What Is Swing Trading?
I get many calls each week of people looking for a trade system and so one of the first questions I ask them is, “do you have time to day trade or are you looking to swing trade”. I did not think that I needed to explain what swing trading is, but it can be confusing. Here is the definition.
Swing trading is a speculative activity in financial markets where a tradable asset is held for between one to several days in an effort to profit from price changes or ‘swings’. …
Sure sounds simple. You are trying to catch larger moves in the market so you hold your trade for a day or more. Sometimes it depends upon the time frame of the chart. So, if you trade off of a daily chart you might hold a trade for a week or more and if you trade off of a weekly chart, you might be in a trade for a month. Here is an example of a forex swing trade.
These are two examples of recent swing trades on Daily charts of the AUDUSD currency pair. One of them you were in the trade for 11 days and the other only about 6 days. So, it can vary on how fast the market moves toward your targets. The key is they are larger trade with bigger stops and targets. It is not like day trading, where you hold positions for very short timeframes and go for small targets and stops.
Here is an example on a stock Swing Trade. In this example the stock trade took about 3 days and captured a $24 move in Google. Since Google is such a high priced stock, we would swing trade this with an option on Google and make a very large percentage gain on our account.
As you can see you can swing trade any market. It is a powerful way to grow your account and the best thing is you don’t have to sit in front of your computer all day. Since you are going for larger trades, it is more of “set and forget” type of trading. Just check once or twice a day and go about your daily business.
I hope this helps give you a better idea of what swing trading is and how you can use it to trade with less stress and emotion, since you are not watching the markets all the time and worrying about every tick of price movement in the market. If you want to download a free Stock Swing trade method. Just go to this link and enter the password PTU.