How to Swing Trade Crypto in 2023?

As the cryptocurrency market is becoming increasingly more mainstream, crypto enthusiasts are looking for the best possible methods of earning a potential profit on their investments. Oftentimes, it boils down to the trading strategies that you utilize - HODLing, swing trading, day trading, and so on. In this article, we’ll talk about how to swing trade crypto, for beginners

Indeed - swing trading is one of the most popular of these mentioned strategies. It is thus important to at least learn and understand it, even if it’s not a strategy that you would employ, personally. In doing so, you’ll be able to both become more familiar with how the market works, as well as understand how other traders think, too.

The above is especially true when you consider the fact that swing trading crypto is one of the more crypto knowledge-demanding strategies, as well. I’m getting ahead of myself, however - let’s first get the descriptions out of the way, shall we?

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What is Swing Trading in Crypto?

So - the very first thing that we need to talk about when looking into how to swing trade crypto is the definition of the actual term itself.

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Essentially, swing trading refers to holding open positions on the market for amediumamount of time. In the context of crypto, this would be anywhere from a couple of hours, up to a few days at a time.

By definition, this makes swing trading rather self-explanatory, right? Well, yes - to an extent. However, cryptocurrency swing trading is actually much more complex than that - the complexity stems from the actual process of trading your select cryptos successfully.

How to swing trade crypto: a physical BTC coins on a paper chart.

Going back to the actual concept at hand, crypto swing trading can be viewed as a sort of a middle ground between two other large trading strategies - HODLing, and day trading. Crypto HODLers are long-term traders - in many cases, these individuals don’t even consider themselves to be traders, in the first place, and enter the realm of investors, instead.

Day traders, on the other hand, focus on the short term - a typical day trader will perform multiple different traders throughout the same day. Keeping this in mind, you can now see how swing trading falls in the middle.

To understand how to swing trade crypto, let’s take a look at an example of a typical swing trade:

Imagine that you’ve analyzed the market, and have decided that you want to swing trade BTC. You’ve figured out what is swing trading crypto, have done the maths, and came to the conclusion that BTC will keep on rising in price, for a couple of days.

How to swing trade crypto: candlestick chart.

So, you open a long position for BTC - essentially, you’re betting that the price of Bitcoin will keep increasing, just as your technical analysis has predicted, and that there won’t be any less-than-positive surprises.

If the trade is successful, you profit. If not, you’ve probably put a stop-loss in place, so your losses should ideally be at a minimum.

Pretty self-explanatory, right? Well, as you can imagine, there are many details hiding in the background - the gist of how to swing trade crypto, however, is essentially that.

How to Swing Trade Crypto: Three Key Factors to Consider

In order to understand crypto swing trading, and be able to try and do it yourself, you will essentially need to figure out three key points that make up this concept - project fundamentals, technical analysis, and timing.

Project Fundamentals

Project fundamentals are the thing that people tell you to “do your own research” about. Essentially, it’s the process of figuring out whether or not your crypto project of choice has a strong foundational basis, and thus, a long-term outlook, or if it’s essentially a quick cash-grab, and should thus be avoided.

We’ll talk about a few of the best cryptos to swing trade later in the article, but for now, just keep in mind that, without some proper fundamentals, learning how to swing trade crypto can be a rather futile process. What are these “fundamentals”, though?

How to swing trade crypto: a trader checking in on their portfolio.

Admittedly, this is a topic for an entirely separate article, in and of its own. That being said, key fundamentals include a solid group of founders, a clear and well-thought-out project purpose, and logical and fair tokenomics, among other things.

Before you go out and start to apply your knowledge of how to swing trade crypto, it is your responsibility to make sure the asset that you’re looking into has some strong fundamentals behind it. After all, it can really be the thing that “makes it or breaks it”, as far as your swing trading cryptocurrency adventure is concerned!

Technical Analysis (TA)

Technical analysis is the other major pillar of swing trading. So much so, that some traders will tell you that it’s “the core aspect” that you need to study and understand, in order to be successful when trading crypto this way.

Technical analysis involves looking at historical cryptocurrency price charts, and making certain conclusions about where the price of the asset will go in the future, based on certain patterns. This study of charts is, admittedly, rather complex, and isn’t a guaranteed outcome-producing concept, either. Instead, you’d try to crack into the psychology of the market, and predict whether or not it will follow the aforementioned patterns.

You can probably see how technical analysis can be crucial in your swing trading ventures. Even if it’s not a surefire way of earning potential profits (no method is, really!), with proper TA skills on your side, you’d be able to react to the market in a much faster and more-informed manner.

How to swing trade crypto: a crypto trader checking asset prices.

On top of that, you’d have a major advantage over everyone else who’s trying to learn how to swing trade crypto without researching technical chart analysis at the same time!

