▷7 Profitable Swing Trading Keys

Know how to act as a swing trader

To start working as a true swing trader, the first thing we must take into account is the aspect of the organization. This will have to carry out a daily analysis on a chart, which you will sometimes have to make in a period of 4 hours. The time devoted to researching trading opportunities will only consist of a few minutes, as the remaining time should be left to traders. scenarios thrive autonomously. Without a doubt, it is a point in favor of swing trading.

Swing trading is a bit like trading as such in its long-term trendthough on the contrary, movements they are much more shorts. It is based on this that when a swing trader operates, he investigates graphic patterns that last a few days and try to get higher price movements than you are used to getting in transactions that last a day. To proceed, the swing trader uses the sum between the fundamental and technical analysis.

It does not matter if there is a long-term trend or if on the other hand the market is mostly bound to the range. Typically, a swing trader is not going to continue a position long enough for it to really matter. Without a doubt, the volatility it’s a key aspect for a swing trader. As the market becomes more volatile and the higher the number of short-term price changes, the greater the chances of initiating trading action.

Know two basic swing trading strategies

You must not forget that the Swing Trading is a type of trading and not a strategy as such. The timeline on which you operate determines this type. Inside, there are countless strategies that are at our disposal to operate in Swing Trading. As we have said, it is a type of trading in which you work in short and medium times.

In itself, the strategies that we will study are not unique to Swing Trading, and as is often the case with a large part of the technical strategies, both the resistors Like the supportsthey are about fundamental ideas behind these.

It is unusual for markets to move in one constant direction. Moreover, sometimes in the event that the trend is bearish or bullish, in this you can see stepped actions. In this way, we have the option of doing Two Kinds of Swing Trading Strategies: on the one hand work with the trend and on the other go against the trend.

On the one hand, we see that countertrend strategies tend to be profitable when resistance and support heights remain constant. And on the other hand, that in the case of the strategies that follow the trend, they try to find the episodes in which the heights of resistance and support remain stable.

Work with the trend

We realize that a trend is acting up in the market at the moment before making high values ​​that go higher and higher. Just the opposite happens, when a trend acts downward marking the lowest lows.

Sometimes, in a trend, actions occur that are unfavorable to it. These movements are called pull-back. After this time against the current of the trend, the one that acts upward starts up again. The swing trader who chooses to work with this trend should try to get the move to the upside.

Another question we must ask ourselves is what can be the duration period of a pullback? The simplest answer is that there is no clear way that this can be known. To counteract this fact, we will try to find the affirmation that the market has overcome its original trend, from the hand of the following points: find a specific trend, wait for the trend to change and enter the market after that change in the tendency. We will be waiting for the market to make higher lows again.

Go against the trend

this strategy acts in the opposite way to follow the trend. We agree, yes, that we will seek to find the trend in a short period of time. The difference is that in this case, we intend to profit with the frequency with which the trend is used to breaking.

If the swing trader works against the trend, it is not uncommon for him to try catch the swing right at the reversal moments. That is why we will seek to distinguish when the trend breaks. This would happen in an uptrend when a high is accompanied by a series of disappointments as it tries to improve on new highs. So that we will position ourselves lower anticipating to this mutation.

The strategies that we have been good at are quite easy, because they take our ability to know and understand price action. Still, we should ask ourselves how to optimize them. The simplest answer is practicing

Recognize the optimal swing trading indicators

With the idea of ​​perfecting our strategies in Swing Trading we can use an indicator that tells us what we think and we can detect signs to buy and sell at the same time.

The most optimal indicators in Swing Trading are the following:

  • Fibonacci: after a strong and sudden movement in the market, this indicator helps us to know how far we should return in the price, with the idea of ​​trying to stimulate it again later. These actions will be enjoyed by swing traders.
  • RSI: This indicator tells us if the market is at a time of more purchases or sales of the account.
  • Moving averages or MA: These relieve prices by giving us a more clarifying perspective of the trend. Since it contains prices from older information, it is an easy way to make a comparison of the current price against previous ones.

There are quite a few indicators that can be convenient for this type of trading. Especially in the event that a procedure finds the trend as such. To see more strategies in depth you can click on the following link: see other strategies.

Know how to manage risk in Swing Trading

The Swing Trader does not always obtain benefits at the times in which he operates. There are several occasions in which we incorrectly study the market. This moves unexpectedly on many occasions, and therefore it is not surprising to make mistakes. It is at this point that the risk and money management they are so relevant.

A relevant feature in Swing Trading is the ability to know how to be profitable. In other words, knowing how to manage the investment. We have to keep in mind the cases in which we could fail, even before knowing the scenarios where we could win. In this sense, we must try to know the ins and outs to lose the least possible amount of money, trying to win as much as we can.

Some tips to manage the risk that we could point out are the following: No must compromise our account with no operational action; must to know everything about our risk profile; we have to estimate our maximum loss that we can bear; And finally, we must take into account the increase reserves of our account with the idea of ​​spreading the risk.

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