Quickly improve swing trading skills: 4 practical strategies to share

Every trader has different trading preferences. Some prefer the rapid response of short-term trading, some are fond of steady medium and long-term layout, and some are keen on flexible operations of swing trading. We often discuss short-term and medium-term strategies, but do you understand the strategies of swing trading?

What is swing trading?

Swave trading, as the name suggests, is a trading method that uses short-term market price fluctuations to make profits. Its holding time is usually between days and weeks, which is completely different from the long-term investment philosophy of “buy and hold”.

Long-term investors focus on the market’s general trends and long-term cycles, and their positions may last for several years; while swing traders focus on short-term price trends, setting clear stop-profit and stop-loss goals, and strictly implementing established trading strategies.

In swing trading, technical analysis is the main tool for finding trading opportunities, while fundamental analysis is used as an auxiliary means. Since swing trading focuses more on short-term operations, technical signals provide more practical guidance. At the same time, combined with fundamental analysis, the chances of winning in the transaction can be further improved and potential risks can be reduced.

Four major strategies for swing trading

A successful swing trading process involves evaluating short-term market trends, establishing positions and closing positions in time. Therefore, the swing trading strategy mainly covers the following three elements: trading direction and entry timemachine and take profit/stop loss points. Based on these elements, commonly used swing trading strategies include:

Breakthrough Trading

The key to breaking through trading is to capture the moment when the market price strongly crosses the key resistance or support level. This behavior often indicates a major change in the market supply and demand relationship, and the market may continue to extend in the direction of breakthrough, providing traders with valuable entry opportunities. However, false breakthroughs are common in actual combat. Traders need to accurately distinguish the authenticity in order to improve the winning rate of trading.

Indicator Trading

Indicator trading, make decisions based on the clear signals released by technical indicators. Whether it is the beauty of the cross between the moving average golden cross/dead cross, the agile steering of the MACD indicator, or the overbought and oversold warning of the momentum oscillator indicator, they all point out the direction for traders. After the moving average and MACD cross, the market often moves steadily along the cross path; and the overbought and oversold momentum oscillator indicators may indicate a reversal of the short-term market.

Channel Trading

Channel trading, use technical tools such as channel lines or Bollinger bands to gain insight into market trends. In a market with obvious trends, an accurate channel line can guide the rhythm of buying low and selling high. In a volatile market, Bollinger Bands become a good assistant to evaluate the range of price fluctuations, helping traders sell high and buy low, and capturing every profit in market fluctuations.

Style Trading

Model trading captures trading opportunities by identifying classic patterns in the chart, such as head and shoulders bottom/top, flag shape, triangle, etc. These patterns are like the language of the market. Once interpreted correctly, they can not only reveal the potential trading direction, but also set reasonable stop-profit goals for traders.

Although the position time of the band trading is less than that of medium and long-term trading, traders also need to be extremely patient, because the correct opportunity does not often occur, and it takes a long time to observe and wait for signals that meet the trading system. During the waiting period, traders need to resist short-term temptations and stick to their trading discipline.