That said, though, how does one learn TA? Well, truth be told, it’s usually a combination of some credible learning material, combined with personal experiences and practice. The thing that often puts newcomers away is the variety of different terms and concepts that you need to learn, in regards to technical analysis.

With the right resources, however, these terms shouldn’t prove to be a major headache to crack. On top of that, if you’re just looking to start out with swing trading, you should only focus on the key points and terminologies, without jumping too far down into the rabbit hole from the very start.

My point here is that there are multiple ways to approach this!

“Timing the Market” VS “Time in the Market”

Lastly, timing. Admittedly, this isn’t really something that you can “study” or “learn” - it’s the most luck-based aspect of the three that we’ve talked about, up to this point in the crypto swing trading guide.

You can, however, increase your odds when it comes to timing the market. This would essentially be done with the help of in-depth knowledge of how cryptocurrency markets work, in general.

What do I mean by that? Well, if you’re well-aware of what’s happening on the market (any major news? Any big crypto-related events? Maybe some major update to a top-10 coin is about to happen, in a couple of days?), you might be able to predict of how other investors and traders will act and react, as well.

How to swing trade crypto: physical crypto coins on a $20 bill, on a Binance crypto chart.

That, in turn, could be interpreted as “timing the market”. Do keep in mind, however, that it’s not really worth trying to “time” every single cryptocurrency swing trading activity that you’ll be performing - instead, you should focus on the more tangible aspects, such as the fundamentals of the project, as well as technical analysis.

This is where “time in the market” comes into play, as well. It’s a bit of a play on words, but essentially, it refers to the trader’s experience and knowledge within this particular financial market. The more experienced you are, the better your intuition and analytical thinking skills will get, which would theoretically mean better timing of the market trends, as well.

Naturally, as you can probably see rather clearly, this aspect is quite subjective. This is why, while accounting for it, you should still focus largely on the two main “pillars” we’ve talked about above - the fundamentals of your chosen crypto project, and the technical analysis of the asset’s price history.

Swing Trading VS HODLing VS Day Trading

Now that you’re aware of what is swing trading crypto, as well as what are some of the core aspects that go into this trading strategy, it’s also worth comparing and contrasting swing trading with the two other major strategies that I mentioned earlier - HODLing and day trading.

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Swing Trading VS HODLing

I’ve said it once, and I’ll say it again - yes, HODLing isn’t necessarily a crypto trading strategy, in itself. Instead, it’s actually more often viewed as an investment method. That being said, it’s exactly what makes the two concepts in this subchapter so different, in the first place.

As a HODLer, you’re going to acquire some cryptocurrency, and then frankly forget about it, for a very long period of time. This is mostly done by investors who have a huge amount of confidence in the project whose coins or tokens they are acquiring (fundamentals!).

The bet of the HODLer is often that the crypto asset will grow in price, significantly, in the next few months or even years, and that they’ll be able to cash out then. This, in turn, eliminates the stress associated with active trading, as well as the need to perform technical analysis (in many cases, at least).

So… Is learning how to swing trade crypto even worth it, then? Well, yes, most definitely!

How to swing trade crypto: physical crypto coins on a mobile phone.

While swing trading cryptocurrency is going to require a lot more effort and involvement on the trader’s part, when compared to HODLing, it also has the potential to be much more rewarding, especially in the short term. To add to that, since it’s kind of the middle ground of trading strategies, swing trading is also very accessible to entry-level traders, as well.

What does that have to do with HODLing? Well, quite a few beginner investors choose to exclusively HODL their cryptocurrencies, and not participate in any other active trading activities. While that would be fine, in and of its own, the catch is that many of these investors *would* be willing to trade crypto, but fear the steep learning curves associated with technical analyses and strategies such as arbitrage or scalping.

Learning how to swing trade crypto, as I’ve mentioned above, is one of the most newbie-friendly methods of getting into crypto trading. Sure, there will be TA involved, but even so, it’s a great opportunity to start studying it, as well!

Swing Trading VS Day Trading

As a direct opposition to HODLing, on the other end of the spectrum, you have day trading. Indeed, while cryptocurrency swing trading and day trading might have a bit more in common than swing trading and HODLing, active day trading and HODLing couldn’t be more different.

Day trading is sometimes seen as a full-time job - one that doesn’t really guarantee that you’ll receive a salary at the end of the month. This is because, while day traders perform multiple trades during the same day, the minority of people who utilize this trading strategy as their primary approach to the crypto market actually come out with a profit.

How to swing trade crypto: a crypto trading dashboard.

The complexity of this trading strategy stems from the immense volatility of the crypto market, as well as the stressful nature of the strategy itself. Why is day trading so popular, then? Simple - the potential rewards are usually huge, as well.

