What is Swing trading?
Swing Trading takes advantage of brief price swings in strongly trending stocks to ride the momentum in the direction of the trend.
What is Swing Trading
- Swing trading combines the best of two worlds—the slower pace of investing and the increased potential gains of day trading.
- Swing traders hold stocks for days or weeks playing the general upward or downward trends.
- Swing Trading is not high-speed day trading. Some people call it momentum investing, because you only hold positions that are making major moves.
- By rolling your money over rapidly through short term gains you can quickly build up your equity.
How does Swing Trading work?
- The basic strategy of Swing Trading is to jump into a strongly trending stock after its period of consolidation or correction is complete.
- Strongly trending stocks often make a quick move after completing its correction which one can profit from.
- One then sells the stock after 2 to 7 days for a 5-25% move. This process can be repeated over and over again. One can also play the short side by shorting stocks that fall through support levels.
- In brief a Swing Trader’s goal is to make money by capturing the quick moves that stocks make in their life span, and at the same time controlling their risk by proper money management techniques.
What are the advantages of Swing Trading?
- Swing Trading combines the best of two worlds—the slower pace of investing and the increased potential gains of day trading.
- Swing Trading works well for part-time traders — especially those doing it while at work. While day traders typically have to stay glued to their computers for hours at a time, feverishly watching minute-to-minute changes in quotes, swing trading doesn’t require that type of focus and dedication.
- While Day Traders gamble on stocks popping or falling by fractions of points, Swing Traders try to ride “swings” in the market. Swing Traders buy fewer stocks and aim for bigger gains, they pay lower brokerage and, theoretically, have a better chance of earning larger gains.
- With day trading, the only person thats surely is getting rich is the broker. “Swing traders go for the meat of the move while a day trader just gets scraps.” Furthermore, another advantage with swing trade, you don’t need sophisticated computer hook-ups or lightning quick execution services and you don’t have to play extremely volatile stocks.
Many believe that the Swing Trading method is a better way for the individual investor to attain superior investment results through short-term trading in the stock market. This trading strategy has been carefully designed for the needs of the individual investor who does not have the resources that institutions and professional money managers may have.
Trading Strategies and Newsletters From Shogun Trading