What is Swing Trading for Dummies: Popular Strategies

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There is a couple of various trading strategies that traders prefer using most. In today’s article, we are going to discuss what is swing trading.

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What is Swing Trading?

Swing trading is all about making profits on every stock gain from a period of a few days to a couple of weeks. Here traders use technical analysis to find any chances of making profits. Fundamental analysis is not forgotten — it is used to find trends and trading patterns. 

More About Swing Trading

Basically, there are no fixed time frames in swing trading strategies. Any long or short trade that lasts longer than one session up to a couple of months can be considered a swing trade. Both volatile and sedate stocks are used. It all depends on the preferences of the trader. All that has to be done is to catch a chunk of a potential price move. After that is done, traders wait for the next opportunity.

You might be interested in our article about Swing Trading Strategies For Forex.

How to be successful in swing trading?

Swing trading is based on technical analysis. You need to master this kind of analysis in order to be capable of making profits. There are many risks. To prevent losses, stop loss is placed forehead. Chart analysis gives a picture of the best time to enter the market. 

Technical analysis is used because of the short session terms. However, fundamental analysis is also used, and it helps a lot. For instance, if you see a bullish stock, you might want to use fundamental analysis to check out whether the stock is favorable or not.

Pros of Swing Trading

  • Takes less time than day trading;
  • Gets the highest profits from short-term trades;
  • It is possible to use only technical analysis.

Cons of Swing Trading

  • There are plenty of risks;
  • There can be a sudden trend reversals that bring high losses;
  • You will often have to skip long-term trends and wait for short-term ones.

Swing Trading Strategy

If you are already here, we offer you reading our Day Trading Strategies for Beginners article to broaden your understanding of trading overall.

The strategy in swing trading is simple — you have to wait for special trading patterns like MA crossovers, triangles, head and shoulders, and others. Do not forget about your trading plan! Stick to it!

Swing trading is special because the strategies here are not guaranteed to work all the time. One trade they will work, the other they will not. That is why you need to come up with a favorable risk/reward set up to cover all the other trades you had and will have. This way, winning all the time will not be necessary. 

Swing Trading Example in Apple Stocks

Here is a screenshot of how the AAPL stock had its price jump much higher than usual. 

The charts had a small cup and handle pattern, which many traders used to foresee the continuation of the price growth. This is a great example for all traders that want to go in for swing trading.