Can I be successful with swing trading?

Trading is something, which can be associated with a person’s temperament and lifestyle or approach, and one’s strategy may not be suitable for other strategies to a particular situation. The most critical point is finding the right strategy that may suit you and reap profits. Trading always carries risk but Risk also comes with a reward.

Swing trading is a short-term approach suggesting a future price movement based on technical indicators as well as fundamental analysis. Swing trading unlike intraday trading is in the range of medium-term trades, varying from days to weeks between positions. Traders heavily rely on technical indicators as a tool tracking financial instrument and a swing are likely to occur in the pattern. Timely entry and exit in the market can scoop up fast gains and set up other trades in the process. However, it exposes risks also mainly due to greater market volatility which may take place within a larger trend. An analysis made by the swing trader is well-researched using fundamental analysis or technical analysis. A good advantage is that you don’t need to make an eye on the market paying minute details of every movement in the market. The idea is not to create large returns in a shorter span but batches of short-term gains, which in turn can compound into excellent annual returns, and thus time factor plays an important role.

Market Trend is categorized into three categories Primary, Intermediate & the Minor trend. A swing trader tries to find momentum in the stock price for a minor trend.

Common indicators used by swing traders are RSI, Moving averages, Lines of support &resistance, etc. Swing trading does not guarantee you successful trading. A swing trader can be called a part-time trader or a passive trader.

It is difficult to time the market and tricky to make the right strategy. The biggest disadvantage is that if prices keep moving in one direction, there is no swing to trade especially during stronger trends. A simple explanation can be made by the assumption that the market moves with minor oscillations, trader needs to find swing points where a market changes its direction and thus entering and exiting their positions.

It is all about making an accurate assumption and making strategies based on your understanding and calculations. If you make an inaccurate assumption, you lose money and vice versa. You should know what to buy, when to buy and when to sell and thus making your strategies effectively. You should not be greedy and book your profits before market direction reverse and wipe out your profits.