A Comprehensive Guide to Swing Trading

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Swing Trading

With the world evolving towards diversified trading techniques, swing trading is the new ongoing trend. Traders today are looking for varied trading methods. Something that suits their lifestyle, their preferences and their investing methods. Being one of the most popular forms of active trading, the traders are looking for intermediate – term opportunities with the help of varied forms of technical analysis using copy trading app.

No more questions, no more joining dots – let this article help you with all you need to know about Swing Trading.

Swing Trading | The Introduction

Swing Trading revolves around the idea of capturing ‘one move’ in the markets. We all know how price fluctuations are the core of the money market. This strategy works on identifying the lows of the price range and buying at that point. Or on the other side, identifying the high of the price range and selling at that point. One high and one low is identified as a swing.

Talking about the best market conditions in swing trading, the range and weak trend are considered as the go – to. This trading style attempts to capture short – to medium – term gains in a stock or any other financial instrument lying over a period of few days to several weeks.

Swing Traders | How do they work?

Swing Traders are the traders that use technical analysis to look out for trading opportunities. They may also utilize fundamental analysis apart from the usual price trends and patterns. These traders gain profits through utilizing the calculated risk/ return ratio based on the stop losses and the profit targets. Not only this, they also calculate profits or losses based on price action strategies or the usual technical indicators.

Understanding Swing Trading

Starting off with the goal of swing trading, the core idea revolves around capturing a chunk of a potential price move. This trading style uses technical analysis taking in perspective the short term nature of trades. Apart from this, fundamental analysis is further on used to enhance the analysis. The chart analysis uses the chart of an asset which gives them an insight about the stop loss, the entry and exit points. Understanding this through a real life example; for example, if you are risking 2 USD per share on a setup could yield a profit of 5 USD, this is a favorable risk/ reward ratio. Talking about the other aspect, risking 2 USD to make 2 USD only or 1.75 USD isn’t a good choice.

Taking into account how swing traders look for opportunities, they use daily charts and keep a watch of 1 – hour or 15 – minutes through charts to find the exact entry, stop loss and take – profit losses.

George Rossi

George is the Chief Market and Broker Analyst at brokertested.com. Prior to being recruited by brokertested.com, I served SVS Securities as Chief Market Analyst for two years. Earlier, he joined Morgan Stanley in Nov 2013 as Research Analyst.

George is a well-rounded financial services professional experienced in fundamental and technical analysis, global macroeconomic research, foreign exchange and commodity markets and an independent trader.


Updated: 08/26/2021 — 11:00