Traders focus on different strategies to get the best results, and you might just be wondering what’s the right one for you.
Swing Trading is basically a short-term strategy that traders use to buy and sell stocks which indicate an upward or downward trend in the future; commonly from one day to fourteen days. Swing traders mostly trade on the basis of main trends of the chart where they go long in case of uptrend by buying shares and shorting shares or buying put options in case the trend is down.
The Top Three Tips to Help You In Your Swing Trading Strategy
Are you looking to start your own trading journey but wondering how to go about it? Here are 3 tips for swing trading traders that can offer you some great results.
- Regulate your trading with the general direction of the market.
The general direction of the market is best followed by the S&P 500. If you’re thinking about trades and trends follow the primary and average trends measured by the S&P 500.
S&P trends give traders the direction in which they should make short-term trading verdicts. If your eye is on short-term trades and even if your trades are successful only for a short time, the bigger trends will affirm themselves. This way the amount of profit you make will be short. Therefore, you need to figure out the long-term trends so that you don’t make trade decisions against the flow.
- Go long strength. Go short weakness.
Don’t go against the line after figuring out the general trend. Keep an eye out for long trades during bullishness periods and relevant short trades during bearishness periods
When it’s possible, integrate Price Relative to the S&P 500 for your chart analysis. You will be able to find how a specific stock is performing in comparison to the market. During bearishness, look for stocks whose relative strength line is going down and do the opposite during bull markets. It’s a long term game that you would play here, but one that is sure to give you great results.
- Always trade in accordance with the trend one-time frame preceding the one you are trading.
Short-term traders generally focus on short-term charts. But, this method of technical analysis is mostly partial or inadequate as the traders don’t look at the bigger picture.
However, this doesn’t mean you shouldn’t focus on the primary trends during swing trading. Even during bear markets, there can be phases when the average trend becomes positive and stocks rise up. These bear market gatherings can be enormously profitable. The S&P 500 and other big intermediates can rise up to 20% or more in a short time led by short-covering. While active stocks with high “betas” can rise up a lot, lot more than this.
Even if you are a short-term trader you must know when the average-term trend is changing and a countertrend rally is taking grip.