Boris Dzhingarov

   

Unlike traders who invest in shares to get capital gains over long periods of time, swing trading focuses on quick trades that bring in a lot of small wins adding up to big returns over time.

Generally, swing trading involves identifying stocks involved in a definitive trend and making numerous short-term trades in that market. The aim is to enter and exit the trends at their most profitable points in order to maximize profits. In most cases, a swing trader works with price moves lasting 10 days or less.

Swing traders buy when the price is on a downward trend, hold the stock for a few days, and sell when the price is on its next upward swing. They try to sell as close to the top of the swing as possible. Once the price falls, they repeat their trades.

However, there are instances when swing traders should not trade. These include instances when the market is too volatile or moving sideways.

Relatively Easy to Learn

The techniques needed to be successful at swing trading are straightforward and easily demonstrated. You don't have to spend time learning complicated techniques or using complex formulas to predict market trends. Unlike other investors who buy and hold stock long term, swing traders are only concerned with the stock chart. They do not concern themselves with company fundamentals such as quarterly earnings.

The Possibility of Making Bigger Profits

Swing Trading how to marke moneyAlthough swing trading focuses on bringing in small gains in short time frames, there is a high possibility of making huge gains on individual trades. If stocks exhibit a strong enough growth, swing traders can still hold on to them in the hopes of making bigger gains. In some cases, they sell some of the shares to take in partial profits and allow the remaining positions to continue running.

High Likelihood of Success

One of the advantages of swing trading is that it is easy to be successful. Since swing traders aim to make 5 - 10 percent profit on trades, they have a much higher chance of consistently achieving their goals.

Successful Swing Trading

A note of caution to potential swing traders: understanding swing trading and becoming successful at it takes time and dedication. You must take the time to study, practice and become adept at reading the movements of the markets. You must also be disciplined and practice strict money management.

Discipline enables you to make trades based on facts, not emotions. You must be willing to cut your losses and sell unprofitable stock instead of holding on and hoping that its share price will rise.

Most individuals who lose money on swing trading often invest too heavily in the outcome of individual trades and are unable to take small loses. As a result, they keep bad trades and eventually lose more money than they should have.

If you are just starting out and want to try out swing trading, it's best to seek the advice and guidance of expert swing traders.

 

Boris Dzhingarov graduated University of National and World Economy with major marketing.
He writes for several sites online such as Semrush, Tweakyourbiz and Socialnomics.net.
Boris is the founder of Tech Surprise and MonetaryLibrary.

  

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* Swing trading is as a kind of fundamental trading in which positions are held for longer than a single day.