Many people participate in the crypto market – some as investors, others as traders. Take the long term—years or even decades—when executing your investments. Meanwhile, trades regularly turn pocket profits. A common way to distinguish one type of trader from another is to look at the period of time a trader has held Bitcoin or a coin—which can range from seconds to months or even years.
The most popular trading strategies include day trading, swing trading, scalping, and position trading. Choosing a style that suits your trading temperament is critical to long-term success. This article lists the differences between scalping strategies and swing trading strategies.
Key takeaways
Scalping and swing trading are two of the more popular short-term investing strategies employed by traders.
Scalping involves making hundreds of trades per day and holding positions for very short periods of time, sometimes just seconds; this way the profits are small but the risk is reduced.
Scalping usually requires a high degree of analytical skills, although traders do not need to be patient.
This strategy belongs to swing trading. The profit-loss ratio is very high. Stop loss is 300 points and take profit is 600~900 points. Swing trading uses technical analysis and charts to track and profit from BTC trends; the time frame is medium-term, usually days to weeks.
Swing traders may not need as much experience as scalpers because swing trading generally requires less time required to monitor financial charts.
Scalping
Scalping strategies target small changes in intraday BTC movements, with frequent entries and exits throughout the trading session to build profits.
Often classified as a subtype of day trading technique, scalping involves multiple trades over very short holding periods ranging from seconds to minutes. Because the position is held for such a short period of time, the payoff on any given trade (or profit per trade) is small. As a result, scalpers place large numbers of trades—up to hundreds in an average trading day—in order to make profits. Limited time exposure to the market reduces the risk of scalping.
Scalpers move quickly and rarely support any particular pattern. Scalpers go short on one trade and then go long on the next; small opportunities are their goal. Scalpers typically trade around the bid-ask spread—the price at which they buy and the price at which they sell—taking advantage of the spread to make a profit. Such successfully exploited opportunities are more common than large moves, as even fairly stationary markets can experience small moves.
Scalping traders typically follow short-term charts, such as the one-minute or five-minute charts. Scalping traders can also use trading-based tick charts. These charts are used to study price movements and receive signals for certain trades.
Scalping traders seek sufficient liquidity to accommodate trading frequency. These traders require access to accurate data (quote systems, real-time information) and the ability to execute trades quickly.
Scalping is best for those who can invest time in the market, stay focused, and move quickly. It is often said that impatient people make good scalpers because they tend to exit trades as soon as they are profitable. Scalping is suitable for those who can handle stress, make decisions quickly and act accordingly.
swing trading
The strategy of swing trading involves identifying trends and then operating within them. For example, swing traders will often pick a coin that is moving strongly after a correction or consolidation, and then exit after taking profits before getting ready to move higher again. Only by repeating this buying and selling method can you reap profits.
With BTC breaking below support, traders turned to the other side and went short. Typically, swing traders are "trend followers" who will go long if an uptrend occurs and may go short if the overall trend is down. Swing trading remains open from days to weeks (near term) - sometimes even months (medium term), but usually only for a few days.
Swing trading falls somewhere between day trading and trend trading in terms of time frame, patience required, and potential rewards. Swing traders use technical analysis and charts that show price action to help them find the best entry and exit points for profitable trades. These traders study resistance and support and occasionally use Fibonacci extensions in conjunction with other patterns and technical indicators. Some volatility is good for swing trading because it creates opportunities.
This strategy works well for those who can't afford to focus on the market full time and keep an eye on things all the time. This strategy is often chosen by part-time traders who take the time during work hours to see what is going on. Pre- and post-listing vetting is critical to the success of swing trading, as is patience with overnight holdings. Therefore, it is not suitable for those who feel anxious in this situation.
The table below provides a brief overview of the main differences between the two trading methods.
Scalping trading, swing trading, holding period of seconds to minutes, never overnight, days to weeks, sometimes even months; the most common number of trades held is several days, there may be hundreds of people in a day, some charts, time-sharing charts or 1- 5 Minute Charts Daily or Weekly Charts Trader Traits Vigilance, Impatience Works Here Understanding Trends Requires Greater Patience and Precision Decision Making Time Quick Fluid Strategy Extreme Moderation Moderation High Stress Levels Profit Targets Small, Small, and Small Large tracking Continuous monitoring throughout the trading session Reasonable monitoring; requires up-to-date information on news and company events Adaptability Not suitable for novice traders Suitable for everyone, from beginners to intermediate to advanced players.
Each trading style has its own set of risks and rewards. There is no single "perfect strategy" that will suit all traders, so it is best to choose a trading strategy based on your skills, temperament, the time you are able to devote, your account size, trading experience and personal risk tolerance.
