Best Swing Trading Tips
Swing trading is a trading method that relies on catching reactions within major trends either up or down. Generally a swing trade will last between 2 – 5 days. The swing trader should not look to turn a profit in a day it is usually best that he holds a stock anywhere from three days to three or four weeks.
Swing trading is most suitable for people who do not have the time to dedicate to sitting in front of a computer to monitor the markets when they are open and many traders who are novices find swing trading to be the style that they are best suited for.
Swing traders tend to pick stocks that are traded on the big three exchanges which are the NYSE, AMEX and NASDAQ because they are the most actively traded markets so these stocks have the greatest chance of going very high or low in a given day. This means that the swing traders would not have to hold onto stocks too long before making a profit.
Swing traders prefer to trade when the market is not in full bull market or in full bear market and most are poised to make the most profits when the market is relatively static. The swing traders will make money with short-term movements in the market but remember, as a swing trader, you will not make a lot of money with only one trade.
The best profits will be seen from making multiple trades over a period of time.
Swing traders will usually only buy and sell once the stock has reached its baseline, so that they could make their trade at the best possible moment to get the most return on their investment. A swing trader can earn a possible 10-15% gain on his investment, which makes it a good strategy for beginners or intermediate traders.
To make the most gains, swing traders try to sell their stocks as close to the upper or lower margins without jeopardizing their chance at missing the large gains because if a swing trader waits too long he runs the risk of the market turning around and they could wind up losing money instead of gaining.
But with practice, a swing trader can learn to read the market indicators and avoid this from happening often. One of the best things about swing trading is that beginners can find out pretty quickly whether their decisions to buy or sell have paid off, which can be an enormous incentive to continue investing.
Remember that swing trading is not as quick as day trading to see a return on your investment and it also does not require the attention to market conditions and details that is necessary for day trading to be successful, in addition, swing trading is less stressful than day trading.
Most often day traders find themselves stressing over all of the stock trades they have to make in a day because they hope that they have made profitable decisions.
Here are a few short term trading tips that will actually work to your advantage.
Tip #1 – The Best Way to Spot a Swing Trade
Okay, so you need to quickly learn how to spot a swing trade so you will have to find out the support and resistance levels in order to find out this information. You will watch the price move watch which way it goes (support or resistance), then do a signal that is going in the opposite direction.
Tip #2 – The Best Way to Confirm a Swing Trade
It is important that you look for confirmation when doing this because you want to observe the turn of price momentum. You want to make sure that the support and resistance relationship between you and your trade are going to hold up, and be ultimately stable for the next couple of days – otherwise you can lose a great deal of your investment.
Tip #3 – Finding a Swing Trading Mentor
You want to keep the chances of profit on your side as much as possible and in order to do this; you can find a swing trading mentor that can teach you how to handle trades. By finding a great mentor; you can learn the ins and outs of swing trading fast.
Wishing you the best of luck in your trading,