Swing trading is the process of holding onto a stock for a very
short period of time. A Swing trader studies stock prices and
identifies cycles or swings in prices. A cycle could span multiple
days, weeks or even months. But, a swing trader does not hold
stocks for the long term.
A Swing Trader uses Technical Analysis only to select stocks
to buy. Identifying patterns or cycles that a stock moves in
requires analysis of the stock’s price over time. Once a stock
price is analyzed you will notice that price is not random,
price anticipates fundamental change and that the relationship
between price and time is linear.
Range bound, channeling, cycling or price patterns are all terms
that describe stocks that are moving sideways.
There are countless patterns & cycles
that constitutes a great rise or dip in the markets. Most people
don’t know this but the markets tend to follow patterns & I’m
not just talking about your fifty or two hundred day moving
averages. There are several patterns that happen either on a
daily basis or every few days.
The best way to swing trade while
stock trading is to find a trend that suits you
& stick to it. So in a bull market or bear market, stocks will
be carried by the momentum for long periods but in one direction,
this will suit some swing traders as they will not have too
much to think about, there’s enough pressure on the trader so
the less complicated the better. These traders will follow the
momentum & take advantage of the longer term up & down trends.
So what’s the best position to be in when
swing trading? The best market for a swing trader would have
to be a market that not really moving at all. In this market
there are many fluctuations on a daily basis but the market
will never really move up or down significantly. This is a great
environment for swing trading as the trader is best positioned
to capture the rise & declining patterns on a daily basis.
By doing this the trader has many opportunities to capture patterns
that will repeat again & again. Many traders will stick to the
same stock trading it over & over again for months on end, usually
the stock will be the same price it was when they started trading
it but they will have made a lot of money from the many up &
down patterns. Always use a
technical analysis chart like
Bollinger bands to figure out which way a trade may be
heading.
So’ is swing trading for everyone? Not really. A swing trader
should be well versed in swing trading before taking part &
should not be trading with scared money i.e. They should have
enough to cover themselves in case of loss & be willing to trade
again soon after. There’s no time for second guessing while
swing trading.
You either have a strict plan for yourself that you’ll stick
to no matter what happens or you shouldn’t bother with swing
trading. You should be willing to dump stock the moment it hits
its upper band or crosses over the lower band. Overall, trend
following is probably the best way for novice traders to make
money, all you need to do is find a good stock that follows
the same trend month after month & take advantage of it.
Where would I get more information about Swing
trading?. Here we list the most comprehensive & important sites
on Swing trading. So, can you improve your swing trading results
by using the information here?, the short answer is Yes. Take
a look at the following sites below & try to get a handle on
how swing trading software really works & how you can make a
lot of money in a short period of time.
Swing Trader Guide -
Without a doubt one of the best Swing Trading sites on the
net today. This site has a a lot of emphasis on trading
stocks on a strong up trend. The "master
plan" is a brilliant guide for swing trading, it
explains everything including entry, protective stops
& profit taking.
Trading Markets- Another great site for swing trading as well as lots of other
information on how to trade the markets. You can start now by
signing up for the free seven day trial.
Trading Tutor
- Primarily based on the Fibonacci trading method, this site
offers a weekly free newsletter once signed up. There is also
a wealth of information on other trading methods in this free
news letter.
FibTimer - Again another great
site that also includes a free biweekly news letter. The information
here is definitely for you if you need the real ins & outs of
swing trading & how you can make it work for you.
