#SwingTradingStrategy

Swing trading: Strategies and insights for successful trading

When you set Newton’s Cradle into motion, it sparks a chain reaction that transfers energy from one dangling marble to the next before sending the last one flying into the air, after which the process repeats in reverse. You might say swing traders see the market in similar terms: Instead of being mesmerized by the back-and-forth motion of the markets, they try to harness those movements.

Prices of securities may fluctuate for many reasons — company news, industry trends and movements in the regional or even global economy. Rather than bank on a stock price rising over time, swing traders seek to profit from smaller price changes, generally over a period of days or weeks. This active trading strategy requires a lot of time and patience. While it can be effective, you need to be comfortable taking on more risk. Here’s a look at how this hands-on investing strategy worksWhat is swing trading?

Swing traders profit from short-term changes in the price of an investment. They can make money on the way up or down by buying when the price dips and shorting a stock

when the price rises. To guide their decisions, these investors rely primarily on technical and to a lesser extent, fundamental analysis to forecast what comes next. Put another way: Swing trading involves studying price and volume trends and understanding the company’s value based on its earnings, debt, and overall performance relative to the market.