Crypto Academy Week 15 - Homework Post for [@yohan2on] - The Swing trading style

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Am gladdened once again for yet another opportunity of this wonderful edition by the cryptoacademy. From the lecture offered by Professor @yohan2on, reading through this lecture series have given me a better insight on Swing trading style. To this, I will be writing based on the task given by the Professor.

Swing Trading
Swing trading is one of the many popular trading style that focuses on short term trading based on the volatility of assets in the market trend. Just as the name implies, it involves buying and selling of crypto assets in a short time frame when there is a swing (i.e upward or downward movement) in the price of assets so as for the trader to make profit. In this type of trading, in contrast to day trading, a trader can hold a particular for maximum of 1 month before exit.

A Crypto asset pair
A crypto asset pair are crypto assets paired together which can be traded for each other. For instance BTC/USDT, BTC/BUSD etc. Here, the BTC asset can sold out for USDT in return.
There volatility of prices of crypto asset varies from the other. Sometimes, a particular assets might have a high volume in BTC and the other, the reverse is the case. So it is important to study the market trend of a particular crypto asset before pairing it so as not to run a loss when swing trading.

What's your Entry and exit strategy?
When we are talking about entry and exit strategy, we first off know what entry or exit is all about. Entry is a point where the trader sees a good buying time and exit simply means when a trader sees a good selling time to make profit. The entry and exit strategies are strategies which help the trader to know when exactly will be perfect to buy (entry) a particular asset and when to sell (exit) a particular asset without running at loss or liquidity based on technical analysis and different indicators of the market trend.

To me, before I enter a trade, using technical analysis like indicators, most specifically the MACD and the RSI to determine the trends of the asset in the market is what I do. This helps me to know when it is good enough to enter a trade and also to exit a trade so as not to procure deficit or loss.

Multiple time frame analysis
Multiple time frame analysis is a type of technical analysis which involves the use of assets chart at different time interval or frame (may be an hour, 4 hours, a day, a week or a month) to determine when a good swing trading could be carried out on a particular asset. This analysis helps the trader to monitor and know the market trend of an asset at different time interval or frame before investing or trading on a particular asset since there is always a swing price of asset in the crypto market.

Monthly Chart - BTC/BUSD
When we look at the monthly chart of the BTC/BUSD pair, we see how the market trend is in a continuous uptrend direction, the price has moved from $5664.93 to $60000.00. Not just the increase in price but also they have an increase in volume. The price uptrend was above $60000.00 but immediately dropped down below to the $33964.12 price level.

Weekly Chart - BTC/BUSD
From the weekly chart, we can see the market moving in an uptrend direction and later on to a downtrend direction. The price has moved from $5664.93 to $60000.00. Not just the increase in price but also they have an increase in volume. The price uptrend was above $60000.00 but immediately dropped down below to the $33964.12 price level. The downtrend movement shows that there is decrease in the influx of traders buying the asset in the market.

Daily Chart - BTC/BUSD
Looking at the daily chart, we see that the market trend of the asset is moving in a downtrend. The price of the asset has moved from $55668.98 in a downtrend to 33976.37.

4 Hour Chart - BTC/BUSD
Looking at the 4 hour chart, we see the market trend moving in a fluctuating manner from uptrend to downtrend direction. The price moved from $40607.36 to $34034.67.

Candlestick analysis and use of other relevant supporting indicators for your trade decision.

Using the weekly timeframe candles, the market is moving in a down direction. And for the daily candles, we can see also a downtrend movement, on the 4 hour time frame candle, the market is moving also in downtrend. This shows that there is retrace in the movement of prices. It also shows that there are more traders selling the asset thereby causing a downtrend movement in market.

Trade management (Setting stop loss, trailing stop and take profit)
Trade management is one of the ways which aids a profitable swing trading. Without proper management of trade, the trader might run at loss or liquidity and vice versa if managed properly. In trade management of a particular trading, I will love to use the BTC/BUSD pair, I will set my stop loss to be $2.56 and will buy the BTC at $2.68, and then I will place a limit order (price above the market trend) of BTC on 3.21 so as to take profit.

Conclusion
Swing trading is one of the popular style of trading mostly used by novice in short term trading. It is a type of trading style which needs a traders’ accurate monitoring of the market trend of asset via the help of indicating tools. It can only be rewarding and profitable if much intrinsic study of the indicating tools is carried out.

here is my homework task Professor @yohan2on. Thanks for reading through my post.