Skip to main content

SWING TRADING



Swing trading is a capture short- to medium-term price movements in financial instruments such as stocks, commodities, or currencies. Swing traders typically hold their positions for a few days to a few weeks, focusing on taking advantage of "swings" in price trends, whether upward (bullish) or downward (bearish).
 
Characteristics of Swing Trading: Time period: Positions are generally held longer than day trading but shorter than long-term investing means 2 to 15 days.

 Technical Analysis: Swing traders rely heavily on charts, patterns, and indicators (e.g., moving averages, Bollinger band RSI, RS, MACD) to identify potential entry and exit points. 

 Market Trends: They aim to trade in the direction of the overall trend or during periods of consolidation when price fluctuations occur within a defined range. 

 Risk and Reward: Swing traders seek to maximize gains from short-term price movements while managing risk through tools like stop-loss orders. 

 Advantages: Less time-intensive than day trading, as positions don't require constant monitoring. Offers more opportunities for profit compared to long-term investing due to the shorter holding period. 

 Disadvantages: Market volatility can lead to losses if the price moves against the position. Holding positions overnight carries risks, such as news or events affecting prices. Swing trading suits individuals who have time to analyze the market daily but prefer not to be tied to their screens all day.

 Daily Routines of swing trader 
 1) weekly analysis of stock and indices.
 2)create buy and sell list.
 3)Prepare a complete trading plan before market open.
 4)Buy and sell the stock in first zone(9:15 to 11:15)
 5)Monitors the stock at regular intervals. 
6)Put the trailing stop loss/time stop loss.
 7)Shut all the external noise.
 8)Check the positions before market close.
 9)Journaling - Reason to buy /sell

Comments

Post a Comment

Popular posts from this blog

Bull Sash and Bear Sash

What is Bull Sash?  A Bull Sash pattern occurs when a bullish candlestick (usually a white or green candlestick indicating price increase) completely engulfs the previous bearish candlestick (usually a black or red candlestick indicating price decrease). • Formation: 1)The second candlestick opens lower than the first but closes higher, surpassing the open and close of the first candlestick. 2)This suggests a reversal in market sentiment from bearish to bullish. Significance: 1)The pattern indicates strong buying pressure and often signals a potential reversal to an upward trend, especially after a downtrend. 2)It suggests that bulls (buyers) have gained control, overpowering the bears (sellers). Key Points for Recognition: Location: Often found at the end of a downtrend or during a period of consolidation. Volume: Higher trading volume during the formation strengthens the reliability of the pattern. Confirmation: Traders typically wait for the next candlestick to confirm the uptre...
Post a Comment
Read more

Long-term versus short-term Investment

Long-term  investment  versus  short-term investment Long-term and short-term investments differ primarily in their investment horizons and objectives: 1.Long-Term Investments :    - Duration : Typically held for more than five years.    - Objective : Often aimed at significant growth, such as for retirement or major life goals.    - Risk and Return : Generally higher risk but potentially higher returns. The investment can weather market fluctuations better over time.    - Examples : Stocks, real estate, retirement accounts. 2.Short-Term Investments :    - Duration : Usually held for less than five years, often a few months to a couple of years.    - Objective : Focused on quick gains or preserving capital with limited risk.    - Risk and Return : Lower risk but often lower returns. They are more sensitive to market volatility.    - Examples : Certificates of deposit (CDs), short-term bonds, m...
Post a Comment
Read more