Skip to main content

How Swing Trading makes sense for traders...

What is Swing Trading?

Swing trading are short term strategies to take advantage of price swings, either reversing back to the median or fading a rally.
Swing trading attempts to capture gains in a stock (or any financial instrument) within an overnight hold to several weeks.

BASIC CONCEPT OF SWING TRADING EQUIDIOUS RESEARCH


Why Swing Trade?

Swing trading involves holding a position either long or short at least overnight and or up to several weeks. The goal is to capture a larger price move than is possible on an intra-day basis. Swing trading assumes a larger price range and price move and therefore requires careful position sizing to minimize downside risk.
  • Swing Trading is a strategy that focuses on taking smaller gains in short term trends and cutting losses quicker.
  • The gains might be smaller, but done consistently over time they can compound into excellent annual returns.
  • Swing Trading positions are usually held a few days to a couple of weeks, but can be held longer.

Swing Trading Strategy

The swing trader's focus isn't on gains developing over weeks or months; the average length of a trade is more like 5 to 10 days. In this way, you can make a lot of small wins, which will add up to big overall returns. If you are happy with a 20% gain over a month or more, 5% to 10% gains every week or two can add up to significant profits.
Of course, you still have to factor in losses. Smaller gains can only produce growth in your portfolio if losses are kept small. Rather than the normal 7% to 8% stop loss, take losses quicker at a maximum of 2% to 3%. This will keep you at a 3-to-1 profit-to-loss ratio, a sound portfolio management rule for success. It's a critical component of the whole system since an outsized loss can quickly wipe away a lot of progress made with smaller gains.
Swing trading can still deliver larger gains on individual trades. A stock may exhibit enough initial strength that it can be held for a bigger gain, or partial profits can be taken while giving the remaining position room to run.
HIGH AND LOW OF SWING TRADING EQUIDIOUS RESEARCH
A swing trader looks to trade in liquid stocks/indices which are trending. They generally avoid flat markets, which is why some people call swing trading as Momentum Trading. For a swing trader the basic premise for any trade is that trend is your friend. There are many methods adopted by traders to identify a trending stock, like using the ADX (average directional index), moving average convergence divergence (MACD) or fast moving averages.
Come Out of your losses in Forex Market/Stock Market/Comex Market. Talk to our Experts. Give us a Missed Call @ (347)434 9044. FOR BEST SERVICES, Visit Us: https://www.equidiousresearch.com/services
Join 300,000+ traders who stay ahead of the market, submit your details with us by filling our CONTACT FORM.


Comments

Popular posts from this blog

What is Bullish and Bearish Market?

Trading has a language of its own, and if you are starting out long or short,  bullish and bearish  are trading terms you will hear frequently. Bullish and Bearish are simply terms used to characterize trends in the currency, commodity or stock markets. The terms bullish and bearish are often used to describe the conditions in the market or the  sentiment of investors .  They are very important terms and are used in nearly all types of trading, from  currencies  to stocks.  Traders can take advantage of both  bullish and bearish markets  if they have sufficient knowledge of the market conditions that are associated with these cycles.  When traders understand the meaning of bearish and bullish and are able to identify the cycles, they will know how to profit off of any market condition. What is the difference between Bullish and Bearish Market? Bearish and  Bullish  are simply terms used to characterize trends in the  currency , commodity or stock markets. If prices tend to be movi

Fundamental Analysis-Impacts of Non Farm Payrolls Data on Forex Market

Non farm payrolls in the US increased by 164 thousand in April of 2018, following an upwardly revised 135 thousand in March and well below market expectations of 192 thousand.  The most important payroll statistic that is analyzed from the report is the  non-farm payroll  data, which represents the total number of paid U.S. workers of any business, excluding general government employees, private  household employees , employees of  nonprofit  organizations that provide assistance to individuals, and farm employees. Non Farm Payrolls Indicator The Non Farm Payrolls indicator measures the net change in the number of people employed within the U.S. economy in jobs other than those which are farming or agriculture related. When the NFP data is rising, it means businesses within the United States are hiring more staff, usually in response to improved economic conditions and increased demand for their products or services either domestically or overseas. Furthermore, growth in the

5 Tips For Part-Time Forex Traders

The problem with part-time trading is that trading itself is very difficult and that there are many obstacles that one needs to overcome before becoming consistently profitable. Who can be Part-Time Traders?  The group of people includes students, young professionals, and old retirees – basically anyone who has to allocate most of his or her time to other endeavours, but still want to dip their hands into the markets. Trading Method or Trading Style Stick to a forex trading method or style that suits your schedule is very important in part time trading. The biggest problem for part-time traders is time . If you only have an hour to commit to trading every day, this can severely limit your options. In that particular situation, you may want to take a look at scalping or maybe switching to longer-term swing and position plays. In any case, the lesson is that before settling on a trading style, figure out your schedule and move on from there. Try to Increase Your Trading Time T