Previously, we gave an overview of different trading strategies and then dove deeper into the types of day trading, of which there are many. Now, before we move on to position trading, which is still synonymous with investing in common sense, we would like to refresh your awareness of swing trading, its main features, the secrets of profitable swing deals and, finally, how Grand Capital can help you here.
Swing trading is a popular trading strategy used by many traders who are looking to profit from mid-term market movements. Unlike day traders who focus on buying and selling assets quickly within the same day, and of course unlike long-term investors who tend to hold positions for weeks, months, or years, swing traders are somewhere in between, holding positions for a few days or weeks at a time, aiming to capture swings of prices within major trend in the market. Hence the name. Read here the clues for the correct marking of a trend, which is a fist step to your swing trading success.
One of the key characteristics of swing trading can be easily deduced from the definition above: it is much less time consuming than other types of trading strategies. Unlike day traders, swing traders do not need to monitor the market all day long. This makes it ideal for traders who have full-time jobs or other commitments, which is why it is generally most valued in the Grand Capital office.
Swing traders look for opportunities to buy at the bottom of a trend or sell at the top of a trend in order to profit from moments of pullbacks (corrections) during the formation of a trend. The use of day/week timeframes and strict adherence to technical analysis and chart patterns are the two primary strategies that are used here.
Technical analysis, let's remind you, is the process of analyzing charts and using indicators to identify trends and patterns in the market. Some of the most commonly used technical indicators in swing trading are Moving Averages, Moving Average Convergence/Divergence (MACD or MAC-D), Stochastic Oscillator or Relative Strength Index (RSI). All of these indicators are available on our web terminal and are easy to use.
Chart pattern analysis is the study of a visual geometric representation of price movements in the market. Some of the most common chart patterns used in swing trading are head and shoulders, double tops and bottoms, and triangles. We recommend that you back up this knowledge with our blog article from 2022.
And one more thing: in swing trading, unlike all other trading styles, emotions are everything, and the efforts of many weeks of persistence and analysis can be wiped out with one wrong move. So don't be alarmed by small pullbacks. It is perhaps the only trading style that does not rely so much on setting stop-loss levels, etc.
To ensure that you are protected from emotion clause, our market analysts provide you with the free daily reports from Monday to Friday, published on our Telegram channel and on the website. These reports are based on in-depth technical analysis and can be of much use in your decision-making.
Think of applying your swing trading using one of our six types of real trading accounts, or any of three demo accounts (or all together ). Our Client Support team is always here to help. Reach it in your Private Office, in the Online Chat (bottom right corner of the website) or at [email protected].