Swing trading is a trading strategy through which an investor tries to take advantage of short-term movements of a security that can last from a day to perhaps a few weeks.
A trader who employs this strategy looks for a stock that has the potential to move significantly in the desired direction within a short period of time.
To find a stock that works this way, most traders would look for some event that is likely to drive the stock in one direction or another. An event could be, for example, the release of the company's earnings or perhaps a geopolitical event that could have an impact.
For example, if the government is about to approve a new series of financial regulations, one might expect financial stocks to experience some movement.
To succeed in swing trading, one must have the ability to detect a stock that is about to make a move.
They must also be able to predict in which direction the stocks are likely to move and must be able to execute those trades without hesitation.
As with any type of trading, mistakes are made from time to time. The important thing is how the trader reacts to them and how well they manage risk when trades go wrong.