Swing Trading Crypto: The Two-Day-to-Four-Week Horizon

Swing trading in cryptocurrency markets has been found to be an effective strategy by a Yale study of cryptocurrency returns. The study discovered that the market behaves predictably between two days and four weeks, allowing traders to capture one directional move or 'swing' from a low to a high.

The study found that when Bitcoin's weekly return increases by one standard deviation, it is followed by roughly 3% higher returns the next week. This trend persistence allows swing traders to own a position for several days to a few weeks and capture a single swing in the market.

Swing trading differs from day trading as it focuses on holding positions for longer periods of time, typically between two days and four weeks. In contrast, day traders hold positions for minutes or hours and continuously monitor the market throughout the day.