Swing Trading Crypto: 10 Must-Follow Rules

Swing trading crypto is one of the best ways to capitalize on moves in the crypto markets. Price movements and trends in the cryptocurrency markets will often take multiple days to develop. Swing trading uptrending coins is one of the best ways to make big returns in a short period of time.

However, if you don’t know these 10 rules you will rarely be able to capitalize in the crypto markets. Most crypto traders fail because they don’t have a defined process or rules that allow them to consistently profit from trading cryptos. Here are 10 must-follow rules for swing trading crypto successfully:

1.Limit Your Overnight Risk When Swing Trading

Crypto markets are 24/7. This means that the market moves while you sleep, and when cannot take action. Instead of not sleeping and destroying your health, you should trade smaller size when your swing trading cryptos to limit your overnight risk. You shouldn’t be risking more than 1%  of your portfolio per trade overnight. Leaving a stop loss on overnight will help you sleep at night knowing that you are protected if it does go against you. 

2.Have A Stop Loss Strategy

Any trade you put on has the chance to be a loser. You always need to be prepared for the scenario of crypto going against you. An essential part of being a profitable swing trader is keeping losing trades small. A stop-loss strategy ensures you keep the profits you make on your winning trades. Here is an example of a recent trade on ETH where we put our stop under nearby support:

swing trade cryptocurrency

3. Trade Money You Can Afford To Lose

Trading your whole life savings in your Binance account will make you extremely emotional. It is money that you cannot afford to lose. When you bring emotions into trading cryptos, it becomes harder to make the best decisions that make you money. We recommend not risking more than 1% of your portfolio on any given trade to make sure you stay clear-headed and unemotional when you trade.

4. Don’t Overuse Indicators

All of the best traders I know use only a few indicators to make trades. Remember that price action is always king. Indicators can add some validity to a trade thesis, but they cannot be the primary reason you put on or take off a trade. For example, you cannot just short Bitcoin because its RSI is 90. You need a strategy and set up to have a high probability of making money.

5. Pay Attention To Bitcoin’s Trend

Bitcoin tends to act as the market leader for cryptos. Often cryptos will follow the trend of Bitcoin. This is not an exact correlation, but it is something to be mindful of when considering to put on or take off a trade. Trading against Bitcoin’s short term trend can lower the probability of a trade playing out.

6.Have A Written Trading Plan

All the most successful crypto traders I know pre-plan all their trades. They know what prices they are looking to enter at, what prices they will take profits at, and what price they will stop out for a loss to protect their capital. Writing these price levels out before a trade will help you stick to your trading plan, and increases the probability you manage the trade correctly. 

7. Take Partial Profits Into Strength

Cryptos are volatile. Usually when the trend, they don’t move straight up, or straight down. There is nothing worse being up nicely on a position, and then having it reverse on you and turn into a loser. To prevent this from happening, sell some of your coins (½, 1/3, or ¼) when you are up on your positions. This will allow you to realize some profit, but still in a position to capture a bigger move if it continues to trend. Learn more about my favorite trading strategies I use for cryptos here

8. Wait For Pullbacks For Entries

Cryptos will often pullback and retest former resistance levels after breaking out. When swing trading crypto, it is best to wait for a pullback after a breakout or anticipate the breakout instead of buying at the breakout level. Usually, the algos in the crypto markets will try to shake you out once a breakout starts, so it is best to wait for a pullback so you can get lower prices and get a lower risk trade.

9. Never Average Down On A Loser

The volatility in the crypto markets allows you the potential to make huge returns in very short periods of time. However, if you are in losing trades and average down you put your trading account in huge jeopardy. If you are in a losing trade, don’t average down unless you are scaling in, and it is part of your trading plan. Blindly averaging down on losers never works in the long run.  Instead of making your losers smaller, it makes them larger. 

10.Move Profits Out of The Exchange To Your Wallet

In general, you don’t want to have large amounts of money stored on exchanges. I am a big advocate of moving profits into a hardware wallet. Even the biggest exchanges can get hacked occasionally. You do need crypto on the exchange to trade actively. But always be sure to have some, if not most of your crypto that you don’t need to trade the size have to be stored in some type of cryptocurrency wallet.


The crypto markets are finally seeing momentum and trend after months of a choppy, range-bound market. There are amazing opportunities in the market every week. If you are interested in joining the biggest community of crypto traders, check out our trading community Cryptostreet.

Click here to join Cryptostreet.

Bulls on Crypto Street is a trading education website dedicated to cryptocurrencies. We teach strategies for swing and day trading cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and other Altcoins. We're at the forefront of this industry and are continuously providing up to date information on each coin, regulations, news, token sales, and much more.

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