Swing trading is one of the most popular trading strategies in digital asset markets. This guide explores how you can use a bitcoin trading bot to deploy a swing trading strategy.
What Is Swing Trading?
Swing trading refers to a trading strategy that involves entering and exiting positions within several days or weeks. Unlike day trading, which involves buying and selling an asset on an intra-day basis to generate a small profit on each trade, swing traders take positions for a number days to capitalize on larger price moves.
Swing trading is a very popular trading approach for digital currency traders as the price of bitcoin and other digital assets regularly show sharp price swings over the course of a week. These price swings enable traders to generate a profit if they manage to catch the right entry and exit points. Swing trading is, therefore, also a popular strategy to implement using trading bots.
How to Swing Trade Using a Bitcoin Trading Bot
Bitcoin trading bots enable digital currency traders to deploy trading strategies in a fully automated fashion using pre-determined parameters that are set by the user.
To use a bitcoin trading bot for swing trading, you first need to decide on the indicator(s) you want to use to provide buy and sell signals as well as the bot you will use to trade.
For example, you could build an automated trading strategy based on Bollinger Bands and the MACD with the popular bitcoin trading bot, Haasbot.
To do so, first, you choose a currency trading pair. Then, you set up the bot’s parameters, such as the amount you will use for each trade, how much percentage a trade needs to be in profit to close the position, and the size of the trades you want it to execute. Finally, you fund your trading bot account to get started. The bot will then trade automatically using the trading strategy you have set up with the funds you have put into the account.
Bitcoin trading bots are an excellent tool for traders to test and deploy technical indicator-based trading strategies and execute them on a variety of exchanges for a wide range of digital currency pairs.
Related Articles:
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- What Are Cryptocurrency Trading Bots and Should You Use Them?
- Crypto Investing Tools: Do Crypto Trading Bots Work?
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