What is Swing Trading?

About Swing Trading:

• It is a style of trading where investors keep their positions for longer than a single day, typically holding onto stocks for several days or weeks. Its goal is to capture gains in a stock's value as it swings up and down.
• A swing trader will look for stocks with high volume (a lot of trading activity) and volatility (price movement).
  • The entry into a swing trade involves setting up stop-loss orders (to limit potential losses) and target prices (to capture profits) based on support and resistance levels.
• Swing traders buy at support (lower price level) and sell at resistance (higher price level) anticipating the stock's price to swing back and forth within these bounds.
• What's the objective of swing trading?
  • The primary goal is to profit from short- to medium-term fluctuations in stock prices. Traders aim to enter and exit positions quickly, typically holding stocks for 2 days to a few weeks.
  • Swing traders capitalise on both upward and downward movements in the market, seeking to take advantage of trends and momentum.
• Swing trading offers flexibility and can be less time-consuming compared to day trading. Traders can benefit from short- to medium-term gains and adjust their positions swiftly based on market conditions.