Using an intermediate time frame, usually a few days to a few weeks, swing traders will identify market trends and open positions.
The name swing trading comes from the fact that we are looking for conditions where prices are likely to swing either upwards or downwards.
Swing traders can use a wide array of technical indicators. These indicators are used to find trends that play out between 1 and 30 trading periods. After analyzing these periods, you will be able to determine whether instances of resistance or support have occurred.
The next step is to identify the bearish or bullish trend and look for reversals. Reversals are often referred to as pullbacks or countertrends. Once the counter-trend becomes clear, we can pick our entry point.
The goal is to enter into a position where the countertrend will quickly reverse and prices will swing. 12 of 80
There are three important factors to make money in the stock market:
1- Know the Rules
2- Be Disciplined
3-Keep Things Simple
Once you learn the rules and you trade with discipline, you will make money. The main objective of a swing trader is to profit from swings in price movement over the course of several days, capitalizing on the predictability of a pattern. Buying during the pullbacks increases the chances of making a profit.
As a Swing trader, you have to be patient to wait until your goals have been reached. Luckily, the wait is not too long. A typical trade is only in play from a few days to a few weeks. After the goal is reached, and the trade closed, the funds go into the next trade. Diversify your risk… A basic rule of investing is to spread the risk around.
Diversify your risk by investing no more than 20% of the value of your portfolio in any one stock. For example, if you have a $1.000 portfolio, invest no more than $200 in any one stock. Invest in stocks from different industries, spreading risk through different sectors:
Health, Technology, Energy.
Nobody has a crystal ball and things can go wrong in the short term for any company