Economics, Risk Management, Tips, Trading Education

Why swing trading may be for you

Technical analysis tips

The everyday life of the average day-trader is not many can stomach. It is like living life on the edge. While some have reached great heights, many have slipped and failed. Day trading can be emotionally taxing because it is inevitable that you will have a significant loss on your investment portfolio at some point. No matter how intelligent some people are, the stress associated with day trading can become perilous, especially when trading without a setup, a strategy, or purely on emotion. This article will analyze the swing trade strategy, and discuss why swing trading may be for you.

Tired of sitting from open to close

One of the advantages of swing trading in contrast with day trading is the time commitment. From personal experience, it is draining to dedicate your entire day to trading stocks and searching for potential opportunities. One aspect I personally enjoy about swing trading is that you can simply wake up early in the morning, make entries at the beginning of the day, conduct fundamental analysis, and monitor your entries for the rest of the day. With this strategy, you could make the same money as day trading, but with less effort. 

For beginner traders, generally, it is advised to start with swing trading. Many competitive day traders utilize cutting-edge technology that is very expensive and complex to understand. In contrast, swing traders can simply utilize free computer software and learn to trade from their desktop computers. Though you may be exposed to overnight risks such as gaps and short positions, swing trading can offer a calm and less demanding working environment 


By utilizing optimal trading strategies and properly managing risk, swing trading can be a profitable and stress-free occupation. What many do not understand, however, is that apart from micro-small cap highflyer stocks that double in a day, big moves in the U.S. stock market can take months to play out, and this was one of the main reasons many gravitate towards swing trading Though. traders can earn consistent profits year over year utilizing the same setup, Manny traders have struggled with scaling their accounts and setups. If you can effectively scale your swing trade strategy, you can expect to make a substantial return in a bull market.When scaling your investment portfolio, your objective should be to proportionally increase a small percentage of winning trades. With this in mind, it can be useful to focus on a small number of stocks that back up good fundamentals and give you a reliable edge. 

Building the winning setup

An optimal setup will enable you to make better-informed and strategic decisions that can reduce your anxiety and produce great results when executed correctly. When building a winning setup, It is very important to understand how a reliable setup looks and operates. When using a swing trading strategy, you can combine technical and fundamental analysis to discover similarities by recognizing trading patterns traced back the last 100 years. One setup that is highly regarded is breakout setups and any variation of these types of setups. In an ideal scenario for the breakout strategy to be effective, you mainly want to see big relative momentum.

The Breakout strategy

The breakout trading strategy is commonly used among many traders with varying inexperience. Breakout trading can be observed as entering the market when the price moves to a new price range accompanied by a substantial trading capacity. You can find success with this strategy by purchasing an opening range high following a breakout at market open, using the 1st-minute candle, the 5th-minute candle, and the 60th-minute candle as a reference, and using the low for the day as his stop. If a stock breaks the first 1st-minute opening range high, but it doesn’t break out, it is monitored at the 5th-minute candle to see if a breakout will occur. A breakout must be obvious. If a stock is in range and it goes up a few percentage points in the first minutes of the market open, there is a likelihood that it could drop if it has not breached a new high on its breakout attempt. While this strategy has great potential there are some drawbacks that should be noted. There is a possibility that if you purchase a stock at a breakout range high, you may get stopped out on the same day. While the pros of using the 1st-minute highs are you can get in earlier, the cons are a higher failure rate. If you are a homerun trader this strategy is effective for you, as you will catch big wins at a high payoff but maintain a low win rate.

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