Disclaimer: The views on the posts and charts are for educational and illustration purpose only, as past performance is not necessarily indicative of future performance. They are provided for general information only and therefore should not be taken as any offer or solicitation to do any investment or trade.
Note: Non-Members are strongly recommended to sign up for the online free course to have a better understanding of the setups as discussed below:
Are You A Swing Trader In Price Action Trading?
What is Swing Trading
Swing Trading is a short term trading method where the traders hold positions on stocks lasting 2 to 5 days or sometimes 2 weeks in the attempts to profit from the swings in the market. It is different from Day Trading where positions are opened and closed within the same day and Position Trading where positions are held over a few weeks to several months.
The goal of swing trading is to gain from the short but powerful momentum in the swing on the long side (buy) and short side (sell) of the market. To get a trading edge over other traders who may not know what to look for, swing traders also use tools like a price action trading system to help them make trading decisions. With a glance, they can quickly see if the bull or bear has won the battle and join the winning side.
There are advantages of Swing Trading:
Flexibility to improve Investment Return
Many of us has a full time job and cannot afford much time to trade on a consistent daily basics. In Swing Trading, you can continue to focus on to your job and trade to improve your investment return on your capital. What you need is to spend 30 mins to 1 hour to study your price action trading charts when you get home from work and enter your trades in the evening or the next working day.
Although you cannot monitor your trades , you can enter your stop loss orders to protect your capital or limit order for the price to hit your target and take profit. During the day in your lunch or tea break, you can spend 5 – 10 mins to check how are your stocks doing.
Less stress with lesser time
Compared to day trading, swing trading is less stressful as you do not have to monitor price movement every minute or 5 minute. You don’t have to be in front of the monitor or mobile screen all day to know how your stocks are doing. If you continue to stare at the screen all day, every small price movement in your stock will look more like a big change but in fact, is just noise to be ignored.
Being away from the screen is also good for you as you do not want to risk sabotaging your trading plan. How many times has it happened when you have exited a trade prematurely from your trade plan and the price took off without you on board. This happens because you feel that you need to take action when you are in front of the screen.
Quality over Quantity
As a swing trader, you are trading mostly on the higher time frame charts like the daily closed charts. Because your holding period is longer , you can generate higher potential profit on each single trade. As you employ a Top Down Approach Analysis of your charts from weekly to daily time frame , you are likely to trade less with more quality trades than trade more on noise in the minutes charts. More with less as what is commonly said.
This also helps to preserve your capital so that when the next A grade setup arrives, you have enough capital to take another One Good Trade.
Want to be a Swing Trader?
To be a good swing trader, you need to have a price action trading system and a trading plan. A trading system will guide you on how to enter and exit a trade. A trading system is part of a trading plan which include other important aspects of trading like chart analysis, trade management, risk management and trading psychology.
If you want to learn more about swing trading with a price action trading system and trading plan, check out my Free Price Action Trading course.