What is swing trading? how to make it? If you also want to know this. So today we will try to give you as much information as possible about swing trading in this article. Today if you also want to do part time trading then swing trading can be a good option for you.
Small profits earned in this gives you a good return at the end of the year. Let us first know what is swing trading?
What is swing trading?
Swing Trading is one such trading strategy. Where traders buy shares for more than a day and sell them after holding for a short period. Traders hold the stock for a few days with the hope that they can make some profit. Usually this time can be a few days or a few weeks.
Swing traders try to capture a portion of the potential swing of any stock. This means that a swing trader tries to capture the one-way movement of the market or the price of any stock. Tries to capture the one-way movement of the market or stock with the expectation that it will make a profit of some percentage. But if the market goes exactly the opposite, swing traders exit the market after booking their losses. The profit of small movements achieved in swing trading becomes a decent return in the year.
A good swing trader uses technical analysis and sometimes fundamental analysis to find the opportunity. Also analyzes market trends and patterns through charts.
How does swing trading work?
Swing Trader analyzes the market trend, stock price fluctuations, patterns formed in the trading chart before buying any stock. Usually swing traders analyze on large-cap stocks ie those stocks in which trading is high.
There is more risk in swing trading than in other types of trading. This usually involves gap risk. If there is any good news after the close of the market, then the price of the stock suddenly increases after the market opens. Exactly the opposite can happen. Bad news comes after the market closes. So after the market opens, there is a huge gap down in the price of the stock. This type of risk is called overnight risk.
What are the advantages of swing trading? –
Like other trading types, swing trading also has some advantages and disadvantages. Let us first know the advantages of swing trading.
1. In swing trading, the stock is held for a few days or a few weeks. Therefore, there is no need to stay longer in the live market as compared to intraday.
2. Swing Trading gives a good return to the traders on the sideways of the market.
3. Swing trading is best for those people who do job or business. That is, swing trading can be done part time.
4. The stress level is lower in swing trading as compared to intraday.
5. Small returns in swing trading turn out to be a good annual return.
6. Swing trading is easier than intraday. You should only know technical analysis.
7. Swing trading has less noise than day trading.
What are the disadvantages of swing trading? –
1. Swing trading involves overnight and weekend risk.
2. If the trend of the market suddenly changes in some way, then there can be a lot of loss here.
3. Swing trading involves gap risk.
4. Returns are less in swing trading as compared to day trading.
What is a swing trading strategy? –
Till now you have studied swing trading closely. Now we will show you how to do swing trading, which strategy you can learn to do it. I will give information about this. Then let’s find out.
Traders use a variety of indicators and chart patterns to create strategies for swing trading. Some of the popular chart patterns and indicators are listed below.
Chart Patterns
- Head & Shoulder Patterns
- Cup & Handle Patterns
- Candlestick Patterns
- Triangle Patterns
- Double Top & Double Bottom Patterns
- Flag Patterns
- Triple Top & Triple Bottom Patterns
Indicators
- Simple Moving Average
- Exponential Moving Average
- Bollinger Band
- RSI (Relative Strength Index)
- MACD (Moving Average Convergence Divergence)
- Moving Average Crossover
- Pivot Support & Resistance
- Fibonacci Retracement
- VWAP (Volume Weighted Average Price)
- Stochastics
- SuperTrend
What are the benefits of using Swing Trading Strategy?
- There is a possibility of making more profit or loss in swing trading.
- This strategy keeps swing traders away from intraday volatility.
- The swing trading strategy focuses the traders on moving trades.
- The trading strategy tries to tell you the right time to enter the market and square off the position.
- Being technical based, you can take clear decisions.
Conclusion
Swing traders use different strategies in the market. All these mentioned chart patterns and indicators will help you to create your own strategy as well. If you want, you can make a strong strategy by combining two or more indicators. Lastly, remember that no strategy can give you 100% accurate results. This post written by me is just for you Swing trading kya hai? An attempt has been made to give detailed information about I hope this post has been able to give you some information.