Swing Trading – The Best Choice for Beginners

I need to explain in an analogy with other trading styles to make you understand about swing trading and its future.

You can develop an appetite for swing trading provided the trading style fits your mindset. The underlying principle that governs the swing trading is, your investment shall reflect short term returns with certainly a level of low risk.

You can make it your future and take it as a full time profession to make your livelihood but if you are comfortable in earning 12% to 24% profit per annum. Or at the best, dream about earning 5% to 10% profit per month moving in a direction/opposite of trade swings that benefit you in turn.

It can be a better future given that you are able to adjust comfortably. It is with your choice, preferences, and become habituated to the existing trends, and market conditions.

Yes, by now you must have understood that if your earning is limited to 5% to 10% profit it is best fit. Yet, you must know its merits and demerits as you shouldn’t feel panic later.

Merits/Demerits of Swing Trades:

If you plan to trade with a low budget then it may not be conducive like intraday, or options trading.

Technically, you are advised to do, in a single trade, an investment of about 1% to 3% of the trading capital. Which means, in a single trade if your investment is 1000 Rs. then you must maintain trading capital of INR 100000.00, and it could be rather difficult.

If you have low funds then dreaming about swing trading is not beneficial which is not so with intraday trading or scalping.

If you observe swing trading, it features short term trading that is from a few days to few weeks. This attracts overnight fees, interest charges, spreads, and slippages.

You may be subjected to overnight risk and gap risk as you are inclined to hold positions overnight or weekend. In such a situation, you may experience the market trend moving in opposition to your chosen ones and can cause a loss.

One major advantage you can sense is, you will have more time in monitoring the stock positions and you can do it with great care and attention.

You Need to Have:

However, if you possess qualities such as patience, emotional control, and discipline that makes you stick to your set plan. Then, you can make swing trading as your future destination in your profession.