Just What is Swing Trading All About?

Are you curious about swing trading? Swing traders ride the swings or oscillations that markets make as the stock or currency pair pivots from one price level to another. Swing trading is a style of trading that can be used on any market. The most common methods of trading are day trading, swing trading and trend or buy and hold trading. Swing trading is found in between day trading and buy and hold trading and is highly recommended, for any kind of market. Let’s take a look at the other styles.

Day traders typically keep their trades confined to a single trading day, hence the name. Scalping is also considered a day trading style of trading. Scalping typically involves high risk but in turn offers potentially high profits. The other end of the trading spectrum is where you find buy and hold traders, holding their trades sometimes for many months. Without large trading capital, you will find that the buy and hold trading style can be difficult to profit from.

Swing trading is medium term focused and usually has traders holding trades for several days, but less than a week. Can you hold trades longer than this? Of course, but this is just a general rule of thumb. Some markets are more suitable for swing trading and it is important that you are trading the right currency pair or stock. Many traders swing trade because it is the only style to offer high rewards with the lowest levels of risk. This is the perfect balance for trading profitably.

Scalping, while sometimes profitable, usually results in many traders melting down and blowing up their trading capital. Only swing trading offers high rewards with low risk. This style of trading can be applied to forex, options, futures and many more markets.

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