With the world being so connected, it has become easier for brokers and private investors to be part of the stock market. Selling and buying stocks have become a profitable business venture for many individuals.
Whether it’s done as a hobby or as a full-time job, it is evident that the stock market has become one big business in itself. If you play your cards right, you can make thousands of dollars. Even though it has lots to do with logistics, pre-empting, and a little bit of luck, it’s a gamble that many don’t mind taking.
Trading has taken on many forms and styles including day and swing trading. There are ways in which you can be a successful trader if you use the right techniques and strategies. But first, it’s important to understand this concept.
What Is Swing Trading?
Different from day trading, a swing trader will most probably do this as a hobby instead of a full-time career. It involves identifying key factors in the change of commodities, currencies, and stocks.
It’s a long process that can take from days to weeks instead of minutes and hours. These kinds of trades need some time to work themselves out. You’ll hold on to a position for at least one or two days, to make sure you achieve maximum leverage and higher margin requirements.
Because you are holding on to positions much longer, you will be at risk of losing larger amounts of money. The great thing about this style of trading is that you won’t burn out or have too much stress because you’ll only be doing it on the sidelines. You’ll be able to let go of your trades before the market reverses, giving you a profitable outcome.
Learn more about it here: https://www.investopedia.com/terms/s/swingtrading.asp
Proven Strategies That Work
Most brokers and traders need to have a strategy in place. Without one, you will make more losses than gains. Here are a few expert tips on strategies and techniques you can apply to be a successful swing trader.
Know When to Go
Holding on to stocks for too long might have you running a risk of losing all your investments. To avoid this, you have to identify a range within the market. Then wait for the costs to move below Support. Once there is a sturdy rejection of cost then go long. Make sure you take your profits before Resistance (selling pressure).
Because you will be making profits off of one great move, you need to exit before Resistance. This will give you a higher probability to make a profit.
One Move
As stated above your overall success will rely on one successful move. This can also be referred to as ‘catching the wave’. If a surfer wants to ride on a wave that will allow him to make great tricks, they need to catch the right one and know when to make the move.
Enter the trend once the pullback has ended. Once the tides change, investing in a trend that has a deeper pullback will give you a higher profitable opportunity.
It is advised that you seek out trends that have a 50 MA (Moving Average).
Be Versatile
If you’ve found a strategy that always works for you, great. This doesn’t mean that you will always be able to succeed by sticking with your guns. Be more versatile when it comes to your swing trading strategies.
When you dive deeper into this form of money-making, then you need to be able to deal with a few different hands.
Go With the Tide
Especially, for beginners. It’s a great idea to go with the flow. Identify trends that the majority is going with and go with the group. At first, it’s never a bad thing to follow trends and be a follower to those who have been in the industry for quite some time.
Stay up to date with news in order for you to know what’s going on in the trading market. Even when trends move up and down on the scale, this is normal. Identify higher trends by calculating the highest highs on the scale and the highest lows.
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Go Against the Tide
In the end, trading has a lot to do with making the right move, and sometimes that move is to go against the stream. When everybody is investing and buying stocks of one trend, go against the trend (counter-trend).
This means that you’ll have to spot a strong momentum and drive towards one trend from other buyers. Then you need to identify a price rejection that’s strong, which will cause the trend to come to a close. Go short and cash in your profit before the swings are low.
A risky move, but it has proven to be extremely successful and profitable.
Use a Broker
When you really want to get into the world of swing trading, but you just don’t seem to have the time to spend. Invest in a broker to do all the work for you, or to give you access to trading markets.
Brokers especially those who work with Forex trading, will be able to assist you through your swing-trading journey. High-profile quality brokers like the ones from CFI Financials are usually well-trained, professional, and licensed.
When you want to work through a broker, they’ll probably ask you for a minimum deposit. The deposit amount is usually not that large and can be altered as time moves on. Especially, if you’re a beginner, you can start by investing small. Making your risk much less.
While working with a broker you will get enough tips and tricks of the trade, in order for you to move over to trading independently.
Swing trading is a great side hobby for those who have some extra cash to invest. A combination of money, time, and strategy will give you a successful and profitable desired outcome. Don’t forget that practice and patience will make you perfect in the end.
