Swing Trading Strategy
Holds positions for days to weeks, riding medium-term sentiment shifts and market cycles for larger per-trade profits.
What it is
Swing trading targets medium-term price movements that unfold over days to weeks. Swing traders identify markets where sentiment is likely to shift — due to upcoming events, changing narratives, or mean-reversion from overreaction — and hold positions through the move. They operate between the extremes of scalpers (minutes) and long-term holders (months), capturing the middle ground where information asymmetry and sentiment cycles create the largest per-trade opportunities.
How it works
Swing traders analyze the fundamental drivers of a market — polling data, news flow, historical patterns — and identify situations where the current price doesn't reflect the likely trajectory. They enter positions when they believe sentiment is about to shift and hold through the move, exiting when the price reaches their target or the thesis is invalidated. Holding periods typically range from a few days to several weeks.
Position sizing and risk management are critical because swing traders endure more price volatility per trade than scalpers or market makers. They accept short-term drawdowns in exchange for larger per-trade profits. The best swing traders maintain a focused portfolio of 10–50 active positions rather than spreading across hundreds of markets, allowing them to deeply understand each market they trade.
Sentiment Cycle
Buy below threshold Sell above $0.55 — ride the sentiment cycle.
How it works in practice
On prediction markets, swing traders capitalize on the sentiment cycles that accompany major events. Before an election debate, they might buy the underdog at a discount, expecting a sentiment bounce. After a surprise news event causes panic selling, they buy the dip, expecting mean-reversion over the following days. Their entries are deliberate and their exits are planned.
Swing traders on the platform are identifiable by their moderate market coverage (typically under 1,000 markets), average holding periods of 1–30 days, and relatively low trade frequency per market. They tend to concentrate capital in markets where they have the strongest conviction rather than diversifying across everything.
Optimal Holding Period
Returns peak at the days-to-weeks range, then diminish. Too short misses the move; too long adds risk.
Key Characteristics
The behavioral fingerprints that identify a swing trader in on-chain data.
Risks to Consider
Top Swing Trader Traders
Ranked by risk-adjusted performance score.
Other Strategies
Buys both sides of a market when the combined cost is less than $1.00, locking in a risk-free profit on every pair.
Provides liquidity on both sides of the order book, profiting from the bid-ask spread while maintaining minimal directional exposure.
Takes liquidity with rapid-fire market orders across many markets, capturing small price movements with very short holding periods.
Systematic, high-frequency execution with a hybrid maker/taker approach. Sits between scalpers and market makers in speed and liquidity provision.
Builds both-side positions over time, merging pairs when the cost is favorable. Patient capital deployment in volatile markets.
Goes deep in one domain — sports, politics, or crypto — putting 85%+ of volume into a single market category where specialized knowledge creates an edge.
Follows price trends with statistically validated edge, scaling positions based on signal strength and maintaining consistent alpha generation.
Takes one-sided conviction bets across diverse market types. The generalist approach — trading whatever looks mispriced, wherever it appears.
Takes positions based on conviction without a demonstrated systematic edge. High activity, but returns are driven by market direction rather than repeatable strategy.