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What are the Fundamentals of Swing Trading and how is it Beneficial?

  • April 2014
  • Posted By Ninoslav

Swing Trading is a trading type in which you have to hold your position for a certain short period depending upon the swing of the market. An upward swing may well call for holding your position for a bit too long until it starts to slide down. Whereas a downward swing may well call for an immediate sell-off before losing too much.

Usually the period of holding ones’ position in this type of trade is one to many days. This is so because of the fluctuating nature of the market. If you don’t act fast, you may well lose to a large extent. But on the other hand, hasting your decision also may lead to missing out on profits. So, what should you do so to avoid such a situation?

Would adopting algorithmic trading methods work?
Many people generally like to trade by following a certain pattern which have earned them profits over a period of time. Every individual has an algorithm or a mathematical calculation of their own about the entry and exit points of a trade. And what would be those in this case?

A very simple one – hold your position till when the odds are in favor of you and show an upward trend. Similarly, let go off your holdings when there is an indication of a downward movement. That can depend on the basis of a day to a week or more – but the shorter the better.

And what about the risks involved? If you base your judgment on analysis rather than speculation, you can hope to be successful more often. That concludes a brief discussion on Swing Trading. “What are the prospects to be had from Daily Trading” could be next read if you are seeking an even shorter trading window for yourself.


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