keep in mind:

Determining Risk Level: Decide in advance how much of your capital you’re willing to risk on a single trade—typically no more than 1-2%. This simple rule protects your capital and prevents catastrophic losses in case a trade goes south.
Setting a Stop Loss: Always use a Stop-Loss Order to limit potential losses. A stop loss automatically closes your trade if the price hits a pre-set level, saving you from emotional decision-making during volatile market swings.
Diversification: Never put all your eggs in one basket. Spread your risk across different cryptocurrencies or market directions. This reduces the impact of any single trade on your overall portfolio.
Analyzing and Reviewing Strategy: Keep a trading journal to log your trades, strategies, and outcomes. Regularly review your performance, analyze what works, and tweak your strategy as needed.
Emotional Control: Emotions are your biggest enemy in trading. Stick to your plan and avoid impulsive decisions driven by fear or greed. Trust your strategy and remain disciplined, even during rough patches.

The crypto market can be unpredictable. Stay flexible and adapt your strategy based on market conditions while keeping your core risk management rules intact.

Swing Trading Tools

Successful swing trading in crypto is impossible without the right tools. Technical analysis provides traders with essential indicators to make informed decisions, determine optimal entry and exit points, and manage risks effectively. Let’s break down the key tools every swing trader should master.

Indicators

Moving Averages (MA): Moving averages smooth out price data and help identify trends.
- Simple Moving Average (SMA) and Exponential Moving Average (EMA) are the most popular.
- Short-term MAs (like the 10-day) react faster to price changes and are great for spotting quick trends, while long-term MAs (like the 50-day) help you focus on the bigger picture.

Relative Strength Index (RSI): The RSI measures the speed and magnitude of price changes, helping traders identify overbought and oversold conditions:
- Above 70: The asset might be overbought and due for a correction.
- Below 30: It may be oversold and ready for a rebound.
  RSI is your go-to tool for spotting potential trend reversals.

MACD (Moving Average Convergence Divergence): MACD highlights the relationship between two moving averages and shows crossover points. These crossovers are powerful signals for identifying potential entry or exit opportunities.

Bollinger Bands: Bollinger Bands help measure volatility. When the price breaks out of the bands, it often signals that the asset is either overbought or oversold, indicating a potential reversal or a breakout move.

Support and Resistance Levels

Support level crypto are core concepts in swing trading. They help predict potential trend reversals:

Support: A price level where demand is strong enough to stop the price from falling further. It’s where prices often bounce upward.
Resistance: A price level where selling pressure prevents further upward movement, often causing the price to reverse downward.

Mastering these levels will give you a major edge in identifying optimal entry and exit points.

Patterns

Technical analysis patterns are visual tools that help forecast price movements. Here are some of the most common:

Head and Shoulders: This pattern signals a trend reversal. It consists of three peaks — one large peak (the head) between two smaller peaks (the shoulders). When this forms, expect a potential downward move.
Double Top and Double Bottom:
- Double Top appears after an uptrend and suggests a bearish reversal.
- Double Bottom forms after a downtrend and indicates a bullish reversal.
Triangles: These patterns show consolidation and usually signal an upcoming breakout.

Wave Analysis

Wave analysis provides a deeper understanding of how markets move in cycles.

Elliott Waves: Markets move in five impulse waves in the direction of the primary trend, followed by three corrective waves. This framework helps traders forecast future price action by recognizing recurring wave patterns.
Fibonacci Retracement: Used in wave analysis to identify correction levels and potential reversal points. Key Fibonacci levels include 23.6%, 38.2%, 50%, 61.8%, and 78.6%. Swing trading with Fibonacci retracements helps determine the extent to which a price may retrace before continuing the trend, which is particularly useful for swing traders in setting Stop-Loss and Take-Profit orders.

Swing Trading vs Day Trading

Let’s break down the key differences between swing trading and day trading, so you can decide which style fits your goals and lifestyle best:

Criterion	Swing Trading	Day Trading
Time Horizon	Several days or weeks	Trades within a single day
Trade Frequency	Low (fewer trades)	High (many trades)
Risk/Reward	Moderate risk and reward	High risk and potential high reward
Volatility	Moderate	High
Trading Costs	Lower (fewer commissions and transactions)	Higher (more commissions and transactions)
Suitable For	Hobby traders with limited time	Professional traders with ample time

Swing vs day trading rely on technical analysis but differ in their approaches. Day traders work with short time frames, quickly reacting to market changes, whereas swing traders prefer longer intervals and moderate volatility. Day trading incurs higher commission costs due to frequent trades, while swing trade crypto is more cost-effective. Swing trading suits those who cannot constantly monitor the market, whereas day trading requires full engagement. It is also important to note that swing trading cryptocurrency demands less time for learning than day trading, which requires a deep understanding of the market and significant experience.