Comparing cryptocurrency swing trading and day trading, you will immediately notice that the former is more relaxed, and allows for a much bigger amount of time between trades (usually). This, in turn, allows for the trader to gather their thoughts, focus on their analysis, and “take a breather”, in a very general sense.

In addition to being less stressful, swing trading crypto can also prove to be a better long-term trading strategy for many crypto enthusiasts, for the reasons mentioned above. Once again, it’s just another major reason why you should learn how to swing trade crypto, even if you don’t plan to do so in the near future!

The Swing Trader’s Toolkit

Up to this point in the “How to Sing Trade Crypto?” article, we’ve already talked about the core foundations of the trading strategy, as well as the things that make it different from other, seemingly-similar strategies, as well.

Now, even though you’re currently knowledgeable about what is swing trading in crypto, it’s essential to talk about all of the useful tools that you might utilize, if you do decide to give swing trading a chance.

Finding the Best Cryptocurrencies to Swing Trade

When you want to start out swing trading, the very first thing that you’ll need to do is find the best crypto to swing trade - that’s kind of obvious. Earlier in the article, I also told you about the key point of how you should search for these “best cryptos” - fundamentals. Or, in other words, you should look into the very core of the projects behind the crypto asset of your choice, and decide if it’s the right option for you or not.

That being said, how should you even go about looking for cryptocurrencies, in the first place? Well, there are a few ways of how you can approach this, with one of the better options being the BitDegree Crypto Tracker.

This tracker houses thousands of different crypto coins and tokens. You may access dedicated landing pages for each of these assets, to view a whole lot of detailed information surrounding the project behind it.

How to swing trade crypto: physical crypto coins on a sheet of paper.

This information would include everything from trading volume, historical price charts, market cap, all the way to things such as social trading signals.

This last one should be paid extra close attention to, by anyone who’s figuring out how to swing trade crypto. It’s a very unique and interesting way of both analyzing the market trends, as well as figuring out whether a certain project is a good fit for you or not.

Social signals include things such as Reddit, Twitter and Telegram statistics, website traffic, and GitHub information. All of these metrics can reveal quite a bit about a certain project, and the general sentiments of the market, as far as the underlying asset is concerned!

How to swing trade crypto: cryptocurrency charts.

Furthermore, it’s also worth mentioning that certain specific cryptos are going to have halvings associated with them - with halvings being points in time where some of the biggest changes to a crypto’s price trend might take place, it’s certainly valuable information that is also available within the tracker!

As a general rule of thumb, though, a good way to start swing trading cryptocurrency is to pick some of the top projects on the market. Many traders will tell you that the top-5 or top-10 assets are usually seen as the most attractive, since they’ve often already passed many of those initial checks that we’ve talked about earlier.

Where Should You Swing Trade Crypto?

Once you’ve chosen a coin or token that you’ll want to trade, the next step is to find a platform that you’ll be performing all of your trades on. Since crypto swing trading is a rather popular phenomenon, it’s probably of no surprise that your options are going to be plenty, as well.

The key here is to focus on cryptocurrency exchanges that have both an established reputation within the space (are reliable, at least to a satisfactory degree), as well as advanced trading features that would allow you to customize your trading experiences (stop-loss functions, multiple order submissions, etc.). In short, you’ll want to be looking for a well-rounded exchange platform.

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Table: Some general information about the Binance and Kraken crypto exchange platforms

If you’d like to check out some of the best crypto exchanges on the market, you can do so via our dedicated list here. Some of the top mentions would include:

  • Binance. One of the largest and most popular crypto exchanges in the world. Great fees, full fiat support, a huge array of assets to pick from, and top-notch security, in general. To add to that, there’s an entire ecosystem of additional features for users to check out.
  • Kraken. If you’re looking at how to swing trade crypto, and are just starting out with trading, in general, Kraken might prove to be one of the better picks. The exchange is beginner-friendly, and offers competitive fees and a solid trading interface.
  • KuCoin. KuCoin is likely going to be a great pick for anyone who’s looking to swing trading crypto, but wants to preserve their privacy as much as possible, in the process. In addition to all of the main features that you could expect, KuCoin also allows its users to trade crypto with limited KYC requirements, to a certain extent.

While there are multiple other high-end options out there, these aforementioned exchanges are some of the leaders in the field, and should definitely suit anyone who’s looking at what is swing trading crypto, and wants to utilize this trading strategy themselves.

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Crypto Storage Options

The last point that you’ll want to look into, in regards to swing trading cryptocurrency, is storage. Specifically, for most traders, the big question will always be this - how can you keep your crypto safe, yet still maintain convenience when trading?

Well, while there are multiple methods of how you can approach this, the usual solution to this conundrum is utilizing two different wallets - a hot (software) one, and a cold (hardware) one.

