All You Need to Know About Swing Trading

i-dev Software Group
10 min readOct 28, 2021


All You Need to Know About Swing Trading

All You Need to Know About Swing Trading

Swing Trading is a trading style in financial markets such as Stocks, Forex and digital currency. This trading style, along with several other styles, has accounted for the majority of transactions in the cryptocurrency market. To determine the time entered in an oscillating trade, certain indicators and tools should be used.

Cryptocurrency swing trading

What is Swing Trading?

Swing Trading is one of the most common trading styles along with Day Trading and Position Trading. This strategy may be the best trading method for beginners because it is slower than the daily trading and this gives traders more opportunity to control all positions and find the best entry points.

In a swing trade, the trader keeps his position open until the next day or even a few days or weeks. In this article from, we will discuss the most popular volatility indicators used in cryptocurrency trading. All of these indicators are related to the Forex market and the digital currency market, and this shows their widespread use.

Swing trading indicators are technical analysis tools that reveal certain aspects of Price Action for the trader to make better decisions. All technical indicators analyze prices from different perspectives based on historical data, so it is incorrect to say that indicators can predict the future of prices.

Many cryptocurrency market participants are also completely careless and turn to long-term investment.

how swing trading is implemented?

Before we get into the details of the best volatility indicators, let’s take a closer look at the volatility trading process. A volatility is a type of trading that involves different strategies and behaviors that have several aspects in common with the timing of the trade. Although this trading method is commonly used in the Forex and stock markets, it also works well in the cryptocurrency market.

In swing trading, traders hold their position open for several days or weeks as long as the trend moves in the direction they want. They only exit the trade when they see signs of a reversal. Given that volatile traders work for longer periods of time, unlike daily traders, they do not pay attention to short-term price fluctuations.

For volatile traders, the only thing that matters is that in the bullish markets, swings are formed over time at higher levels and in the bearish market, swings are formed at lower levels.

Swing trading shown on real market chart

What is a Swing High?

The peaks are in fact consecutive peaks that arrive before the fleeting moments of price correction. Sometimes correction can turn into a reversal of the trend, in which case the formation of higher peaks stops. If the current high is higher than the previous peaks, it can be said that the general trend is upward.

What is Swing Low?

The valley means successive floors that the price touches before returning to the top. If the current low is lower than the previous valleys, it can be said that the general trend is downward. Some swing traders prefer to trade only between peaks and valleys, which usually turns into a shorter version of the swing trade.

Cryptocurrency Swing Trading Training

Here are some practical steps you can take to begin the process of preparation for mediation. However, the best way to master this process is to practice constantly.

First step; Identify the general trend

Initially, the trader should identify a strong uptrend or downtrend on a chart over a longer period of time, such as weekly or monthly.

Second step; Identify trend reversal signals

This step is essential in identifying the best entry point and making the most of the price movement. For example, the formation of monthly valleys at rising levels after a long downtrend can be a clear sign of a change in market direction. Yet, traders often use several technical indicators to confirm or disprove such theories.

Third step; Identify the entry point

When the trend reversal is determined, traders zoom in on the swing trading chart to find the right entry point in shorter intervals. At this stage, technical analysis is usually used along with the basic situation and general feelings of the market to understand the bigger picture of the market.

The fourth step; Identify profit targets and prices

Scalpers usually think big and try to take advantage of large market fluctuations. They use support and resistance levels, as well as Fibonacci correction and extension lines, to identify dangerous areas and when the market is approaching these areas.

Traders either sell their assets and make a profit as they approach the resistance level, or maintain and increase their position, depending on other factors such as trading volume, candlestick patterns and market sentiment.

Step Five; Determining the stop loss

Loss limit is one of the requirements of any trading strategy that allows the trader to manage risk and limit losses. In fluctuating transactions, the constitutional limit of loss applies. It is usually recommended to set the potential loss in the range of 2 to 5 percent of the trading amount, but it is the trader who should determine the loss limit of his trades based on the risk tolerance and market conditions.

What is an indicator?

This indicator is a type of analysis tool that uses mathematical calculations to identify various aspects of price action based on historical data. Any technical analysis indicator used by volatile traders to assess the market situation on daily charts and other charts is called a volatility indicator.

Diversity of indicators on the chart

Technical analysis indicators help traders to be aware of the uptrend or downturn of the market and the existence of momentum and acceleration in trends. While some volatile traders trade based on news and fundamental analysis, it is essential to use technical indicators to identify the best entry and exit points. The swing trader utilizes these indicators to determine or identify the best possible strategy for maximum profit.

The three most important types of volatility indicators are:

Trend Indicators

These indicators show the trader where the market is heading and whether it is possible to detect the trend at all. In general, trend indicators are used to offset price fluctuations in order to find the main trend. Moving average is the most popular example of trend indicators.

Momentum indicators

These indicators show how strong the trend is and whether the trend may change direction. These indicators can be used to identify buying and selling saturation levels. The most popular example of motion indicators is the RSI (Relative Strength Index).

Volume indicators

Volume is one of the most important indicators that shows the amount of trading activity of traders at a given time.

