Swing Trading Strategies – 3 Tips For Swing Trading Success
Swing trading has gained popularity in recent times and this sideways market lends well to this style of trading whether its currency trading or in other markets. There are other strategies that work of course but when it comes to minimal risk and high rewards not many other techniques even come close. Nothing is 100% guaranteed of course, but the odds of placing a winning trade are the best with swing trades. So, you want to give it a try? There are 2 tips to bear in mind if you are going to give this strategy a shot.
What do you do first? You make sure that the security or instrument you are going to trade shows a tendency towards trending than not. In simpler words, does the market for this instrument move around in a natural or smooth patter? Or does it jump around erratically? You might be thinking. All markets are erratic. Well, they might seem unpredictable to you but if you want the facts you look at the trading charts. Open up a daily chart for whichever instrument you are looking to trade and look at the price movements. Go back several months to see if there are swings in price action. If there are, then this market meets the first prerequisite for swing trades.
You might’ve heard of the phrase – ‘The trend is your friend’. This is true. Our second tip is – don’t mess with the trend or in other words don’t trade against it. A lot of people who like to go against the tide or don’t like to follow others will try to place trades against the trend. If you fall into this type of trader, then don’t use swing trading. This advice will save you your navy veteran t shirt and then some. Going against the trend will cost you a lot in the long run and going with is likely to be more profitable in the long run.
Our third tip doesn’t concern swing trading alone but is a very important one for trading success in the long term. Ready for it? It is – keep an investment journal. This suggestion might seem like a letdown and some of you might have even rolled your eyes. But, there are so many traders that don’t realize that behavioral investing or investing psychology has to do a lot more with market movements than they could possibly imagine. Keeping an investment journal is the first step to understanding what worked and what didn’t. This will help you understand your own psychology and that will go a long way to making more profitable trades.
write by Aylmer