Swing Trading - set-up

Swing Trading

Swing trading is the process of holding onto a stock for a very short period of time. A Swing trader studies stock prices and identifies cycles or swings in prices. A cycle could span multiple days, weeks or even months. But, a swing trader does not hold stocks for the long term.

A Swing Trader uses Technical Analysis only to select stocks to buy. Identifying patterns or cycles that a stock moves in requires analysis of the stock’s price over time. Once a stock price is analyzed you will notice that price is not random, price anticipates fundamental change and that the relationship between price and time is linear.

Range bound, channeling, cycling or price patterns are all terms that describe stocks that are moving sideways.

There are countless patterns & cycles that constitutes a great rise or dip in the markets. Most people don’t know this but the markets tend to follow patterns & I’m not just talking about your fifty or two hundred day moving averages. There are several patterns that happen either on a daily basis or every few days.

The best way to swing trade while stock trading is to find a trend that suits you & stick to it. So in a bull market or bear market, stocks will be carried by the momentum for long periods but in one direction, this will suit some swing traders as they will not have too much to think about, there’s enough pressure on the trader so the less complicated the better. These traders will follow the momentum & take advantage of the longer term up & down trends.

So what’s the best position to be in when swing trading? The best market for a swing trader would have to be a market that not really moving at all. In this market there are many fluctuations on a daily basis but the market will never really move up or down significantly. This is a great environment for swing trading as the trader is best positioned to capture the rise & declining patterns on a daily basis.

By doing this the trader has many opportunities to capture patterns that will repeat again & again. Many traders will stick to the same stock trading it over & over again for months on end, usually the stock will be the same price it was when they started trading it but they will have made a lot of money from the many up & down patterns. Always use a technical analysis chart like Bollinger bands to figure out which way a trade may be heading.

So’ is swing trading for everyone? Not really. A swing trader should be well versed in swing trading before taking part & should not be trading with scared money i.e. They should have enough to cover themselves in case of loss & be willing to trade again soon after. There’s no time for second guessing while swing trading.

You either have a strict plan for yourself that you’ll stick to no matter what happens or you shouldn’t bother with swing trading. You should be willing to dump stock the moment it hits its upper band or crosses over the lower band. Overall, trend following is probably the best way for novice traders to make money, all you need to do is find a good stock that follows the same trend month after month & take advantage of it.

Where would I get more information about Swing trading?. Here we list the most comprehensive & important sites on Swing trading. So, can you improve your swing trading results by using the information here?, the short answer is Yes. Take a look at the following sites below & try to get a handle on how swing trading software really works & how you can make a lot of money in a short period of time.

Mr Swing - Without a doubt one of the best Swing Trading sites on the net today. This site has a a lot of emphasis on trading stocks on a strong up trend. The "master plan" is a brilliant book for swing trading, it explains everything including entry, protective stops & profit taking.

Trading Markets- Another great site for swing trading as well as lots of other information on how to trade the markets. You can start now by signing up for the free seven day trial.

Trading Tutor - Primarily based on the Fibonacci trading method, this site offers a weekly free newsletter once signed up. There is also a wealth of information on other trading methods in this free news letter.

FibTimer - Again another great site that also includes a free biweekly news letter. The information here is definitely for you if you need the real ins & outs of swing trading & how you can make it work for you.