What is Swing Trading
Swing trading is a short-term trade which is lasting longer than one day and less than a month. Usually, traders capture one piece of a move, but in swing trading, traders capture an entire leg. Swing trading consists of various forms like Bollinger bands indicator strategy, Fibonacci retracement strategy, simple moving averages indicators strategy. The famous MACD trend-following strategy, which decides whether the move is converging or diverging is also inspired by swing trading strategy. One of the main reasons behind this price action strategy's popularity is, it can achieve reasonable similar returns to day traders in less time. As they don't require to stare at the screen for hours. Swing traders also pay fewer commissions, fees, and their profits are larger per trade.
Swing Trading Strategies for Beginners
For a beginner in Stock Market, you should follow a bull flag and the daily chart. A bull flag is a trend pullback setup. This setup gets its name because when you look at the trend, it looks like a flag. This pattern is not considered as the most exciting trades as they are retracements of the recent swing high and have the best odds of continuation.
There are some most successful bull flag patterns which have similar characteristics as follows. If a stock pulls back in a less aggressive way, its pole' descent upwards. A sharp impulse moves higher on big volume, which forms a flag pole. Some days, traders are flummoxed to choose the blue flag patterns as there are hundreds of them. So, you must follow certain criteria; stocks in leading industries that are also outperforming the rest of the industries. leading stocks of the market like Apple or Microsoft.
There are countless swing trading strategies. Many of the basic, patterns like trend pullbacks and support holding have a positive expectancy. So, a trader needs to be well-versed with a swing trading strategy to acquire maximum returns.