Swing traders try to profit from price movements in shorter time frames. Swing traders make profits by trading on the basis of technical analysis, and base their decisions on market trades.
Swing traders do not follow any trends like day traders. Swing traders invest for a short period of time, sometimes weeks, from the first day of their trade, and exit their positions earning returns of 10% to 15%.
swing traders strategy
Swing traders invest for a short period of time, so traders try to make a profit in this trade, and therefore use many technical tools, only for the period that the position is close to trading.
The swing trading strategy uses popular trading tools such as Fibonacci retracement moving averages, Bollinger Bands, and traders monitor chart patterns over several days.
• Double Bottom Chart Pattern
• Triangle Pattern
• Moving Average Crossover Pattern
• Head and Shoulders Pattern
• Flag Pattern
• Cup and Handle Pattern
• Pennant Pattern
• Double Top Pattern
Let’s take a look at the easy swing trading strategy.
Support and resistance
Support and resistance play a very important role for traders in swing trading, and therefore support and resistance lines are two important indicators. Support represents a lower level in trading, while resistance represents an upper level in trading. The asset moves within the price range. Price above resistance is referred to as an overbought position and indicates that the asset will eventually lead to an increase in buying. Similarly an area below support is known as overselling. A swing trader enters a sell position when the asset price jumps over the resistance, and executes his position with the help of a stop loss.
In trading, traders are aware that the value of the stock sometimes bounces back to different levels, with the help of Fibonacci retracements to help identify support and resistance levels. Traders draw horizontal lines at different percentage levels to identify the 23.8 percent, 36.2 percent and 71.8 percent horizontal levels.
Under trends trading, traders see the good performance of stocks through newspaper or any media, and on the basis of this news, traders do swing trading and exit their positions by earning some percentage profit.
Simple Moving Average (SMA)
The most popular and most used indicator is the Simple Moving Average, which is continuously updated with the help of this, and with the help of this the average of the previous week is taken.
The best (SMA 44) and (SMA 200) are considered the best.
Benefits of using strategy
Swing trending is done for a short time period in which there are quick gains as well as quick losses, and to reduce this loss, a strategy has to be followed in swing trending, which helps you to focus on the big trade
Swing trending is based on technical indicators. The indicator lowers your risks, and increases your chances of making a profit.
Charts for swing trading
Candle stick chart is best for this trending. With the help of candles in candle stick chart, you can easily predict whether the market will rise or fall.
Swing trending in the stock market is harmful, so more experienced traders will use complex techniques to strengthen your profit making foundation.