Hot wallets are known for their convenience. They can usually store a wide array of coins and tokens, and allow the owner to transact with other people or applications in a really quick and effortless manner. The best part? You don’t even need to look for a separate hot wallet, of its own - if you’ll be using a centralized exchange (such as those mentioned above), these platform act as hot wallets, too!

Naturally, keeping your cryptocurrencies on an exchange is a notable security risk. This, however, is where the cold wallet comes in.

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Table: The pros and cons of the Ledger Nano X and Trezor Model T hardware cryptocurrency wallets

The way that swing traders would navigate this is that they would store the vast majority of their assets in cold wallet devices, and then keep a small portion that’s designated for trading on the exchange. This way, you get the best of both worlds - the security of a hardware wallet, and the convenience of a software crypto storage solution.

As far as hardware wallets are concerned, there are two clear leaders in the industry - Ledger and Trezor. Or, to be more specific, if you want to purchase the best possible wallet products from these brands, you’ll need to look into the Nano X and the Model T, respectively.

Both Ledger and Trezor are going to provide their customers with some top-of-the-line functionality and security measures, and thus, should both suit most crypto swing traders’ preferences, as well. The Nano X, however, is much more affordable, and comes equipped with one of the best user interfaces on the market - something worth keeping in mind!

Conclusions

So, then - we’ve reached the very end of our “How to Swing Trade Crypto?” tutorial. By this point, you should have a really good idea of what is swing trading in crypto, in general, as well as how it works and how you yourself can start doing it, too.

As we’ve established multiple times already, swing trading is like the middle ground between really intense crypto trading activities (day trading) and completely passive investment strategies (HODLing). This makes it one of the best trading strategies for newcomers to the field, since its learning curve won’t feel too overwhelming.

At the same time, swing trading is probably among the most popular crypto strategies, in general. I’ve mentioned this a few times already, but even if you’re not looking to utilize it yourself, understanding swing trading can be really beneficial when it comes to analyzing the market, as well as how other traders and investors think and make decisions, too.

If you’re interested in learning about other crypto trading strategies, in addition to crypto swing trading, you can check out our dedicated article on the topic. That said, if you want to learn more about the best crypto to swing trade, or the best exchange or wallet that you could use, I’ve created lists regarding these topics, as well - check them out!

Thanks for reading, and until next time!

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FAQ

What is crypto swing trading?

Crypto swing trading refers to a cryptocurrency trading strategy where you would open a trade for anywhere from a couple of hours, up to a few days. Swing traders aim to capitalize on the short-to-medium-term price movements of the asset. As a strategy, swing trading involves a huge amount of prior research, technical chart analysis, project fundamental analysis, and some proper market timing.

Is swing trading better than day trading?

The answer to this question will depend on who it is that you ask. It's true that many casual crypto enthusiasts prefer learning how to swing trade crypto, instead of day trading. This is because swing trading is (usually) more relaxed, and doesn't require the trader to be present at the screen at all times. Day traders perform tens, sometimes hundreds of trades per day - it's commonly considered to be a full-time job. Swing trading, on the other hand, is more beginner- and casual trader-friendly.

How to pick the best crypto exchange for yourself?

Picking out the best crypto exchange for yourself, you should always focus on maintaining a balance between the essential features that all top crypto exchanges should have, and those that are important to you, personally. For example, all of the best exchanges should possess top-tier security features, but if you’re looking to trade only the main cryptocurrencies, you probably don’t really care too much about the variety of coins available on the exchange. It’s all a case-by-case scenario!

Which cryptocurrency exchange is best for beginners?

Reading through various best crypto exchange reviews online, you’re bound to notice that one of the things that most of these exchanges have in common is that they are very simple to use. While some are more straightforward and beginner-friendly than others, you shouldn’t encounter any difficulties with either of the top-rated exchanges. That said, many users believe that KuCoin is one of the simpler exchanges on the current market.

What is the difference between a crypto exchange and a brokerage?

In layman’s terms, a cryptocurrency exchange is a place where you meet and exchange cryptocurrencies with another person. The exchange platform (i.e. Binance) acts as a middleman - it connects you (your offer or request) with that other person (the seller or the buyer). With a brokerage, however, there is no “other person” - you come and exchange your crypto coins or fiat money with the platform in question, without the interference of any third party. When considering cryptocurrency exchange rankings, though, both of these types of businesses (exchanges and brokerages) are usually just thrown under the umbrella term - exchange. This is done for the sake of simplicity.

Are all the top cryptocurrency exchanges based in the United States?

No, definitely not! While some of the top cryptocurrency exchanges are, indeed, based in the United States (i.e. KuCoin or Kraken), there are other very well-known industry leaders that are located all over the world. For example, Binance is based in Tokyo, Japan, while Bittrex is located in Liechtenstein. While there are many reasons for why an exchange would prefer to be based in one location over another, most of them boil down to business intricacies, and usually have no effect on the user of the platform.