Swing traders work mainly on the four-hour, daily and weekly charts. They enter on pullbacks or breakouts, place wider stops beyond the swing structure and use smaller position sizes to keep the risk constant. Because trades last days, they deal with overnight moves, weekends with thin liquidity and, on perpetual futures, funding payments.
Example
A trader buys ETH at $3,100 after a pullback to the daily 50-period moving average, with a stop at $2,900 below the swing low. Risking $200 on a $20,000 account (1%), the position is 1 ETH. Ten days later they exit at $3,600 for +2.5R. Funding at +0.01% every 8 hours cost about 30 × 0.01% × $3,300 ≈ $10.
Why it matters
Swing trading takes less screen time than day trading, catches bigger moves per trade and pays fewer fees. It suits people with a job, as long as they accept wider stops and have the patience to hold through pullbacks.
Common mistake
Using day-trading leverage on swing positions. Wider stops call for smaller size, and high leverage on a trade held for days makes liquidation by an ordinary wick far more likely.
Put it into practice
FAQ
- How long do swing trades last?
- Usually from two days to a few weeks, depending on the timeframe and the size of the move targeted.
- Is swing trading better than day trading?
- Neither is better in general. Swing trading needs less time and pays fewer fees; day trading gives more trades and faster feedback.
- Should swing traders use perpetuals or spot?
- Both work. Perpetuals allow shorts and leverage but cost funding on long holds; spot has no funding and no liquidation risk.