How do I swing trade and make profit - Guide to Crypto Statto 11 APR 2025
What is swing trading?
Swing trading is where you buy an asset at a market price and once you have that asset, you sell it for more money. Once you have sold that asset, you put in a limit order to buy it again at a lower price. You keep repeating this process with the aim of acquiring more of the asset and/or more money.
The easiest way to think of swing trading is flipping houses. A homebuyer purchases a property that they think is below market value and they then sell it for more money. In most circumstances the home buyer will make some improvements to the property such as repairs but still make a profit. The biggest risk to the purchaser is that the market value could full below what they originally paid for the price.
It is exactly the same with cryptocurrency. Instead of paying money for repairs there is a small fee for each trade that occurs. The big risk with cryptocurrency is the volatility. Prices can drop substantially.
Swing trading is often referred to as "trading within a channel", you see a recurring trend and you try to enter and exit the asset position over time.
We prefer to not see it as in terms of a chart showing swing moves but in terms of setting targets to enter and exit trade positions.
Swing trading vs day trading - what is more profitable?
Day trading is the classical alternative to what most retail investors do. Most retail investors for example - those with Individual Savings Accounts, will try to find a stock that they think for some reason will increase in value over a period of time.
Day trading is a full time job in that a trader will start to look for assets to buy they think will go up in value within that day, or in some circumstances will fall - undertaking what is known as a short position. A key characteristic of day trading is to mostly exit positions at the end of the trader's day.
Swing trading is especially useful with cryptocurrency because the markets are 24/7. Swing trading tends to be more focused upon short to mid-term cycles of movements up and down which can typically range from a matter of minutes to several weeks.
We cannot say what is more profitable but our personal preference is swing trading. There is a very simple reason for this, we are too busy building Crypto Statto to sit and watch charts all day every day. Indeed we are as much interested in the technology behind cryptocurrency - blockchains, as we are with the potential profits to be made within cryptocurrency.
Crypto Statto - our platform, aligns with our swing trading philosophy and lifestyle choice!
About this article
We introduce the concept of swing trading using a single recent chart of Bitcoin versus The United states dollar (BTC/USD). We will re-use this chart throughout the article.
About Crypto Statto - our market analytics platform
Providing a range of reports in charts and other forms, our goal is to present divergences on a range of cryptocurrencies that can help traders to spot opportunities in the market. Crypto Statto is backed by an API where traders can use data within their own trading software. We're adding more tools and capabilities to the platform so please keep coming back as we try to make the platform amazing.
Disclaimer
- None of this is financial advice
- Cryptocurrency is a highly volatile and risky asset
- You can lose all your money trading any asset - especially crypto
- Just because we have been successful with our trading strategy does not mean that the same will happen for you
- This platform offers no promise of future gain or profitability
- Use this platform along with other tools, never rely just on one platform for your trading insights
Our golden rules for swing trading
- Once you have put in a certain amount of cash, make your target to get that cash back. This means you have no more risk than your time
- Once you have a certain amount of crypto, start to move into other assets and repeat the process
- Check your portfolio and market events - there may be an opportunity to do an immediate buy or sell and swing trade on the bounce to accumulate more assets
- Pick your own strategy
- Try to create strategies for different market conditions
We cannot overstate the importance of getting your cash back with cryptocurrency. With the amount of volatility in the market still, swing trading can allow you to accumulate large amounts of coins without the need to keep putting more cash in.
Our long-term strategy
We have one single long term strategy through our swing trading - We expect the prices of crypto assets to increase over the long term. We don't expect to make profits in Fiat but we do expect to gain more coins. At a point in the future we will then exit some of our cryptocurrency to take more profits in cash.
Our new shorter-term strategy
We're currently working on new automated trading software to run against market data and portfolio positions. The goal is to use rules to change trade positions with a view to taking profit.
The aims here are to;
- Generate cash flow
- Trade more frequently to accumulate more crypto assets
- Feeding signals on potential bigger market moves to avoid risk from big market drops and big market rises (downside risk and upside risk)
As you can tell, this is not a simple matter. The software aims to mimic and improve a manual trading strategy. We don't have any plans to release this software on this platform at this present time. The simple reason is it will take a lot of time to test this software and validate it. If you're interested in learning more about this, we are putting out articles and you can always reach us through our contact form or dropping us an e-mail.
Simple guide to swing trading
Bitcoin chart from the 10th of February 2025 2 the 10th of April 2025
The first thing that immediately jumps out to anybody is the rises and falls in the price of cryptocurrency over this two-month period. We can make some obvious observations;
- The price of Bitcoin was higher in February then it is in most of March and all of April
- There have been some big movements within a day
- There was one day where the price rose a lot and then fell back to the same level the next day
- There have been many days where the opening price and closing price has been very small but the movement between the day has been quite large, the 7th to the 11th of February 2025 being a good example
Bitcoin chart from the 10th of February 2025 2 the 10th of April 2025 with Buy and Sell
We have taken the same chart and put a "B" at the bottom of a candle and "S" at the top of a candle. This would be the most perfect dream - to buy at the bottom and sell at the top, repeatedly! Sadly, nobody will be able to achieve this. It is doubtful that AI will be able to do something as phenomenal as this too.
Instead we must take a fairly rigid and simple approach.
Percentage gain and loss swing trading
A simple strategy would be to simply do the following;
- Put some Fiat into a trading account
- Look at a chart identify the previous days opening and closing price
- Look at today's current price
- Determine an entry point
- Once you have acquired the assets, set a sell limit order
- Repeat the process
Our Bitcoin Chart annotation example
- O -the opening price was much higher than the closing
- C - the closing price was much lower than the opening
- We decided that there may be a possibility of the price being lower than the previous day's close at some point in the future
- S - We therefore set a limit order to buy at a percentage below yesterday's closing price
- B - Once our order had filled, we set a sell at a percentage above the buy price
The beauty of this swing trading strategy - advantages
We do not need any sophisticated technical analysis. Anyone with a reasonable ability in mathematics or logic can start doing this, there are many free tools allowing us to take advantage of this strategy. Undertaking this approach will allow you to accumulate more crypto without putting more cash in.
