Swing Trading Strategies: A Guide to Crypto Futures

Swing trading offers a powerful approach for cryptocurrency traders aiming to capture profits from short to medium-term market fluctuations. Unlike day trading, which demands constant monitoring and quick execution, or long-term investing, which involves holding assets for months or years, swing trading strikes a balance—enabling traders to ride multi-day price trends without being glued to the screen 24/7.

In this guide, we’ll explore what swing trading is, how it compares to day trading, key indicators and strategies, risk management techniques, and how to get started with platforms like Flipster.

What is Swing Trading in Crypto

Swing trading is a trading style that aims to capitalize on price “swings” that occur over a few days to several weeks. It combines elements of technical analysis, market sentiment, and sometimes fundamental analysis to identify ideal entry and exit points.

Swing traders analyze chart patterns, moving averages, and momentum indicators to determine when a cryptocurrency is likely to rise or fall. By holding positions longer than day traders but shorter than long-term investors, swing traders look to exploit broader price movements and trend shifts.

Advantages of Swing Trading

• Higher Profit Potential: Swing traders can capitalize on larger price movements than day traders, potentially generating higher returns per trade.

• Lower Time Commitment: Unlike day trading, swing trading doesn’t require constant monitoring, making it suitable for people with full-time jobs or busy schedules.

• Market Flexibility: Traders can profit from both uptrends and downtrends using long or short positions.

Swing Trading vs. Day Trading

Is Day Trading Better Than Swing Trading?

That depends on your personality, time availability, and risk appetite. If you prefer a slower-paced, research-driven approach, swing trading may be a suitable option for you. If you enjoy fast decision-making and can dedicate full attention to the markets, day trading might be a better fit.

Understanding Market Trends

Mastering swing trading begins with identifying market direction:

• Uptrend: Higher highs and higher lows

• Downtrend: Lower highs and lower lows

• Sideways trend: Range-bound movement

Trading with the trend increases the odds of success. Confirm trend direction using tools like moving averages, trend lines, and volume patterns.

Essential Technical Indicators for Swing Trading

Moving Averages

Help identify trend direction and dynamic support/resistance. Traders often watch golden crosses (bullish) and death crosses (bearish).

RSI (Relative Strength Index)

An oscillator that reveals overbought (>70) or oversold (<30) conditions. Useful for identifying reversals or entry/exit points.

MACD (Moving Average Convergence Divergence)

Highlights trend momentum and potential crossovers that signal buying or selling opportunities.

Bollinger Bands

Volatility indicator that expands and contracts with price action. A squeeze suggests a potential breakout.

Additional Tools

• ADX: Measures trend strength

• Fibonacci Retracement: Highlights support/resistance levels

• Ichimoku Cloud: Multi-dimensional trend analysis

• Chart Patterns: Flags, triangles, and head-and-shoulders

• Price Action: Candlestick patterns (e.g., hammer, engulfing) offer visual cues for reversals

How to Build a Swing Trading Strategy

1. Planning and Preparation

• Define your goals, risk tolerance, preferred coins, and tools. A structured plan reduces emotional decisions.

2. Identifying Opportunities

• Use a combination of:

  • Technical Analysis: Study price charts and indicators

  • Fundamental Analysis: Monitor news, updates, and economic data

  • Sentiment Analysis: Gauge crowd psychology via social channels or volume spikes

3. Entry and Exit Points

Look for:

• Breakouts above resistance

• Bounces from support

• Confirmation from volume or multiple indicators

Popular Swing Trading Strategies

1. Trend Following

Trend following involves identifying the direction of the prevailing trend and trading in that direction. Traders enter long positions in uptrends and short positions in downtrends, aiming to ride the momentum of the trend. 

Technical indicators, such as moving averages and trend lines, can be used to identify and confirm the trend direction.

2. Breakout Trading

Breakout trading involves identifying key support and resistance levels and entering trades when the price breaks out of these levels. A breakout above a resistance level suggests a potential uptrend, while a breakout below a support level indicates a potential downtrend. 

Traders often use Bollinger Bands and volume indicators to confirm breakouts and identify potential entry points.

3. Moving Average Crossover

As the name implies, this strategy uses two or more moving averages with different timeframes to identify potential trend changes and entry points. 

A golden cross, where a shorter-term moving average crosses above a longer-term moving average, can signal a potential uptrend. Conversely, a death cross, where a shorter-term moving average crosses below a longer-term moving average, can indicate a potential downtrend.

4. Candlestick Pattern Trading

Candlestick patterns are visual representations of price action that can provide insights into potential trend reversals or continuations. Some common candlestick patterns used in swing trading include:

• Doji: A candlestick with a small body and long shadows, indicating indecision in the market.

• Hammer: A candlestick with a small body and a long lower shadow, suggesting a potential bullish reversal.

• Engulfing Pattern: A two-candlestick pattern where the second candle completely engulfs the first candle, indicating a potential trend reversal.

Case Study: Bitcoin Swing Trading 2018–2023

Bitcoin’s historical price action demonstrates multiple swing trading setups:

• 2018 Bear Market: Head and shoulders + death cross = downtrend

• 2020–2021 Bull Market: Breakout above resistance + golden cross = uptrend

• 2022 Downturn: Overbought RSI + MACD crossover = bearish signals

• 2023 Recovery: Bollinger Band squeeze + bullish candlestick = new trend forming

How to Trade Cryptocurrencies on Flipster

1. Sign up for an account on the Flipster website or by downloading the Flipster app (Android or Apple).

2. Click the [Trade] tab.

3. Search for your preferred cryptocurrency and click on it.

4. Select the leverage (up to 100x).

5. Select either a Trigger Order or Market Order.

6. Enter the amount of coin you want to trade or choose a percentage of your available funds.

7. Once you have confirmed the details, click the [Long] or [Short] button to open a position.

Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. Trading digital assets and digital asset derivatives comes with a significant risk of loss due to its high price volatility, and is not suitable for all investors. Please refer to our Terms.