Crypto Swing Strategies
What Is Swing Trading Crypto? Swing trading is a strategy whereby traders aim to profit from price movements across a short to medium time frame. The idea is to catch any ‘swings’ in the market which can occur over days, weeks, or months. Besides, as the second-largest crypto by market cap, Ethereum gets all the press coverage you need. The only downside with Ethereum is that it’s expensive to trade, but despite that, it can offer very good opportunities for your swing strategy. Because swing traders are carefully speculating and waiting for notable crypto price swings to earn a profit, they can be considered more passive than day traders who frequently monitor the market. They take advantage of a cryptocurrency’s volatility, so they often hold their assets for a few days, weeks, or months.
How much can you make swing trading crypto?
How Much Money Can I Make Swing Trading Stocks with $20,000
If you risk 1% of $20,000, you can risk up to $200 per trade. Assume you want to buy a $50 stock, place a stop loss at $49 and a target at $53. Your trade risk is $1 for each share you own (entry price minus stop loss or $50-$49). Therefore, you can buy 200 shares at $50. If the price drops to $49 you lose $200. If the price rallies to $53 you make $600.
Buying 200 shares only uses $10,000 of your capital (200 x $50), so you still have $10,000 to use on other trades. If you utilize leverage, which is often provided at 2:1, that means you actually have 2 x $20,000 = $40,000 to work with. This leaves you $30,000 in “buying power” to make other trades.
Assume you find 5 trades a month that provide this type of trade setup.
Assume you win 60% of your trades.
Your reward: risk ratio on this trade is 3:1. If the trade is a winner, you make $3 for every $1 you risk.
These scenarios have been selected because they are reasonable. With a decent strategy that produces 3:1 reward: risk ratios, and wins about 60% of the time, you should have no problem finding of 5 trades per month.