Candlestick Trading Blog
July 22, 2008
Swing Trading Stocks
Swing trading stocks is another from of short-term trading similar to that of day trading. Swing traders hold onto stock for a short period of time such as one to five days, or weeks instead of daily. They use intraday and daily stockcharts to predict how their stock might move and they look to make larger profits than with day trading. Of course while there is potential to make more profit, it contains higher risk. This is due to the fact that when you make fewer trades, as in swing trading, you attempt to reach higher profits per trade, therefore adding additional risk. There are also risks associated with market exposure since holding onto stock for longer periods of time makes your trades more susceptible to market fluctuations. This technique of trading requires a lot of time on the investors part. He or she will have to research stocks for several hours each day in order yield the high returns sought after when swing trading stocks. Throughout the years online trading has become more popular with the advent of the internet. There are many tools, resources and investment strategies available to the investor when swing trading stocks. For instance, online discount brokers are now offering trading accounts with very low commissions. This allows investors to trade a variety of ways. Also online trading platforms have become extremely sophisticated offering various analysis tools Trading strategies and systems are also available online offering both short and long-term investment strategies. It really is amazing what the internet now offers to the individual investor, which otherwise was only available to large companies and to the wealthy. Swing trading stocks relies upon the natural tendency of the stock market to ebb and flow. Stock prices do not move in straight lines and therefore must be monitored on stock charts. Stocks move up in price, then fall back and sometimes push to new highs! Most swing trading systems available to investors will incorporate both the bearish and bullish outlook, which then allows the trader to diversify their trades for changing market conditions. This strategy helps to protect the investor’s stock portfolio against losses due to changes in the overall market trends. It is important to note that swing traders incur less commission charges than other types of short-term traders since they are trading less regularly. A swing trader will look for short-term opportunities in the market to get short at a relative high, or to go long at a relative low. The expectation is that they will close their position on one to several days but they avoid holding an open position more than one or two weeks. A wise trader will utilize stop loss orders to prevent any one trade from creating a sizable account loss when swing trading stocks. Luckily there are sophisticated stock market trading systems these days that can establish a pre-defined profit stop! Continue to research trading strategies and swing trading techniques in order to successfully trade in the stock market. Knowledge, practice, and focus are the keys to successful trading! Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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