Swing Trading

Swing trading is a trading strategy that seeks to capture short- to medium-term gains in a stock or other financial instruments over a few days to several weeks. Swing traders use technical analysis, chart patterns, and momentum indicators to identify potential price movements, entering trades at the beginning of a trend and exiting before it reverses. The goal is to profit from short-term price swings rather than long-term growth.

Example

A swing trader might buy a stock that has shown strong upward momentum and sell it after a few days when technical indicators suggest that the price may soon peak.

Key points

• A strategy focused on capturing short- to medium-term price swings.

• Typically holds positions for days to weeks.

• Relies on technical analysis, momentum indicators, and chart patterns.

Quick Answers to Curious Questions

How does swing trading differ from day trading and long-term investing?

Swing trading holds positions for several days to weeks, while day trading closes all positions within the same day and long-term investing holds for months or years.