What is Swing Trading

swing trading

The term refers to the various styles of swing trading stock, commodities or index. This trading is a kind of practice where the trader buys or sells the instrument at or close to the end of a down or up price swing in the commodity. This fluctuation is caused either due to daily price volatility or weekly price volatility. Knowledge of these styles helps will help you become a profitable trader and put you on the path of a successful trading profession. There are lots of swing trading strategies out there, but finding profitable ones is even more difficult.

How long do swing traders hold stocks for

The time limit that is usually involved in holding the instrument by the trader is 1-4 days. It is most likely less than a week in any case. The currency or the stock which the trader is dealing in swings from one price level to another. A swing trader rides on this oscillation or swing that the market makes on the stock.

The stock research you will be doing is looking back at past trends allowing you to come up with an informed decision on what to do. That way you can take a calculated risk of how long the trend will last in an uptrend or how short you need to go in a downtrend to maximize your profits.

What programs do swing traders use?

The use of end-of-the-day charts software and the information provided by your broker is also used to make your stock trading decisions. This eliminates the need for a direct-access system, being bound by your stocks and waiting for the end end of the day trading.

How many shares do swing traders trade?

Most swing traders trade in blocks of 1000 shares at a time, but this is more of a guideline than a rule. Besides, these traders will hold only around ten positions at a time. The type of stocks a swing trader will choose for their stock picks is those that can be moved quickly or at least shortly. Below is a list of criteria used by the swing trader to analyze the stocks and decide on the stock pics.

Volume and Liquidity

Wanting stocks that can move quickly, as they work with actively traded and large stocks that are easier to trade.


This is the uptrend and downtrend mentioned previously. Stocks that are following these trend patterns rather than a straight one are what swing traders are looking for.


The volatility of stock shows that it has a lot of movement. This another criterion a swing trader uses because the traders can quickly make a profit with a volatile stock.

Sector Selection

When stocks are in the stable sector, the swing trader finds it more comfortable to trade, but in the weak sector, profits are made by weakening the price.

Tight Spreads

Tight spreads mean small spreads in the bid and the ask of a stock. Swing traders want the smaller spread because they can make more profit from it. With a broader spread, a trader looks to have lower profits. So the tighter the better.

Rounding it all up

When used correctly, swing trading is an excellent strategy used by many traders across different markets. It is not only used in the Forex market but also it is a crucial tool in futures and equity markets. Swing traders take the skills that they learn through technical analysis and can even parlay these skills into various options strategies. The short-term nature of swing trading sets it apart from that of the traditional investor. Investors tend to have a longer-term time horizon and are not traditionally affected by short-term price fluctuations.

As always, one must remember that swing trading is only one strategy and should be utilized only when appropriately understood. Like any trading strategies swing trading can be risky and conservative strategies can turn into day trading strategies quite quickly. If you plan to employ a swing trading strategy, ensure that you fully understand the risks and develop a strategy that will be able to allow you to generate maximum percentage returns on your positions.

What Is Daytrading

The basic definition of day trading is the buying and selling financial instruments in the market on the same day. Therefore, daily traders never hold it for long periods of time. Most of the day trading financial instruments include stock options, currencies futures contracts and also stocks. Many day traders are banks or financial investment firms. However, due to the increasing modern technology that has allowed the introduction of electronic and margin trading, more home traders have become popular in day trading.

So how do I start day trading?

There are a number of ways that day trading can be done, some of these styles that are used include scalping. This is a technique where the bob has to hold a certain position for a few minutes. Shaving is another method that makes it possible for the trader to jump ahead of the other by a tenth of a cent. A buy and sell order is usually completed in less than one single second. This makes the bids higher and makes the bidder to be the first one to purchase the intended stock. This usually makes it possible to earn a large amount of profit, especially when dealing with high priced shares.

You have to find stocks that are ready to pop

A day trader usually uses most of his time looking for more financial instruments that will earn him more profits. They look for stocks that are mostly in a state of tension and are ready to accelerate in price at any moment. The key factor to consider when day trading is the fact that there is no maximum number of trades to be done in a day; a trader can do as many as they want. In this regard, it is also necessary to note that there are just as many losses to be made in the trades as there are profits. Thus when executing the trade, it is much better to have an open mind since there is no guarantee of either a profit or a loss.

How long do day traders hold stocks for?

It is possible for a day trader to do a very short-term trade that can only last for minutes. This makes it feasible for traders to buy and sell the financial instruments many times in one particular trading day. In this regard, the day traders receive discounted prices from their trading brokers for having a large trading volume. Different traders focus on different things, some of them being the price momentum, technical patterns and even the many unlimited numbers of strategies that can be used to make even more profit.

