April 2022
Alright, so swing trading may not have explosions, car chases, or epic fight scenes, but the excitement is real. As a trader who’s been living in this space for a while, I can tell you firsthand that there’s nothing quite like buying a stock, watching it steadily climb, and then timing your exit to cash in. Just rinse and repeat until millionaire, amiright.
What makes swing trading appealing is that it doesn’t require you to sit in front of a screen all day like a day trader, constantly monitoring the stock price and wondering if you should sell now. It also doesn’t require the patience of long-term investing, which takes months and years.
You can take advantage of price “swings” over a few days or weeks, keeping your focus on broader trends rather than the minute-to-minute changes. This approach allows for strategic decision-making without the stress of tracking every tick. It’s about recognizing patterns and setting up trades based on where you believe the stock is headed in the near term.
Swing trading relies heavily on technical analysis, a tool that’s been invaluable for me. By looking at past price movements, you can get a sense of what might happen next. You’re looking for price “swings” that occur over several days or weeks. It’s not a crystal ball, but it helps you make informed decisions about where the stock is likely headed.
Focus on the key price patterns, weighing risk, and then make a decision based on the data. No need for endless analysis. By focusing on price movements over a few days or weeks, you can stay engaged without burning yourself out, which is easy when youre deep in data charts and measurements.
Another important aspect is that it’s not about figuring out why prices move. Instead, you focus on what the price is doing. If the price is moving up, there’s more demand. If it’s moving down, there’s more supply. This way you can avoid overcomplicating things and stay focused on the task at hand—trading.
Like any trading strategy, swing trading is all about balancing risk and reward. Before I enter a trade, I always consider the potential upside against the risks and hopefully you are too.