This has been one of our main trading strategies for many years.
Enhancements to our swing trading strategy
This is quite an in-depth rundown on how we can improve returns - our reports and analysis reports on our crypto analytics platform are designed to highlight divergences to other currencies. This is the main objective of Crypto Statto to present potential signals where a trader may take action.
Limitations of using technical analysis charts with candles
24 Hr charts, or any level may not reveal the biggest divergences on when to exit and enter a position/trade
When we look at a daily chart, what we see are 4 points in that 24 hour period;
- The opening price - 12AM
- The closing price - 11:59 PM
- The biggest price in that period - the higher wick
- The lowest price in that period - the lower wick
We cannot always see wicks on charts because the opening and closing price happens to around the highest and lowest price.
The limitations of standard charting is that so much more activity is occurring on a minute by minute or 10 minute by 10 minute basis than the chart can show. Technical analysts will therefore choose a different time level such as hourly 10 minutes or minute levels. More advanced analysts may open multiple charts to try and understand differences between these levels.
If we were to pick the last 24 hours rolling backwards every minute over the last day and plotted the same charts we would see huge variances in how the shape of the prices changed.
Crypto Statto has many rolling datasets that compare between periods and summarises this across a set of coins.
An example could be that from 20 coins, one coin is consistently not showing much difference between its high and low values but other coins are showing bigger differences. In this situation we may determine that the coin with lower movements is going to see a bigger move.
A second example could be that from 20 coins all the other coins have fallen quite a bit and we happen to own a coin that is much higher on recent percentage gains, we may decide to sell some straight away.
Following what most other traders are doing does not present contrarian trading opportunities
Once more advanced in trading, many will start to do Perpetual Futures Trading. No advice - we don't do the Perpetual Futures Trading. Many can make good profits from this market, but we think is heavily constrained by lots of traders all doing the same thing within the context of fairly strict rules on pricing.
By identifying divergences in what we term a compressed timeline, we can be more contrarian our in approach.
Contrarian swing trading strategy example - Volume and Price
Our "Big Whale Report" Displays charts with hourly volume and price by percentage gain and loss. We are planning to do more reports around this area because we think there are some significant observations that can help you to swing trade more efficiently.
- Most technical analysts will use price and volume as an indicator of potential price moves
- We can determine buy and sell pressure by a high volume causing by either a big price move or fall - a bigger daily range
We can start to ask some interesting questions about the potential of volume affecting the price by just looking at our chart;
- H - Higher Volume Does tend to result in bigger price ranges
- LMH and HML of consecutive periods (days in this case) seems to indicate a reversal. And clearly see that one LMH resulted in a big full in the price whereas another LMH resulted and a big increase in the price
Again, taking daily charts or hourly charts may not be enough to show potential moves. More events are happening over a compressed timeline than a chart like this can show.
Our "Big Whale Report"
It is important to always make your own conclusions on what data and charts are telling you. This in itself may not be enough and more advanced traders may use statistics to verify their initial conclusions. We must always understand that we will need more supporting information than a single chart. We would need to see actual prices and percentage moves - more work to be done!
That being said, this is how we are interpreting this chart;
- At 6:00 PM we see similar price buying and selling pressure
- At 6:00 PM we see more buying then selling volume pressure
- We continue to see more buying pressure at 7:00 PM for both price and volume
- We see an absence of selling pressure at 8:00 PM for both price and volume
- We see extended buying pressure at smaller higher levels and see more selling pressure at 9:00 PM
- We see less volume on buying pressure at 9:00 PM and more extended sending pressure for volume at 9:00 PM
What can we determine from this chart?
This may be entirely false, but it is reasonable to attempt to establish heuristics on probable indicators for entering and exiting positions of cryptocurrency assets.
We can determine that if we checked the actual prices, we would see an increase in the price. Key - we start to see probable traders starting to exit their positions at 9:00 PM and sell. We could hypothesise that from around 9:00 PM the price will start to fall.
What can we determine from the data behind the "Big Whale Report"?
Those that are more technical may identify some key indicators to look for;
- Divergences between buying and selling pressure
- Convergences between buying and selling pressure
- Absence of buying and selling pressure
- Rising and falling buying and selling pressure
The important of looking across many coins when swing trading
The chart shown contains multiple cryptocurrencies, by looking through the charts we identified XRP as the divergent asset compared to other cryptocurrencies. If we held XRP, we may look to exit position of some XRP at around 8:00 PM - our indicator being the absence of selling pressure and the presence of buying pressure increasing.
Does our trading strategy work?
We put together an article where we took real trades of Litecoin. The article contains screen grabs of genuine trades between the 11th of November 2024 On the 2nd of February 2025. We purchased 19 Litecoin in November and ended up with 29 Litecoin in February. That is 10 LTC in 2 months. The highest price of LTC was nearly £300 - £292.64 on May 10th 2021.
The Fiat price has moved significantly - as with all cryptocurrencies, but we have satisfied our objective to accumulate more cryptocurrency.
Joining Crypto Statto
By joining our platform for free, you got access to both reports and API. We give free credits and often give away more credits. We have a pricing schedule that we will be looking to implement later on in 2025. We believe the pricing is more than reasonable, and affordable to the more advanced traders already using multiple platforms.
We have a lot of great things planned for crypto stato including improving the quality of the reports and the reliability of the beta.
So don't delay join today - http://www.cryptostatto.com/register
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