Crypto Swing Trading Summary (C6): Market Cycle Trading

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The crypto market fluctuates in cycles.

Understanding these cycles will allow you to adapt your swing trading methods for maximum profitability.

A bull market is when the general market is rising in price.

During a bull market, crypto assets have been known to increase in value by thousands of percent in just a few months.

The strategy is to ride the wave. Look for coins with high upward momentum and join in.

Once a coin breaks through a resistance level it will often climb higher, especially if it has been in consolidation for a long time. Put your stop loss right below the breakout level.

A lot of money can be made during a bull market, but things can reverse quickly. Strict risk management is paramount at all times.

A bear market is when the general market is falling in price.

Many traders will use short selling, but this is risky.

Short selling is when you borrow coins and sell them, hoping to buy them back later at a lower price. It's risky because if the price rises your losses can be unlimited.

The safer thing to do is to range trade. Look for assets in consolidation with clear support and resistance levels. Buy close to support and sell close to resistance. Put your stop loss just below the support.

Another strategy you can employ in a bear market is dollar-cost averaging. While the price is dropping you take advantage of the lower cost by consistently buying it. Only do this with coins you are confident will be bullish in the long run.

Consolidation is when the price of an asset drifts sideways within a specific range.

The strategy here is to use range trading as previously explained.

Be sure to keep an eye on volume levels. A breakout from a range, either bullish or bearish, with a lot of volume, often means a new trend is starting.

Make use of multiple time frames as they may show different trends which you can capitalize on.

For example, even when the daily and weekly may show an overall bear market, the 4-hour chart can help you identify short-term bullish periods.

Use fundamental analysis to gauge overall market sentiment. Extreme pessimism may indicate potential bottoms while widespread excitement can be a sign of the market or an asset topping out.

If the situation is unclear, it is often best to just stay out of the market until things settle down.

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