Swing Trading Stock Strategies
Many people that hold down full time jobs outside of the financial markets don’t have the time to actively trade stocks everyday. Other than long term investments, there is really only one way for these people to participate in the markets - swing trading stock strategies. This method benefits people with limited time to devote to trading because it does not require sitting in front of the computer all day like scalp trading or traditional day trading. However, swing trading tactics are employed by professional traders who are by definition day traders. Although they normally keep their stock day trading accounts separate from their swing trading accounts.
Swing trading usually is defined as holding a position in a individual stock anywhere from a few days to few weeks. These positions are not considered investments since the focus is on technical analysis rather than long term growth potential associated with investments. A swing trader essentially looks for chart patterns which suggest an individual stock will make a move in a certain direction within a particular time frame, normally within a few days or weeks. If he is correct in his analysis, the swing trader will close the position and bank profits off the move.
Various swing trading stock strategies are utilized by traders to execute trades. Charting software are the primary tools used for these strategies with each trader using different oscillators and indictors depending on his preferences. Moving averages overlaid on top of their charting software is a popular tactic employed by swing traders. Each trader using moving averages has his on favorite time frame such the 18 day moving average and the 9 day moving average. When these two lines intersect and crossover, odds are favorable for a trade to be initiated.
Some swing traders rely only on areas of strong support and resistance. For example, a stock my be in a downward trend heading to an area where it been previously, maybe even numerous times. If the stock has been to this area and shown a prior history of bouncing and changing direction upwards each time, odds are excellent history will repeat itself and the stock will bounce again. The savvy swing trader has studied the stock chart and will most likely be ready to enter a long position once the stock reaches the area of strong support.
Conversely, if a stock is headed upwards and approaching an area of strong resistance as revealed by the prior history on the chart, the swing trader will be ready to intiate a short trade once the stock reaches the area of strong resistance, riding the pull back until the stock shows signs of bouncing and resuming the former trend. Using a support and resistance methodology to swing trade is a powerful strategy when utilized with properly and is very popular among swing traders.
If you want to trade the financial markets, swing trading stock strategies are a powerful tactic if you don’t have the time to be active in the market each day. This style is perfect for busy people with limited available time. By sitting aside a few hours, for example, on Sunday to study charts, the trader can build a list of stocks that have potential. Once the stock list is built of possible candidates, alerts can be set to inform the trader when they are approaching areas of possible trade set-ups. Once these areas are reached, a position can be entered and monitored each night after returning home from work. Automatic trades can be entered into trading software to exit the position once the stock reaches your goal. The position is closed and the swing trader takes home the profit a few days or weeks later, whatever the case may be. Swing trading stock strategies lend themselves very well to this type trading style.
