- Contract trading novices, come and take a look! The academician of the cryptocurrency world teaches you practical skills for swing trading in volatile markets!
This bull market has attracted many new retail investors to enter the cryptocurrency world. At the same time, contract trading in the cryptocurrency world has attracted a large number of investors and traders due to its high leverage and high risk. However, in the uncertain conditions of the cryptocurrency world, especially in volatile markets, many traders often feel confused and unsure how to respond. In this article, the academician of the cryptocurrency world will discuss with everyone how to achieve profits through swing trading in volatile markets.
- Understanding volatile markets
Volatile markets refer to price fluctuations within a certain range, without significant breakthroughs in support or resistance levels. This stage lacks a clear trend, posing a challenge for traders seeking short-term gains. The academician of the cryptocurrency world reminds everyone that in volatile markets, market sentiment often changes unpredictably, easily leading to rapid reversals and pullbacks. Especially during this period, Ethereum has been oscillating at a high level for over a week, and the resistance level has been unable to be effectively broken through.
First, we need to understand the characteristics of volatile markets:
- Price range: Prices fluctuate repeatedly within a certain range.
- Changes in trading volume: Trading volume usually decreases, reflecting market hesitation.
- Ineffectiveness of technical indicators: In volatile markets, conventional trend indicators (such as moving averages) may produce incorrect signals. In particular, when major indicators show divergence, oscillation is likely to occur, as shown in the figure below:
- How to formulate swing trading strategies - the academician of the cryptocurrency world has methods
In volatile markets, swing trading aims to capture profits from the short-term fluctuations in prices, such as rebounds and pullbacks. Here are some specific strategies for swing trading:
- Setting support and resistance levels
Clearly defining support and resistance levels is a fundamental step in swing trading. It is recommended to use the following methods:
Technical analysis: Combine historical price trends to identify price levels that have been repeatedly touched, which often become support or resistance levels.
Psychological levels: Whole number levels (e.g., 3500, 3400, etc.) are often considered important support or resistance levels in the market, and traders should pay special attention to them.
Utilizing technical indicators
In volatile markets, technical indicators are important tools for swing trading:
Relative Strength Index (RSI): RSI can help traders determine overbought or oversold conditions. When RSI is above 70, the market may be overbought, so consider shorting; when it is below 30, the market may be oversold, so consider going long.
Bollinger Bands: When the price touches the upper band of the Bollinger Bands, it may signal a sell; conversely, when it touches the lower band, it may signal a buy.
Stochastic Oscillator (KDJ): When the K line (fast line) crosses above the D line (slow line), it can be considered a buy signal; conversely, crossing down can be a sell signal.
Short-term trading strategies
In volatile markets, it is recommended to use short-term swing trading:
Entry strategy: Go long near the support level and go short near the resistance level. For example, when the price retraces to 3400, consider going long, and when the price approaches 3500, consider taking profit on short positions and then going short in reverse.
Setting stop-loss: Set stop-loss points to control risk, usually 3%-5% below the support level or 3%-5% above the resistance level.
Partial entry and exit: Many students ask why they should enter and exit in parts. This is because we want to use the advantage of high leverage and low position to give ourselves the opportunity to make mistakes, so it is necessary to consider a partial entry and exit strategy to reduce the risk of a single trade. For example, set a 10% position to buy near the support level, sell 50% near the resistance level, and flexibly adjust the remaining position in subsequent fluctuations.
Risk management, remember that the essence of trading is survival, so risk control always comes first
Volatile markets are often full of uncertainty, so risk management is particularly important:
Position control: It is recommended to control the position of each trade within 5%-10% of the total capital to avoid significant losses due to a single failed trade.
Record trades: Record the reasons and results of each trade for future experience summary, strategy improvement, and continuous optimization of trading strategies. The goal is to minimize losses and maximize gains.
Stay calm: Volatile markets can lead to emotional fluctuations, so traders should stay calm, avoid emotional trading, and not let market fluctuations affect their mindset. Strictly adhere to your trading strategy.
Waiting for the right opportunity
The secret of trading is to wait purposefully. Waiting for it to defeat 99% of people. Waiting for a trend means waiting for a pullback. Waiting for oscillation means waiting for highs and lows, seizing rebounds means waiting for volume, and waiting for a breakout means waiting for a pullback. Bottom-fishing means waiting for a reversal, doesn't it?
In conclusion, the academician of the cryptocurrency world emphasizes that swing trading in volatile markets requires good market sensitivity and the ability to adapt flexibly. By clearly defining support and resistance levels, using technical indicators reasonably, implementing short-term trading strategies, and perfecting risk management, traders can find profit opportunities in volatile markets. Most importantly, maintaining calm and patience, always prioritizing risk control, is the key to standing invincible in the ever-changing market.
I am the academician of the cryptocurrency world, a warrior who has always been protecting the "leeks" (novice investors). I wish my fans to achieve financial freedom in 2024. Let's work together!
Friendly reminder: The content above is created by the author's official account. The advertisements at the end of the article and in the comments section are not related to the author. Please discern carefully. Thank you for reading.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
