Learn Swing Trading: It’s A Well-Liked Style of Trading

Firstly We Speak About What’s Swing Trading

Swing Trading May Be a Kind of Trading Style That Sets Out to Profit from Medium-Term Price Swings Rather Than Intraday Price Moves or Long-Term Trends. As You Already Know, The Worth Moves in Waves, With Up and Down Swings, Regardless of The Overall Direction of The Trend — Upwards, Downwards, Or Sideways. With Swing Trading, You Aim to Trade Those Up and Down Price Swings Daily. The Swings on The Daily Timeframe Tend to Last from Some Days To A Few Weeks; On Some Occasions, They Will Last Up to Several Weeks.

The Essence of Swing Trading Is to Take Advantage of Individual Price Swings, One Swing at A Time, Instead of Riding the Long-Term Trend with Multiple Impulse and Pullback Swings. While It's Possible to Trade Both the Up and Down Price Swings, Especially During a Ranging Market, It’s Better to Keep Only Buying into The Upswings Because the Price of a Stock Has Limited Downward Potential But Unlimited Upward Potential. Swing Traders Mostly Base Their Trading Decisions on Technical Analysis, With Little or No Input from Fundamental Analysis. They Often Use Chart Analysis to Predict Where One Swing Might End and Begin the Opposite Swing So That They Try to Enter at The Beginning of a New Swing And Hop Out Before The Opposite Swing Begins.

Now We Speak About Some Pros of Swing Trading

The Time Commitment Isn't Much

While Swing Trading Will Keep You Busier Than Long-Term Investing, Compared to Day Trading, Swing Trading Requires Less Time Commitment. In Swing Trading, You Are Doing Your Technical Analysis on Mostly the Daily Timeframe, Except When a Trading Setup Is Forming and You Would Like to Step Down to the 4-Hourly Timeframe to Pick a Better Entry Price.

So, Unlike In Day Trading Where You Get To Observe Your Price Chart All The Long To Analyse Those Data That Are Printed Every 15 Minutes Or 30 Minutes, Counting On Your Timeframe, You Spend Only Some Minutes At The End Of The Trading Day For Your Analysis.

You Can Trade Part Time

Owing To The Nature of Swing Trading And The Fact That It Doesn’t Take Much Time, You’ll Combine It With A 9-5 Job Or Any Business That Can Generate Constant Cash Flow For You. The Good Thing Is That the Cash Flow Will Help Your Trading Psychology In No Small Measure.  Once You Know That Your Basic Needs Are Taken Care of And You Can Pay Your Bills, You’ll Trade with Much Calmness, Without Being in A Haste to Make Money.

Swing Trading Is Often Very Profitable

With An Honest Strategy and Proper Risk Management, Swing Trading Is Often Very Profitable Without Any Stress. You'll Expect to Make Reasonably Good Returns from Swing Trading If You Consistently Implement Your Strategy. On Average, You'll Make Between 10-50% Per Annum from Swing Trading, Which Is Best Than the Broad Market Return Per Annum. But You Want to Have the Mental Skills to Stay Consistent.

It Doesn't Tie Down Your Capital for A Long

With Swing Trading, You Don’t Get to Possess Your Capital Tied Down in A Bad Stock for A Long Time, Unlike What Happens in Long-Term Trading. If A Trade Isn't Working Fine, You’re Taking a Small Loss and Moving the Funds to Another Stock That Shows a Trade Setup. In Other Words, Swing Trading Gives You Greater Flexibility in Managing Your Funds So That, At Every Point in Time, Your Funds Are Working Hard to Form Money for You.

Why You'll Use ETFs For Swing Trading?

To Long-Term Investors, ETFs Are Instruments That Provide Them with An Inherently Diversified Portfolio, Help Them to Avoid Short-Term Capital Gains Taxes, And For A Few Innovative ETFs, Offer Them Inherent Leverage. However, ETFs Have Several Qualities That Make Them Ideal for Swing Trading, And They Include the Following:

Multiple Options Available: There Are Many ETFs That Short-Term Traders Can Choose Between. On The U.S. Stock Exchanges Alone, There Are Nearly 2,177 ETF Products Available for Trading, So You've Got Multiple Options to Choose From.  You'll Use the Available Stock Screening Tools to Select the Ones You Want to Trade.

Transparency: Many ETFs Are Designed to Trace Broad Market or Sector Indexes, And Index-Based ETFs Are Required to Publish Their Holdings Daily. Moreover, You’ll See the Objective Of Any ETF To Know If It Is Suitable For Short-Term Trading, Given The Prevailing Market And Economic Conditions.

Highly Marketable: ETFs Are Easy to Trade Since They're Traded on An Exchange.  You'll Easily Buy and Sell at Any Time of The Day, Unlike Most Mutual Funds That Trade at The Top of The Trading Day.

Going On the Short Side of The Market: Some Innovative ETFs, Just Like the Inverse Ones, Provide You With The Opportunity to Take the Short Side of The Index They Are Tracking. Thus, Trading ETFs Affords You the Choice of Taking Either Side of The Market Without Having a Margin Account.

Liquidity: Many ETFs Are Highly Capitalized and Have Enormous Liquidity.  You'll Always Have the Market to Buy or Sell Them Whenever You Want.

Optimal Volatility: Being A Portfolio of Many Stocks or Other Instruments, ETFs Don’t Have Extreme Volatility That Creates Trading Difficulties. But At the Identical Time, A Number of Them Do Have Adequate Volatility to Make Short-Term Speculations, Like Swing Trading, Worthwhile.

Inherent Leverage: Some ETFs Are Leveraged on Their Own. There Are Many 3x-Leveraged ETFs That Provide 3 Times the Returns of The Index They Are Tracking.

Low Trading Cost:  The Value of Trading Most ETFs Is Quite Small, Especially in Comparison with Mutual Funds. Some Online Discount Brokers Offer Commission-Free ETF Trading, So Buying and Selling During A Space Of Some Weeks Can Be Quite Profitable.