It is a trading strategy used by traders to gain profit in share market by holding a share from overnight to several weeks.
Swing trading is a trading strategy used by traders to gain profit in share market by holding a share from overnight to several weeks. In this, traders use technical analyses to determine price trend and patterns. Swing trading is kind of short-term trading approach used at the time of trading stocks and other securities. Investors can look for useful swing trading tips, stock tips and intraday tips to clear concept of different trading strategies just like swing trading.
Swing Trading is a trading strategy that concentrates on taking the small return in short-term trends and cutting losses in the market. The profit amount might be smaller, but they can compound into amazing annual returns. Swing Trading stock position usually remains for a few days to several weeks.
In swing trading, trader ascertains a larger price range and price movement and thus it requires careful position sizing to manage risk factors. Swing trading involves a mixture of fundamental and technical analysis. Basically, swing traders rely on larger time frame charts including the 15-minute to 60-minute charts, daily and weekly charts. In this trading, it tends to require to hold the position for more time to gain expected price move.
Swing Trading Vs. Day Trading
Many traders often confuse between swing trading and day trading, these may seem like similar practices, but the major differences between these two are is a time frame, the time frames for holding a position is different.
Day traders enter and exit in trades within minutes or hours while swing trader’s enter and exit time are generally from one day to many weeks.
Swing trader depends on the market charts and patterns. They tend to look for multi-day chart patterns. Some of the important common patterns involve cup-and-handle patterns, moving average crossovers, flags, and triangles. Stop-losses should be used when swing trading to cross estimate profit target.
One more important thing, An investor should only start a swing trade after evaluating the potential risk and reward in position. As in bullish swing trades, the starting point will be compared with the stop out or profit target points to determine the potential rewards and risks of the trade, while on a bearish swing trade, the stop out point will be the largest price of the recent trend.
Both the trading strategy is a good option for the traders to gain considerable profit in the market, all you need strong skills to manage risk in trading. If an investor is new in the market and wants to enhance his knowledge then he can take the advice of financial experts with their trading services just like stock trading tips, commodity tips and binary option trading tips. These tips are very helpful for traders to achieve their desired profit.
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I am Kirti meliwal, working as Associate financial consultant in Epic Research Limited-the leading advisory firm in India.I have good knowledge about stock market, so i used to write articles on the same.