The importance of the swing trading indicators

while swing traders do not use technical indicators as much as daily traders, they will certainly not succeed without using these indicators. Fluctuation indicators are a requirement of a trader and are an undeniable part of a successful trader’s toolkit.

Using a reliable technical indicator or a combination of indicators can increase the accuracy of trading signals many times over. Trading without the use of indicators is like walking with your eyes closed.

The best indicator for swing trading

The following is a list of the best swing trading tools that have become popular among traders due to the simplicity and efficiency of their trading signals. It should be noted, however, that these indicators can in no way guarantee 100% profitability for the trader. The main reason for this weakness is that technical indicators do not predict the future, but help the trader to get a better picture of the present and the past.

Resistance and support lines

swing traders should always work with resistance lines because support lines are the most relevant tool in assessing the price levels of an asset that the price has difficulty crossing. In short, resistance is a hypothetical line that the price has difficulty breaking and usually retreats from that level.

Support is a hypothetical line drawn from recent lows, indicating that prices have not fallen further at this level and have moved up again. If the price breaks any of these lines, it will usually continue to move in the direction of failure.

Price Patterns

Oscillating traders can identify patterns that are commonly formed on candlestick charts and use their signals. These patterns fall into two main categories:

  • Continuing trend patterns, which predict the continuation of the trend. Patterns of triangle, rectangle, flag and triangular flag are among these patterns.
  • Reversible trend patterns, which indicate a change in the direction of the trend. The double top or bottom and the head and shoulders are the most important return patterns.

What are the best swing trading strategies?

Success in a swing trade requires not only the right tools and indicators, but also the right strategy.

Resistance breakout

This strategy requires the use of indicators such as volume data and moving average to identify the signal of a sudden upward movement in the market. As soon as a key resistance level is broken, the trader enters the buy position and keeps his position open until the price ceiling is reached. Since the uptrend may continue for several days, the volatile trader should always be vigilant and exit the market at the best time.

Support Breakout

The strategy of failure is to exit a trade or open a sell position just before the price falls. This strategy, also known as descending failure, is the opposite of the failure strategy described above.

Correction strategy

In the corrective strategy, the trader seeks to find moments in the market where the price is on the verge of a temporary change of direction. This strategy can be considered a trend within a larger trend.

The RSI is a good indicator of this strategy as it can indicate the starting point of a price reversal. As this change in price directions is temporary, volatile traders must carefully determine when to change position or exit the market.

Trend reverse

A trend reversal strategy is used when a sequence of higher highs and higher lows turns into a downtrend involving lower highs and lower lows (or vice versa). Moving price below the moving average can be a sign of trend change.

Benefits of swing trading

Swing trading has several advantages, including:


The swing trading method can be used in many markets and financial instruments. Oscillation techniques can be used to predict the price of assets such as Bitcoin, Atrium and Light Coin; Or this method can be used to trade ordinary and traditional assets.


There are many online resources to succeed in swing trading. E-books, video tutorials, PDFs, apps, tutorials, and countless websites can help. All of these resources can give the trader very useful tips for use in Forex market strategies and public trading, and guide him in identifying patterns.


The trader can trade volatility using Japanese candles and a variety of other techniques on various platforms from RobinHood to MetaTrader. It is also possible to use automated robots and specialized consulting software (EA). With the right use of these tools, much more trading can be done compared to manual mode.


If you have the qualities needed to succeed in day trading, you may also have the qualities to work in volatile trades. For example, are you patient enough? Do you have a problem with having a large loss limit? Would you like to trade less instead of trading a lot, but be very careful about entering into these trades? If the answer to these questions is yes, you may have the characteristics and discipline to become a successful swing trader.

Risks of Swing Trading

Before you leave your job for a living through a swing trading career, it is best to consider the disadvantages of this trading method:

Market risk

The first rule is that there is definitely the possibility of losing in this market. Although it may seem simple to some people to make a loss, any mistake you make in this market will painfully waste your capital. Unfortunately, traders often pay a heavy price to learn from the market, and that is the nature of speculating about the market. In addition, trading using margin and leverage can inflict far greater losses on the trader than the initial capital.


A swing is not a type of trade that enters a position and resumes after a week or more. Fluctuation is a live trading method in which the strategies used in the trade must be constantly monitored. Given this, it can be seen that it is very difficult to manage a full-time and fluctuating job at the same time.

Risk Management

Whether you are interested in trading low-value stocks or using algorithmic services, you may lose your capital if you do not implement an effective risk and money management strategy. As Harry Light, a successful trader, puts it, “Throughout my career, I have always seen people I knew had failed because of their lack of financial life risk. If you do not take the risk seriously, it will do the job.”


Are you interested in working in a dynamic and fast trading environment? Are you in a hurry to find out right away if you made the right prediction? In that case, you may not have the mentality to get rich and dominate the swing trade.

Moving average convergence divergence (MACD) indicator

In Conclusion

Swing trading seeks to capitalize on the upward and downward swings in the price of a Crypto. Traders hope to get small moves within a larger overall trend. Swing traders aim to make a lot of small wins that add up to significant returns. For instance, other traders might wait 3 months to earn a 30% profit, while swing traders may earn 5% gains weekly and then exceed the other trader’s gains in the long run.



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