Steemit Crypto Academy – Season 2 - Week 7 - Post for @yohan2on

Swing Trading

Swing trading is basically a style of trading in the cryptocurrency market where a cryptocurrency trader holds a trading position for several days or weeks in order to capitalize and profit from market changes or swings. The swing in the name basically represents the different movements of the cryptocurrency market. Like a real world swing that moves from one direction to another, the cryptocurrency market also move from one direction to another which becomes very beneficial to a swing trader to profit from the market movements and price changes. When it comes to swing trading, technical analysis plays a very important role because it is what will help the cryptocurrency trader know when to buy a cryptocurrency asset and when to sell a cryptocurrency asset.

Swing Trading Using UNI/USDT pair

For this demonstration, I will be using the UNI/USDT pair. Swing trading is basically trading strategy or style that involves a trader holding a position for days or weeks in order to take advantage of the market changes or swings. In other words, in swing trading, the trader uses technical analysis to identify possible buy and sell positions. Using the UNI/USDT pair is great for this demonstration because of a few factors like market capitalization, trading volume, and number of exchanges listed. These are key fundamentals that I have taken into consideration before making my decision to use the UNI/USDT pair.

What's your Entry and exit strategy?

For me, it is very important to have a clear trading strategy and rule before venturing into swing trading, it is very important as it would allow making the right trading decisions which can help make more profits. The cryptocurrency market is very volatile which means that there is always market movements. This is great for swing traders because they can take advantage of these market swings to make profits. Technical analysis indicators is very important when it comes to swing trading.

For my entry and exit strategy, I will be using technical analysis indicators to determine my entry and entry positions. The technical analysis tool I will be making use of is tradingview and I will be using a couple of useful indicators that can enable me identify the possible swing trade opportunities which means identify buy and sell positions. I like to use the combination of Relative Strength Index RSI and the 5EMA and 10EMA - to determine my entry and exit positions.

The RSI would help me determine the overbought and oversold positions so as to make the best trading decisions. When using the RSI, I look out for oversold and overbought signals on the RSI chart. When the value of the RSI is below the 30 line, I consider it as oversold which indicates a buy or entry signal. When the RSI crosses the 30 line and above the 70 line, it indicates a sell or exit signal. However, I like to wait for the RSI to cross the 30 line as an entry indication. I like to combine the RSI with EMA so as to confirm the signals of the RSI indicator. I use the 5EMA and the 10EMA, so when the 5EMA line crosses the 10EMA line, it confirms the overbought signal and when the 10EMA line crosses the 5EMA line, it confirms the oversold signal.

Multiple Time Frame Analysis

When it comes to technical analysis, multiple time frame analysis is very important. Multiple Time Frame Analysis basically means when a cryptocurrency trader utilizes technical analysis to monitor a particular cryptocurrency pair on different time frames so as to determine the direction the market is going in order to make the best trading decision.

This is great because a cryptocurrency trader can determine the price of the cryptocurrency pair on different points in time which will allow the trader have a general idea of the market direction or trend. For instance, if the price of a particular cryptocurrency has been going down from the last 30days, it means that particular cryptocurrency is on a downtrend. For this demonstration, I will be using the 30mins, 1hr, 4hr and 1day timeframes.

1 Week chart on UNI/USDT Pair

Looking at the weekly chart of the UNI/USDT pair and using the 10EMA, 20EMA and RSI, we can see the direction the market is going. The current weekly chart shows that the price is below the moving averages which suggests that the market is moving in an downtrend direction. The 10 EMA is above the 20EMA which shows that the market movement is in an uptrend direction. RSI indicator shows the overbought regions and the regions where the market is in the middle.

UNI/USDT chart

Daily chart on UNI/USDT Pair

We can see the daily chart of the UNI/USDT pair and using the 10EMA, 20EMA and RSI, we can as well see the market trend direction. The current daily candles shows that the market is below the EMA lines which still shows that the market is still moving in a downtrend and trying to move above the moving averages. The RSI confirms the market trend as the recent RSI has gone below the 30 line. For me, this is a great time to buy and hold and wait for the candle sticks to cross above the EMA lines or the RSI to move closer to the 70 line or above the 70 line.

4-Hour chart on UNI/USDT Pair

The 4-Hour chart of the UNI/USDT pair and using the 10EMA, 20EMA and RSI shows the market trend directions. The 4-hour chart and candles also shows the different support and resistance levels, indicating the various entry and exit points. Looking at the chart, we can see that the candles are above the EMA lines and the RSI is getting closer to the 70 line, which suggests a good entry point.

1-Hour chart on UNI/USDT Pair

The 1-Hour chart of the UNI/USDT pair is pretty similar to the 4-Hour candles. The price candles are staying above the EMA lines. The 10EMA line is above the 20EMA line which indicates that the market is moving in an uptrend direction which is also confirmed by the RSI. We can also see the different support and resistance levels.

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

For this, I will be using the weekly timeframe candles. Looking at the weekly candles of UNI we can see the different price points and trend movements. Using the volume indicator, we can see that the volume of UNI has been on the downtrend. Going back to 3 months ago, we can see that UNI has crossed it previous all-time highs. Its first serious all-time high was around $5.534 before reaching a current new all-time high of $42.603. Recently, UNI has been in a bearish trend, but is trying to break above the previous support level. If this happens, then we can see UNI reaching or breaking above its previous resistance level.

The daily candles shows that the price of UNI on the USDT pair has been in an uptrend direction before taking a correction and moving in a downtrend recently. From the volume indicator, we can see that the trading volume of UNI has dropped significantly as well. The RSI chart is showing the different overbought and oversold positions. Currently UNI is being slowly bought as it is trying to recover. UNI wedged a support at $16.625. Currently the price is sitting around $25 as it is trying to bounce and recover back to its previous highs. The RSI is showing that the price has left the downtrend and is trying to move to an uptrend direction.

The 1-hour candle shows the hourly trend of UNI. UNI has been moving in an uptrend direction. It did a correction and is recovering and trying to break out from its previous highs. The RSI signal is showing an uptrend movement which for me is a buy signal. This is a good time to enter the market as there is a strong chance that UNI would reach or overtake its previous highs.

Trade management

When it comes to trading any cryptocurrency asset, it is very important make use of risk management strategies in order to minimize risk in a highly volatile cryptocurrency market. For me, I will enter UNI at $24.25, set a stop loss at slightly below the previous support level at $23.10, I will set the trailing stop at 23.18 and will set a sell order when the price reaches $28.50 to take profit.

Conclusion

When trading any cryptocurrency asset, it is important to make use and stick to a trading strategy, as it helps to be more focused. Also, it is important to do proper technical analysis so as to make the best trading decisions.

@yohan2on