The Swing-Trader (medium)

swing-trader emote

The Swing-Trader is the second archetype and more difficult than The Investor and profits come in quicker, therefore medium difficulty to pull this off.

Officially Swing-Trading describes opening and closing positions in between a few days. But as with The Investor, the Swing-Trader can be played at multiple layers.

The general goal is to be more “into” the market, like checking it daily, but trading changes in price-action. This could be the middle-ground for most people who take effort to read blogposts like this.

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The Swing-Trader is making more use of the volatility, cryptocurrencies provide. He is using pullbacks on trends to make money.

This, however, needs a great amount of understanding marketcycles, and basics of trading financial markets in general.

The tradeoff is, that you are basically making money multiple times a week. As you correctly assumed, this takes more time. Although the general rule in trading any market is:

You don’t need to trade every move.

Fundamentals of certain coins aren’t as important to the Swing-Trader as they are to The Investor. He aims to make money with them by riding trends, he doesn’t care about longterm usability for the coin or similar things.

The gameplan

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It doesn’t matter which coin he plans to trade, although altcoins are generally more volatile than BTC and have more potential upside (due to lower prices).

The plan is to notice a trend emerging, joining in at the start and selling of with nice, but not too crazy profits.

The Swing-Trader doesn’t seek out 100x coins. Anything from 10% – 100% is totally fine. He makes money by winning more trades.

This picture describes the basic principle of a Swing-Trade in a bull market or uptrend. You can short downtrends as well.

swing trading simplified
Swing-Trading simplified

The Swing-Trader sees a trend emerging but then has to wait for the pullback to confirm. That’s when he jumps in with his money. The trend then resumes, the price climbs. Now he has two choices:

  • Get out after a predefined % of profit
  • Get out when price turns around

Both ways are totally fine. That depends on the personal style.

The following picture shows this in more detail on an actual candle-stick chart. If you don’t know how these work, you should definitely learn that first, before becoming a Swing-Trader.

how to swing-trade candlestick chart

Also to be seen in this picture, on the left side, the downtrend can be traded as well. Same principle, just the other way round. On exchanges that allow you to short coins.

The layers

Just like The Investor, the Swing-Trader has multiple layers in which he can be played.

It is mostly down to the size of the swings. He can trade bigger timeframes like daily or even weekly candles. I don’t bring up the hourly candles, because I would say that makes him a daytrader.

Technically buying in a bear market and selling in a bull run is a – very – big swing as well. But that makes you an Investor. As you can tell, the Swing-Trader is right in between.

Pro’s and Con’s

Pro:

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  • More profits
  • Quicker than The Investor
  • Can be done almost only through technical analysis
  • No deep research on coins needed

Contra:

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  • Depending on your country, taxes might be hell, since you trade a lot
  • You need a basic understanding of technical analysis, charts, and trends
  • You are more exposed to spikes through bad or good news which change the price very quick. Can easily ruin your setup in minutes.

So the Swing-Trader is kind of in between the Investor and the Daytrader. If you still want to go one step further, check out the Daytrader.

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