Monday, September 23, 2013

Swing Trading Strategies

There is a large learning curve once you start stock trading. Whether you are trying to learn how to day trade for a living or swing trade for a living. There are a lot of ups and downs and ebb and flow within the stock market on a daily, weekly and intra-day time period. You must get a feel for the market and the flows of whatever time period you decide to trade. In this article we will focus on swing trading and swing trading strategies.

Swing trading is buying a trending stock and holding on to the stock until the trend changes. When the trend is changing, the swing trader sells the stock. This usually occurs during a short time frame. Depending on the trader and the trend, the play may last anywhere from a week until a month. Knowing certain stocks and their trends helps the swing trader as does knowing how to chart stocks and find support and resistance.

Swing traders buy stocks in heavily traded companies with a long history, this allows them to enter and exit a stock a soon as they make the decision. Entries and exits on less heavily traded stocks can become difficult especially if the stock turns on you and you need to exit quickly. Traders will also use the historical data to chart their entry and exit points in an attempt to make their trades more successful on a consistent basis. As a stock begins to trend upward the swing trader will make their purchase and sell when the stock begins to head back down.

When you begin trading stick to you plan. If you start making money you will become more confident. This confidence can lead you to change your plan which in turn can be detrimental to your bank account. Before adjusting your plan and the amount you invest gain some experience. Put raising your investment after you reach a specific monetary goal, into your plan. You will have success and failure as a trader remain steady, gain experience and slowly raise your goals.

There are a lot of reasons to take up swing trading and using day trading strategies. There is a low risk involved, it’s not as faced paced and time consuming as day trading, and the trades are short term. Swing trading is often traded by those with and aversion to storing money in the stock market and worrying about a collapse and loss of profit. Once you are comfortable trading stocks you can begin swing trading in other indexes and commodities.