Swing Trading

Learning about Swing Trading grabs the interest of many people, and for good reason. There's the lure of steady profits, not having to stare at a computer screen all day, and not getting worn out from over trading, among other things.

While all of these sound nice, the reality is that this type of trading has it's pro's and con's just like anything else that seems to good to be true. Don't jump right in and start Swing Trading without finding out what you're getting into and what it takes to increase your chances of being successful.

When making an initial comparison to Scalping- in which traders make several to many trades each day often getting out of trades within seconds, and Day Trading- in which traders make one to several trades each day primarily holding positions for several minutes to several hours at a time, Swing Trading has a nice attraction. This type of trading primarily involves entering positions with the intention of holding each position for several days or weeks at a time and requires less staring at a computer screen anxiously awaiting the next tick in a stock price.

Note: since this artilce was written, I have added an additional introductory page comparing the various types of stock trading here: Swing Trading Stocks.

This type of trading is much better suited for someone who is available to perform research and analysis in the evening hours and has a regular career during the day. That's not to say that you cannot make a living though. There are people who have a successful trading plan and swing trade as their main source of income. It's just like any other type of trading, it takes hard work and there are no guarantees that you will be profitable at the end of the year.

Typically a Swing Trader will have several stocks or ETF's that they watch on a regular basis and they use some type, or types of Technical Analysis to determine entry and exit points. Analyzing and determining trends, support & resistance levels, reversals and pullbacks are major components of a successful trading strategy. Here's a way to get a trend analysis on stocks or etf's you're following sent to your email address for free: Free Trend Analysis

Let's take a look some possible trading opportunities below:

Swing Trading Stocks

The chart above shows examples of 4 different entry points for long position trading opportunities that occurred over the last three months shown on the chart. This is a great illustration of opportunities to look for and shows that a trending stock will produce several good tradeable entry points. A good lesson here is don't worry about missing a good trade, there will always be more opportunities to come, whether in the same stock or others.

  • Entry point 1 is on a breakout after a higher low was formed on a pullback from the initial breakout off the low. This is a common occurrence that occurs after many lows are formed.
  • Entry point 2 is on a breakout through a previous resistance level. Sometimes this is a point of a reversal, so be careful entering here.
  • Entry point 3 is at a pullback to the 50 day Moving Average which also happens to be the point of previous resistance, which when broken through became a support level.
  • Entry point 4 was another breakout through previous resistance, the same pattern as in entry point 2.

The Technical Indicators shown on the chart are examples of many that are available to choose from. I will be going over different types of Techncial Indicators on separate pages on this website.

Before you enter into a trade like this, be sure to have an exit strategy in place. Here is another page on this website illustrating a possible Swing Trading Stop Loss.

By the way, this stock is for a company that provides government sponsored social services including family counseling, depression counseling, drug and alcohol counseling, criminal counseling and supervison services and various other counseling services. The way the economy has been, it's no wonder that this stock has gone from below $1.50 per share to over $7.00 already this year. Did someone ask which types of stocks do well in a recession?




Return From "Swing Trading" To "Types of Stock Trading"


Elliott Wave Videos

Learn to trade in the direction of the forecasted trend with this free video course. Click here to start watching: Free Elliott Wave Video Lessons

Free Newsletter Updates

Trading Resources

Stock Trading Software
Stock Trading Software
Stock Trend AnalysisStock Trend Analysis