Swing Trading – A Right Choice for Traders

Before I express my opinion on swing trading and whether it can be portrayed as a good or bad strategy l shall give a brief introduction of swing trading strategy, key components of swing trading. In addition, list a few strategies that will compel you to change your mindset. Hence, let’s start with:

Essential Info:

1. Enter into swing trading if you are a beginner.
2. You can consider it to be a part time job, as it requires less time and attention.
3. You must invest in it when you want to make short term profits on your investments.
4. swing trading falls between intraday trading and options trading.

Darker Side of Swing Trading:

1. You will lose money if you fail to select the right kind of stock brokerage companies supporting you with reasonable brokerage charges.
2. You are most likely to be subjected to emotional stress, stock volatility, and taxes.
3. You must apply the principles of compounding and diversification for good returns over the long run.

Let us take a positive note of the Swing Investments and try to realise a few strategies.

Key Components of the Swing Trading: 

Key components that lay a better path in swing trading are risk management, technical analysis, entry/exit strategies, and money management.

Swing Trading Strategies You Must Understand:

Bollinger Band Breakout Strategy

It is a technical analysis tool that applies simple moving averages involving average price movement in a defined timeframe.

Moving Average Crossover

You can employ two or more moving averages differing on timeframes.

Relative Strength Indicator

The rapid volatility in stock markets makes the measuring of the magnitude of price changes difficult but the relative strength indicator enables you to analyse overbought/oversold stocks.

Range Trading

Stock prices tend to oscillate between two extreme stock prices then such extreme values are known as support/resistance levels. The price movements between these levels makes you earn money.

Fibonacci Retracement Pattern

This pattern is defined on a principle that states, before reversing, the certain percentage of the prices within the trend retrace quite oftenly.