subject: A Brief Introduction To Swing Trading [print this page] A Brief Introduction To Swing Trading A Brief Introduction To Swing Trading
Swing trading is a concept of trading in stock market when stock market has no specific direction. Traders who follow trends depending on Exponential Moving Average (EMA) intend to invest on stocks for longer period of time and wait for stock prices to go up. But this requires patience and regular tracking of market. But for those who want to make money and cannot wait for long, swing trading is the perfect type for them. One can make money by rise and fall of stock prices. In swing is, therefore, perfect for beginners. Swing trading involves one/two days to a week of time between stock buying and selling.
It is to mention that swing trading is not only a good option for beginners but also helpful for financial big shots to make money in a market when for a couple of days goes up and then again comes down. Thanks to swing trading everybody can now participate in stock market transactions and can earn a huge amount of money. Swing trading is based on the logic of picking up penny stocks and selling them when it becomes of a dollar value. Thus swing trading can help booking 99% profit at times. If this can be continued consistently, one can make money like magic. This awfully lot of money making feature attracts all variants of investors towards swing trading. Now the question is why is swing trading so profitable? The answer to this is currency and stock price fluctuations. Currency fluctuates more than stocks and hence it involves more trades a day or in a week. The choice that one needs to make is the right wave to pick up
So swing traders are not concerned with the timing of buying stocks at the lowest price. Investors are more concerned with the directional changes in the price behaviour of the underlying asset. Swing trading is in between two extreme conditions i.e. optimism and pessimism. Day trading and trend following requires patience but for investors who want quick money and cannot hold patience for long and do not want to get distracted and wait for time to come to buy/ sell a particular stock/currency, swing trading brings the solution to them. Given the status quo of the global economy its swing trading that can help investors earn loads of profit with little or no time lag and patience. Swing trading can be fruitfully used by paying heed to technical analysis for following short term price momentum. Swing trading hardly assigns any importance to fundamental analysis or intrinsic value of stocks. For swing trading, the swing charts are highly important. Different types of charts are used for good swing trading e.g. Kagi chart, Gann- based swing charts etc.
But like other forms of trading, swing trading also has got some inherited risks involved in it. Swing trading is not free from sector, market and company risk. Due to this at times, opposite to huge profits investors may find their capital being battered.
D Harris (Forex Guru)
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