What is Swing Trading ?

• Swing Trading takes advantage of brief price swings in strongly trending stocks to ride the momentum in the direction of the trend.
• Swing trading combines the best of two worlds — the slower pace of investing and the increased potential gains of day trading.
• Swing traders hold stocks for days or weeks playing the general upward or downward trends.
• Swing Trading is not high-speed day trading. Some people call it momentum investing, because you only hold positions that are making major moves.
• By rolling your money over rapidly through short term gains you can quickly build up your equity.
• Q.How does Swing Trading work?
• A.The basic strategy of Swing Trading is to jump into a strongly trending stock after its period of consolidation or correction is complete.
• Strongly trending stocks often make a quick move after completing its correction which one can profit from.
• One then sells the stock after 2 to 7 days for a 5-25% move. This process can be repeated over and over again. One can also play the short side by shorting stocks that fall through support levels.
• In brief a Swing Trader’s goal is to make money by capturing the quick moves that stocks make in their life span, and at the same time controlling their risk by proper money management techniques.