Swing trading is a popular strategy in the financial markets, including Pakistan, that aims to capture short to medium-term price movements, or "swings," over a period of a few days to several weeks. Unlike day trading, which focuses on intra-day fluctuations, swing traders hold positions longer, allowing them to benefit from larger price shifts.
This strategy heavily relies on technical analysis to identify potential entry and exit points. Traders use tools like moving averages, Relative Strength Index (RSI), MACD, and chart patterns (e.g., head and shoulders, double tops/bottoms) to forecast price direction. Effective risk management is crucial, including setting stop-loss orders to limit potential losses and defining take-profit levels to lock in gains. While requiring patience and discipline, swing trading offers flexibility compared to day trading, making it a suitable option for those who prefer not to monitor markets constantly.