Practical Comparison

Both swing trading and day trading rely heavily on technical analysis, but the approach and time commitment are very different.

Day traders live and breathe market movements, working with short timeframes and reacting quickly to every spike or dip. This fast-paced strategy requires constant market monitoring and a high tolerance for volatility.
Example: If you’re day trading BTC on a 5-minute chart, you might open and close multiple trades in a single hour, aiming for small but quick profits.
Swing traders prefer a more laid-back approach, holding positions for days or weeks. They focus on capturing larger price moves while avoiding the noise of intraday fluctuations.
Example: As a swing trader, you might buy ETH at $1,500 and hold it for a week, targeting a $200 price increase based on a strong technical setup.

Key Factors to Consider

Trading Costs: Day trading can get expensive due to higher trading fees from frequent transactions, especially if you’re trading on lower timeframes. Swing trading, on the other hand, is more cost-effective since you execute fewer trades.
Time Commitment: Swing trading is ideal for traders who can’t monitor the market 24/7. It offers a balance between active involvement and personal freedom. Day trading, however, demands full engagement and fast decision-making, which can be exhausting without the right experience.
Learning Curve: Day trading requires a deep understanding of market structure, lightning-fast reaction times, and experience with multiple indicators. Swing trading is more beginner-friendly, giving you time to plan trades without pressure.

If you’re just starting, swing trading might be the safer option. It allows you to develop your skills while managing risk, and it’s easier to integrate into your daily life compared to the full-time grind of day trading.

Pros and Cons of Swing Trading

Benefits of Swing Trading

Swing trading strikes a balance between time commitment and profit potential, making it appealing for traders who want to stay active without being glued to their screens. Here are the key advantages:

Less Time-Intensive. Unlike day trading, swing trading doesn’t require constant market monitoring. It’s ideal for traders with full-time jobs or other commitments. You can check the market once or twice a day, make adjustments, and let the market do the work.
Lower Trading Costs. With fewer trades, you pay less in commission fees, which means more profit stays in your pocket.
Moderate Risk and Reward. Swing trading offers a good balance—lower risk than day trading but higher potential rewards than long-term investing. You focus on short-term price swings without diving into the intense volatility of intraday trading.
Beginner-Friendly. It’s a great entry point for those new to trading. Swing trading gives you time to analyze the market and learn the ropes without the pressure of making split-second decisions.

Example: You might buy SOL at $20 after spotting a bullish trend and hold it for a week, selling it at $24—a solid 20% gain without stressing over every 5-minute candle.

Disadvantages of Swing Trading

While swing trading has plenty of perks, it’s not without its challenges:

Missed Short-Term Opportunities. Since you’re holding positions for days or weeks, you might miss quick intraday moves that could generate fast profits.
Emotional Stress. Holding trades overnight or for extended periods can be nerve-wracking, especially during market corrections. It takes discipline to stick to your strategy and not panic.
Requires Solid Technical Analysis. Successful swing trading demands a good grasp of technical analysis. You’ll need to identify trends, key levels, and use indicators like RSI and moving averages to time your trades.

Example: Let’s say you hold BTC for a week, only to watch it drop 10% before bouncing back. Without a clear strategy and stop-loss, this kind of volatility can lead to bad decisions driven by emotions.

Conclusion

In my experience, swing trading is one of the most balanced strategies for anyone looking to stay active in the market without the stress of constant monitoring. It’s a perfect middle ground—less intense than day trading but still offering plenty of opportunities to profit from market swings.

If you’re just starting, I’d say swing trading is a great place to learn the market rhythm. It gives you time to analyze, make informed decisions, and build your confidence. Plus, the reduced trading frequency keeps your transaction costs low, which helps protect your capital in the long run.

That said, it’s not a “set and forget” strategy. You’ll still need to stay updated on market trends, understand key technical indicators, and most importantly, stick to your plan. Emotions can be your worst enemy in swing trading. Trust me, I’ve learned that the hard way.

Ultimately, success in swing trading comes down to discipline and adaptability. The market will test your patience and your strategy, but if you approach it with a clear mind and a solid risk management plan, you’ll be in a strong position to grow your portfolio.

So, if you’re ready to step into swing trading, don’t rush—study the market, choose your trades carefully, and enjoy the process. After all, the best traders aren’t just chasing profits; they’re constantly learning and refining their game.