What is Swing Trading?
takes advantage of brief price swings in strongly
trending stocks to ride the momentum in the direction of
Swing trading combines the best of two worlds -- the
slower pace of investing and the increased potential
gains of day trading.
Swing traders hold stocks for days
or weeks playing the general upward or downward trends.
Swing Trading is not high-speed day trading. Some people
call it momentum investing, because you only hold
positions that are making major moves.
By rolling your
money over rapidly through short term gains you can
quickly build up your equity.
How does Swing Trading work?
- The basic
strategy of Swing Trading is to jump into a strongly
trending stock after its period of consolidation or
correction is complete.
- Strongly trending
stocks often make a quick move after completing its
correction which one can profit from.
- One then sells
the stock after 2 to 7 days for a 5-25% move. This
process can be repeated over and over again. One can
also play the short side by shorting stocks that
fall through support levels.
- In brief a Swing
Trader's goal is to make money by capturing the
quick moves that stocks make in their life span, and
at the same time controlling their risk by proper
money management techniques.
What are the advantages of Swing Trading?
- Swing Trading combines the best of two worlds --
the slower pace of investing and the increased
potential gains of day trading.
- Swing Trading works well for part-time traders —
especially those doing it while at work. While day
traders typically have to stay glued to their
computers for hours at a time, feverishly watching
minute-to-minute changes in quotes, swing trading
doesn't require that type of focus and dedication.
- While Day Traders gamble on stocks popping or
falling by fractions of points, Swing Traders try to
ride "swings" in the market. Swing Traders buy fewer
stocks and aim for bigger gains, they pay lower
brokerage and, theoretically, have a better chance
of earning larger gains.
- With day trading, the only person getting rich
is the broker. "Swing traders go for the meat of the
move while a day trader just gets scraps."
Furthermore, to swing trade, you don't need
sophisticated computer hook-ups or lightning quick
execution services and you don't have to play
extremely volatile stocks.
We believe that the Swing Trading method is a better
way for the individual investor to attain superior
investment results through short-term trading in the
stock market. This trading strategy has been carefully
designed for the needs of the individual investor who
does not have the resources that institutions and
professional money managers may have.
With the TradersEdgeIndia.com daily
Swing Trading Picks Newsletter signals there is no
database to download and maintain; there are no charts
or indicators to analyze; no expensive software to buy,
install and program. Our daily guide conveniently
provides accurate entry and exit signals delivered to
you daily over the Internet. Nothing could be simpler!
How to Swing Trade?
To fully understand what swing trading really is, you
first need to understand what up/down trends are.
Up Trend: Simply put an uptrend is a series of
higher highs and higher lows. In other words, an uptrend
is a series of successive rallies that extend though
previous high points, interrupted by declines which
terminate above the low point of the preceding sell-off.
Often the high of the last "swing" in the trend will
serve as support for the next low. These areas are
Down Trend: Simply put a downtrend is a series of
lower highs and lower lows. In other words, a downtrend
is a series of successive declines that extend though
previous low points, interrupted by increases which
terminate below the high point of the preceding rally.
Often the low of the last "swing" in the stock's trend
will serve as resistance for the next high. These are
Long Swing Trades: Once an uptrend has been
identified a swing trader looks for buying opportunities
in that stock. This can be identified when the stock
experiences a minor pullback or correction within that
uptrend. The swing trader then activates a trailing
buy-stop technique. If prices break out above the
trailing stop loss, you will be stopped out and long in
the trade. If prices decline, your buy-stop will not be
Short Swing Trades: Once an downtrend has been
identified a swing trader looks for selling
opportunities in that stock. This can be identified when
the stock experiences a minor rally within that
downtrend. The swing trader then activates a trailing
sell-stop technique. If prices break down and fall below
the trailing stop loss, you will be stopped out on the
short side. If prices rally, your sell-stop will not be
Swing Trading your way to Profits
Would you like to rack up consistent profits in this
market? Would you like to know which stocks are setting
up for the next BIG move right now? When you join our
Swing Trading Picks Newsletter you'll learn to
find these hidden profits that other traders are missing
and trade them like a pro.
- Maximum holding period of just 7 days, average 3
- Profits objectives of 10% and 20% per pick.
- Simple strategy, no complicated rules to follow.
- All selections are based on our proprietary
research, no hype, no compensation received from any
company, just the finest stocks selections for our
Stay one step ahead of the crowd and join an
exclusive group of swing traders who discover profit
opportunities that no one else sees. Subscribe to our
Trading Picks Newsletter today!