Day traders never hold on to stocks overnight

Since there is an excessive number of dangers related to day trading, most of the day traders prefer selling their shares before the closing of the market. This is because they do not want to experience excessive risks that are associated with the aftermarket, which may tend to be unmanageable at times. However, other traders feel like they should let the profit run, therefore, it is acceptable to continue staying in a certain position even if the market closes.

You also need to start learning about stock trends before you begin day trading. Some people can afford to just jump into the game and risk losing everything, but not everyone can do that. If you don’t have the capital to learn from your losses, you need to do some scouting and start looking into stock trends. This will help guide your first trades, so you have a higher chance of being successful.

Day trading poses excessive risk

If you do not recognize the inherent risk that stock trading in any form presents, you are likely to come out disappointed in the end. There is no way to take the risk out of this type of business, but go about it the right way and use your brain every step of the way, you are likely to find some success. Just use some caution because every year people go into day trading with high hopes of becoming rich, and very few actually make that into their reality. Do your research and make smart decisions in the beginning and chances are you can be quite successful.

Make Money Trading Stocks

trading stocks

There is a lot of money to be made in the stock market especially when it is at a low. If you look throughout history you will see that the market always goes up over time. Knowing which stocks to pick is very important for you to make money. You need the knowledge to choose stocks that will yield you a profit over time. There is many publications available to you, and it is highly recommended that you subscribe to some of them. You can view our article on top screeners if you’d like. They will help you to understand how the stock market works and what is the best method for picking great stocks.

You need to educate yourself before jumping into something, and when it comes to the stock market, this is never truer. If you are trying to become a day trader, it is crucial that you speak with somebody who is already doing this so you understand precisely how to make money. Some people think they already know what to do and they can lose everything they have quickly. Making money trading takes time, and you need to know what you are doing so that you can make enormous profits.

Use these key day trading secrets to increase your income potential

When starting out it is important you make use of every resource possible. Many companies run free seminars, webinars and tutorials – take advantage of these and attend every one you can – no knowledge is wasted. Every broker under the sun also provides some form of virtual account which allows you to trade without the pain – and the pleasure- of a change in your real balance. Use these types of play money accounts until you have established a trading system that works for you, and more importantly you understand. In my mind you pay for learning in one of three ways – you pay in time lost, you pay in money lost, or you spend money to acquire. Often the most expensive learning now – from an expert – often proves to be the best value long-term.

Research the market before starting

Be prepared ahead of time. You should be ready to go before making your first transaction. You won’t need to drop hours and hours doing this. However, you should have a few key sites you visit, and it’s a good idea to monitor a couple of companies closely. Always having a strong overview of the stock market, including any public shares, prepares you to make sound financial decisions.

Find shares with a little bit of volatility

Don’t spend your valuable time on companies with hardly any volatility. Frequently changing share prices are crucial for day trading. You are unloading stocks every day, so you need to be involved with stocks that have daily price variations. Improve your mathematical analysis skills. You need to be capable of analyzing financial numbers at a glance. You don’t need to be a master mathematician, but you must interpret what the financial data mean to make fast, dead-on assessments.

You need to have patience, and lots of it

Learn how to have lots of patience. The people who generate the most income can maintain their emotions at any point in time. You need to keep a clear mind at all times.

If you use these insider day trading tips, you could be set to make outstanding income by day trading. You can make a lot of money in the markets and with a little work, you can be benefiting from this exciting opportunity.

Using options can be a viable strategy

Now, start making money trading stocks using options contracts. One of the more popular ways to continue making money trading stocks over the last decade has been to use call and put options to increase buying power. The leverage created by controlling (rather than owning) shares allowed smaller amounts of capital to reap more substantial and more massive rewards.

Automate your trading

Finally, make money while you sleep. Automated trading systems allow investors to trade automatically. They have long been used by large banks and investment firms to create a continuous profit without the need for trading expertise. The strategy, usually devised by an ex-trader with years of experience, is coded into a computer program which can then be just set up to run and left. This allows you to make money while you sleep. Such trading systems are usually designed to make small profits on a large number of trades.

Rounding it all out

In conclusion, there are a couple of existing plans out there that you may be able to use. The best methods however are always those that are custom created. A personal blueprint that you’ve created yourself is the best to use because it fits your personality and style as a trader. You never have to force yourself to accept the terms and perspective of some other system creator.