SWING TRADING & Strategies
The perfect type of trading for a market as volatile as crypto has to be Swing Trading. People who cannot devote their 24x7 to this 24x7 market, but still want to be an active participant should absolutely focus on this strategy. It helps you keep your exposure to the assets at all times, yet safeguard you from intraday moves.
This strategy will basically make you set periodic ranges of BUY points and SELL points through LIMIT ORDERS (available on CoinDCX) where you place bids (buy levels) and where you sell (Take Profit) based on your levels (they could be support and resistances on different Time-Frames)
First example, just to demonstrate the strategy.
The above lines represent a range bound zone where price keeps visiting and bounces from the zone (between $37600-$37200) and then later goes up and faces rejection (around $39,000 mark). This is a classic example of Support:Resistance and they work until the price escapes that given range depending on the market conditions.
Though the above chart represents a very defined price range movement, these ranges can sometimes trick a trader due to the huge volatility that a crypto market faces. To safeguard your portfolio from those swings, always set BUY levels at the Accumulation zone while going down and then set SELL levels at the distribution zone. This helps in averaging your buys while the asset falls and when it begins rising, the set limit orders start to book profit according to your set zones.
SWING TRADING LOW-CAPS:
Though Swing Trading safeguards a trader from wild price swings, but depending on the risk appetite of a trader, investing in low-caps will bring volatility into the scene.
So imagine an asset like DUSK/USDT (chart: CoinDCX)
This price volatility can easily remove a trader from a trade if proper BUY and SELL levels are not set. Swing trading strategy allows you to average out your buys either when the asset falls or goes up, and then sell the asset in chunks when it starts to rise again.
This form of trading exponentially increases the overall percentage gain while booking-profit, compared to going all-in and being stuck with the assets price action. Primarily the reason why Swing Trading can be such an awesome strategy for newcomers and more conservative investors!.