What is Swing Trading?

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Swing trading is a speculative trading strategy in financial markets where a tradable asset is held for between one and several days in an effort to profit from price changes or ‘swings’. A swing trading position is typically held longer than a day trading position, but shorter than buy and hold investment strategies that can be held for months or years.

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Profits can be sought by either buying an asset or short selling Momentum signals (e.g., 52-week high/low) have been shown to be used by financial analysts in their buy and sell recommendations that can be applied in swing trading.

 

Risk involvement: Risks in swing trading are commensurate with market speculation in general. Risk of loss in swing trading typically increases in a trading range, or sideways price movement, as compared to a bull market or bear market that is clearly moving in a specific direction.