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A COMPREHENSIVE GUIDE TO SWING TRADING

by on June 21, 2021 in Uncategorized

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Just as there is a plurality of style in every society or community, people deliberately choose a preferred method to get things done, so it is in the financial trading world. Swing trading is a trading style that has been adopted by a large section of the financial trading community. The growing number of swing traders clearly shows that it is a viable and beneficial trading style.

What Is Swing Trading?

Swing trading is a trading style that is geared towards making short and medium-term gains on a financial instrument. The most favored financial instrument for many swing traders is stocks. Swing traders analyze price trends before every trading session to predict what an asset’s price will be at certain locations. When this is ascertained, swing traders then anticipate these locations and prepare to make a batch of profit if their predictions are proven to be accurate.

The major technique employed by swing traders is technical analysis through chart reading. Through charts, a swing trader can analyze the previous character of an asset and determine where to place a stop loss and at what locations a large-enough profit haul can be expected. Swing traders also utilize fundamental analysis to gain more understanding of the trend of a particular asset. Before you decide to start as a swing trader take a look at Axitrader.

A swing trader might prefer a meta trader 4 platform for this reason. MT4 platforms offer an advanced chart analysis medium due to their impressive technical indicator, and integrated fundamental analysis capabilities. A Meta trader 4 brokers list will reveal the brokers who offer this trading platform such as vantage though it is advisable to check vantage-fx-review to understand well.

If you would love the chance to analyze multiple charts at the same time, you should make the meta trader 5 brokers your trading hosts. An Mt5 brokers list will show you the numerous brokers that offer this platform in the likes of  alpha trade

Swing Trading Techniques

There are several techniques that a swing trader could use. These techniques include;

·         Fibonacci Retracement: This technique, based on a numerical sequence, is an effective way for traders to identify support and resistance. It also helps in predicting the appropriate reversal levels on the asset trend chart. It uses standard retracement levels of 23.6%, 38.2%, 50%, 61.8%, and 78.6% to predict reversal levels and set sell positions. Sell positions are usually set for downward movement at 61.8% and are usually exited at 23.6%.

·         Channel Trading: Channel trading is a technique that relies largely on the trend of market prices. A channel trader seeks to spot an asset that is in a favorable position and to sell once a decline is noticed. 

·         MACD Crossover: This technique uses two signposts which are the MACD line and the signal line, these lines cross each other from time to time and send signals of a bullish or bearish trend. 

·         Support and Resistance Triggers: support and resistance levels are indicators for price levels that are below and above the market prices respectively. They show the trader when there is a more compelling argument to either sell or buy stocks. Stop losses are usually placed at the support lines.

The major differences between a swing trader and a day trader are that a swing trader doesn’t close activity at the end of each day and therefore doesn’t spend as much time in the market. As a swing trader, your success partly depends on your technical analysis skills, which is something that can always be learned and improved upon through practice. Above all, it all depends on your preference and style.

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