subject: Swing Trading - Just What Is Swing Trading? [print this page] Ever wondered what is swing trading? Swing traders ride the swings or oscillations that markets make as the stock or currency pair pivots from one price level to another. Swing trading is a style of trading that can be used on any market. The three most popular trading styles are day trading, swing trading and trend or buy and hold trading. Swing trading sits in the middle of these styles and I personally recommend this as the absolute best style of trading, for any kind of market. Let's take a look at the other styles.
If you open and close all of your trades within a single day, you are known as a day trader. Even opening and closing trades for several seconds to minutes, commonly known as scalping, is considered day trading. Scalping typically involves high risk but in turn offers potentially high profits. Buy and hold traders take the extreme of trading and commonly hold trades for several weeks to months. A trader typically needs substantial trading capital to be able to make any decent profit from buy and hold trading.
Swing trading is medium term focused and usually has traders holding trades for several days, but less than a week. Do traders hold trades for longer periods? Of course, but this is just a general rule of thumb. Swing trading is a style that can be applied to any market, but some markets may be more suitable and as a result more profitable. Many traders swing trade because it is the only style to offer high rewards with the lowest levels of risk. This is the perfect balance for trading profitably.
Scalping, while sometimes profitable, usually results in many traders melting down and blowing up their trading capital. If you want a high rate of return with the lowest levels of risk, swing trading is right for you. A trader can apply swing trading to any market regardless of where they may live in the world.
by: Creztor Tessel
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