Topic: What is Swing Trading? (Read 141 times)

Great Summary of Swing trading. I like swing trading

Swing trading is good for side ways. After a big pump or big dump, price will have hours or days of sideways. The sideway time will be perfect for swing trading.

Sideaways can happen in the bull or bear market but the safest sideways are in bull markets. I mean after the sideway finish, price will move up and you will get more profit than you think.

With bear market, after the completion of sideway, price will fall a lot and you will get loss if you don't exit your swing trading position on time.

Looking for the direction of the market on a daily chat for a swing trader is a perfect culture. Going go 1hr  time frame even up to 15 mins is a bad top-down analysis and might result in series of fake outs.

For me as a swing trader you shouldn't go below one time frame directly lower than daily time frame such as your 4h or 8h depending on your chat settings.

Lower time frames for mostly minutes and 1h gives series of wrong signals. I think it would even be sweeter to scalp using this time frames since its faster for a candle stick to form and end within this short period

The types of trades in which short-term to medium-term gains are made on a stock (or any financial instrument) over a period of days to weeks are called swing trades. Traders in this type of trading primarily use technical analysis to search for and find business opportunities. These traders may use fundamental analysis in addition to analyzing price trends and patterns.
Swing trading usually involves holding a long or short position for more than one trading session, but this time is usually less than a few weeks or a few months. This is a general time frame; Because some trades may take more than two months, however, some traders may consider them swing trades.
Although these results are rare and can be achieved in very volatile conditions, swing trades can also be made during a trading session.
Mastering a large part of dramatic price changes is the goal of swing trading. While some traders are looking for stocks with swing movements, others may prefer more stable stocks. In any case, swing trading is a process in which the price of an asset is determined in which direction it will move, capital is transferred to a new position, and if the movements performed positively, profit is made.
It is important to know that successful traders in swing trading are only looking to dominate a part of the forecast price movement and then move on to the next opportunity.

The popularity of swing trading
Swing trades are one of the most popular forms of active trading, where traders use various forms of technical analysis to seek medium-term opportunities. If you are interested in midterm-trading, you should gain knowledge in the field of technical analysis.
Many traders rate swing trading on a risk/reward basis. By analyzing an asset chart, they determine when to enter, where to prevent a loss, and then predict where to make a profit and exit.
Swing trading traders use technical analysis primarily due to the short duration of trades. As mentioned, fundamental analysis can also be used to reinforce analyzes.
Swing traders often look for opportunities in daily charts, so they may look at 1-hour or 15-minute charts to find an accurate entry, stop loss, and profit levels.

Benefits swing trades

• It takes less time to make a trade than day trading.
• Maximizes short-term profit potential by capturing major market fluctuations.
• Traders can rely exclusively on technical analysis and simplification of the trading process.
• It is possible to use capital more efficiently and with higher returns.

Disadvantages swing trades

• Business opportunities are exposed to overnight and weekend market risk.
• The sudden return of the market can cause significant losses.
• Swing traders usually lose long-term trends in favor of short-term market movements.
• Higher fees and more fluctuations.

Swing trading strategies
A swing trader tends to look for multi-day chart patterns. Some common patterns include medium crossover movement, cup and handle pattern, head and shoulder pattern, flags and triangles. Candlesticks key reversal may be in addition to the other indicators are used to create a comprehensive business plan.
Finally, each trader in this type of trading designs a plan and strategy that gives him an advantage in many trades, including the search for trading stops that can identify predictable movements in asset prices. This does not seem easy; Because no strategy always works. The more desirable the risk/reward of a trading strategy, the less need to win in most trades to make a profit.

Schedule a swing trader
Professional traders, despite their experience, power, and knowledge, pay less for commissions, but are still limited by some things, including; The things they are allowed to buy and sell, the risk they can take, and the large amount of capital they have. Large organizations make very large transactions and thus quickly enter and exit the stock market.
In fact, swing is a combination of technical analysis and fundamental analysis that can be used to identify significant price movements. This type of trading is difficult for a typical retailer.
As a general rule, many traders are aware that they should never enter a situation with excessive risk and should only adjust the level of profit or stop loss if the uptrend continues.
In swing trading, it is rare for trading to take place after the usual opening hours, because at that time the market is swing and changes more than normal. The most important component in after-hours trading is to evaluate its performance correctly and accurately.
In fact, accurate recording of all transactions and ideas for financial purposes and performance appraisal is of particular importance; Because it involves reviewing all business activities and identifying areas that need improvement.

Here are some important things to know about swing trading:

• Swing traders do not focus on profits from weeks or months. The average trading time is 5 to 10 days. In this way, you can make a lot of small profits that lead to long-term returns. If you are satisfied with a 20% profit for a month or more, 5 or 10% profit every one or two weeks can bring you a significant profit.
• However, you should also consider the loss factors. A small profit can only lead to a growth in sample trades if the losses are kept low. Instead of stopping at a loss of 7 to 8 percent, accept the loss faster and at a maximum of about 2 to 3 percent, not more. This keeps you in a 3 to 1 profit-loss ratio, which is a kind of portfolio management law for success.
• With that in mind, you are actually mastering an important part of the whole system, because a large loss can quickly destroy the sum of the smaller gains.
• Swing trades have the potential to generate more profit in individual trading. A stock may have the necessary resistance to sudden changes that can be held to make more profit, or perhaps to make a small profit with more opportunities.
• Swing trades and daily trades may seem like the same thing, but there is a big difference between the two types of trades, and that is nothing but time. In fact, the time intervals for doing a trade are different. Traders buy and sell and trade every day for a few minutes or hours and then give up. Swing trades usually take place over days or weeks, but this is not the case for daily trades.

Source: https://www.investopedia.com/terms/s/swingtrading.asp