Swing trading may be a technique of trading with an objective of generating profit from price changes or swings of a stock at intervals one or many days. Swing traders aren't sometimes involved within the built-in value of the shares, rather they concentrate on the price trends of the shares that are determined by technical analysis of stock market charts, that help them establish the stocks that have some price momentum occurring.
Swing trading being the same as day trading is a speculative based trading that depends heavily on the market trend and technical analysis for a successful trading.
The basic swing trading techniques:
Bullish trading
Bearish trading
Fading trading
Algorithm trading
Bullish trading :
Bullish trading utilizes the uptrend of the market. Stocks usually move in a zigzag pattern.
When many zigzag patterns are arrange together the chart appears to be moving higher with some degree of predictability. this is the uptrend of a stock.
Traders focus on the initial movement upward as the major part of the trend followed by a counter trend.
Traders enter the swing trade when the stock restarts the original uptrend and exit the market when they find the profit target.
Bearish trading :
Bearish trading utilizes the downtrend of the market. The zigzag movement of the stocks within the downtrend also has the same high and low rules like bullish trading and the same rules may be followed to create gains within the downtrend.
Fading trading :
Fading trading is the technique of trading against the trend. it's also known as counter trading.
Traders enter the market when the share swings are lower and create the exit before the counter trend ends and also the stock recommence the main trend again.
Algorithm trading :
Algorithm trading is using complicated algorithm and formulas by a high-speed computer. it's sometimes done by investment banks, mutual funds, pension funds and other investor-driven buy-side institutional traders as it is helpful in dividing massive trades into varied smaller trades allowing them to manage market risks and its impact.
