What is Swing Trading?
Swing trading is a form of trading in which short term trends are picked to gain from sufficient price movements. Here the positions are held for longer than a day and up to a few days or weeks.
Typically, swing trading involves holding a position either long or short for more than one trading session, but usually not longer than several weeks or a couple of months. This is a general time frame, as some trades may last longer than a couple of months, yet the trader may still consider them swing trades.
Who Practices Swing Trading?
traders looking to capture short term movements and looking to book profit in the range of 1-5% over a week/month are generally Swing traders.
What Are the “Swings” in Swing Trading?
Swing trading tried to identify entry and exit points into security on the basis of its intra-week or intra-month oscillations, between cycles of optimism and pessimism.
Which Types of Securities Are Best-Suited for Swing Trading?
While a swing trader can enjoy success in any number of securities, the best candidates tend to be large-cap stocks, which are among the most actively traded stocks on the major exchanges.
How to use “Cycle” for mastering Swing Trading
Swing traders can efficiently make use of “Cycle” in the following way:
- Shortlist those stocks which have a “BUY” signal in both short term & mid term time frame. This will increase the probability of gains.
- Among the shortlisted stocks, invest in the ones which have a CRS rating of more than 80. This will ensure sufficient positive price movement based upon performance.
- Sell the holdings on realisation of intended profit or when the short term changes to “WAIT”.
Please refer to other “Cycle” tutorials on CRS rating and Reversals to understand more.