Swing Trading

Discussion in 'Trading' started by Girlpower, Oct 16, 2002.

  1. I've often heard the term and it was all the rage a while ago, but I've absolutely no idea what it's about or even what it is.

    I look for patterns in the bars and rarely use anything more than the bars themselves, plus a couple of lines and maybe if I'm really pushed an MA. Yep - That basic! :)

    Is there someone who can tell me what swing trading is and what it's all about?


    Natalie :confused:
  2. dozu888


    is when the kids have outgrown the swing set, you sell it on eBay.:D :D
  3. sempai



    Good question.

    According to Linda Raschke in Street Smarts, "Swing trading is anticipating the market's next move, and asking what is the most probable outcome." She also quotes Charles Dow as describing an active method of trading (swing trading) as "dealing in active markets making many trades, and relying on stop-loss orders for protection."

    Swing trading can be done in any timeframe. It's more defined by the trade management and style involved. It usually involves using relatively high probablility, short term strategies in conjunction with tight stops and agressive trade management to minimize risk on entry, and to exit with profits at key levels or price extremes.

    As opposed to a trend following style, which would use a relatively wide trailing stop once you are in the trade in order to let it run, swing traders would prefer to enter and exit at key turning points or extremes, rather than let a trade come back against them.

    Some of the different methods of swing trading involve trading at support/resistance levels, entering on retracements of trends, climax patterns, breakouts from trading ranges, etc. , similar to most other types of trading. Again, the main difference is in how it's managed once you're in.

    Hope this helps some.
  4. prox


    I have no idea to the true answer either, but my interpretation is to buy on retracements relative to the MA and sell on oversold conditions. Typical hold time 1 to 10 days.