Best swing trading strategies: How to Swing Trade Stocks: Examples & Tips

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Each average is connected to the next to create a smooth line which helps to cut out the ‘noise’ on a stock chart. The length used can be applied to any chart interval, from one minute to weekly. SMAs with short lengths react more quickly to price changes than those with longer timeframes. This trading strategy uses a pattern called the Fibonacci retracement tool. This instrument can help swing traders to identify possible reversal levels on a price chart. As is well known, a trend doesn’t consist of a straight rise or fall; the price tends to retrace back before continuing on with the main trend.

candle to close

Rather than the 50-day moving average of volume as your threshold for heavy turnover, look to the volume of the shorter consolidation area for clues. If the breakout volume can surpass the recent activity, that can be a sufficient confirmation of strength. There’s no best swing trading strategy out there and it all depends on your trading style to see which approach resonates with you.

This trading strategy is also very popular among swing traders and uses simple moving averages . Since prices change every day, so do SMAs, so each average connects to the previous ones in a line, which can be applied to price charts. In contrast, swing traders attempt to trade larger market swings within a more extended time frame and price range.


Try to buy different stocks to minimize the risks of potential losses. To mitigate potential risks, you can also include a Stop Loss to exit your trades automatically once your target figures have been reached. This coupled with technical analysis can help you predict whether there’s going to be a trend reversal and plan your trading strategy.


The MACD crossover swing trading system provides a simple way to identify opportunities to swing-trade stocks. It’s one of the most popular swing trading indicators used to determine trend direction and reversals. The MACD consists of two moving averages – the MACD line and signal line – and buy and sell signals are generated when these two lines cross.

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To offset this, day traders are often offered the «opportunity» to leverage their portfolios with more margin, four times the buying power rather than double. Taking larger leveraged positions can increase percentage gains to offset costs. A lack of focus, discipline, or just plain bad luck can lead to a trade that goes against you in a big way. A bad trade, or string of bad trades, can blow up your account, where the loss to the portfolio is so great the chances of recovery are slim. For a swing trader, a string of losses or a big loss can still have a dramatic effect, but the lower leverage reduces the likelihood that the results wipe out your portfolio.

In other words, the main thing that you as a swing trader should remember is to trade with the trend and not to miss your turn to exit. There are many things to look for when analyzing the price charts. These lines show when exactly the prices tend to change the direction of their movements. A support line indicates a price range on the chart below the current market price when buyers take over the market and the price starts to climb up after a downtrend.

You can also use tools such as CMC Markets’ pattern recognition scanner to help you identify stocks that are showing potential technical trading signals. The steps for a successful swing trading strategy include identifying trends and chart patterns, selecting the right indicators, setting entry and exit points, and managing risk. As we’ve already learned, swing traders make profit from price swings and trend reversals. It is the stocks with high volatility that have constant price swings and are profitable for traders.

We assumed that this candle shows the presence of real sellers in the market. If the high of this candle were to be broken, it’s clear enough that this is simply a fake breakout as there are no real sellers. One of those is to determine if we should trade a counter trend system or a trending stock setup.

A wide spread between the bid, the ask and commissions can eat too large a portion of your profits. Swing traders can struggle with this too, but the effect is amplified for the day trader. Day traders can find themselves doing all the work, and the market makers and brokers reap the benefits. The Double Death Cross strategy is the best swing trading strategy you can use during a stock market crash. This is not a matter of “Will the stock market crash again? ” but it’s really only a question of when is the stock market going to crash again.

Rayner you are really the best teacher, I have been learning from you for over 2 years now and I keep on growing. Amazing, Full of knowledge, practice-based scenarios. Good inspiring and you are number one transiparent forex teacher i ever see ….. You are doing great Job as once i read your books my imegination come like we having face to face conversation or like physical talk.

It’s important to take swaps into account before deciding to swing trade, so that these extra expenses don’t come as a surprise to you. It isn’t for every investor and not every investor can succeed at it. It takes time, practice, and experience to trade price swings.

How to use this guide

Use pattern recognition scanners and technical analysis tools to find which stocks are about to get price swings that you can capitalize on. Charts and technical analysis tools also help you predict what you might expect from these price swings and build your trading strategy. A support level indicates a price level or area on the chart below the current market price where buying is strong enough to overcome selling pressure.

Swing traders do bear higher risks than day traders, but the profit they do get from it is also quite high. It is also perfect for those traders who have full-time jobs and can only dedicate a limited amount of time to trading. Today we learned about the main swing trading strategies and how they can help you as a trader plan your moves. If you don’t have the opportunity to be a full-time trader, using swings for trading might be the best trading style for you.

So to ensure a high probability of success, you want to exit your trades before the selling pressure steps in . Start swing trading to potentially profit from your trading edge. The second element of this candlestick based method is that we need the breakout candle to close near the low range of the candlestick.

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Bcoz you hold humanity but where as western world trying to make money from every thing by selling what they know. Thank you Rayner for your uncountable number of very educational posts. Don’t make the mistake of managing it on a lower timeframe because you’ll scare yourself out of a trade on every pullback that occurs.

The first element of any swing strategy that works is an entry filter. For our entry filter, we’re going to use one of our favorite swing trading indicators aka the Bollinger Bands. Another risk of swing trading is that sudden reversals can create losing positions. Because you are not trading all throughout the day, it can be easy to be caught off guard if price trends do not play out as planned. To decrease the risk of this happening, we recommend issuing stop orders with every new position. Stop orders can help you “lock in” your gains and can also help you cut your losses.

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