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What is Swing Trading? | Swing Trading Basics | Swing Trading Strategies – Financial Matters

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What is Swing Trading?

Swing Trading is a technique that spotlights on taking Small gains in a shorter time span and taking stop loss quickly if the trade is not in favor. The profits may be less, but when we do this on a consistent basis it will give a good return at the year-end. In this strategy positions are normally held a couple of days to two or three weeks, however can be held longer.

Swing Trading Basics

How about we start with the basic of a swing trading system. Instead of focusing on 20% to 25% benefits on a single stock, its objective is more advance, we focus on 3%  to  5 % within 5-7 days, even in a choppy market.

Those sorts of profits probably won’t appear to be the ground breaking prizes in the stock market, but after a span time it accumulates to a handsome amount.

The swing trader’s focus isn’t on gains developing over weeks or months; the average length of a trade is more like 5 to 10 days. In this way, you can make a lot of small wins, which will add up to big overall returns. If you are happy with a 20% gain over a month or more, 5% to 10% gains every week or two can add up to significant profits.

Swing Trading Strategies

The swing trader never focuses on holding stocks for weeks or months for a big gain, they only deal in a maximum of 7 to 10 days holding pattern. By doing this they earn a lot of small gains, which will gradually convert in a huge amount latterly. I personally recommend Swing Trading over Positional, as I believe in small profits in a less time frame rather wait for a longer time.

Of course, there are chances to make losses, we in swing trading strategy focus on small losses also. if you keep your losses small then only you can multiply your fund by small gains. Rather than the normal 7% to 8% stop loss, take losses quicker at a maximum of 2% to 3%. You should keep 3:1 ration in Profit: Loss, this is the best Portfolio Management. And this is the only rule for successful trading.

Many times it delivers larger gains on individual trades. A stock may go in the strong bullish zone after breaking a certain level and which may convert into a huge profit, at this stage, I personally recommend you to trail your stop-loss order, that means you should modify your loss cutting bid to your cost price.   For Daily update on Swing trading Stock tips for free stay tuned to Financialmatters.in

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