Swing Trading

[skinner36]

I have been reading a bit about swing trading but I havefound it a bit confusing. Would someone be able to explain in in laymans terms


Regards

joHN

 

[questionall_42]

Here are some links for swing trading in layman's terms:

http://en.wikipedia.org/wiki/Swing_trading

http://www.investopedia.com/terms/s/swingtrading.asp

 

[howardbandy]

Hi Skinner --

Swing trading is a term that refers to short holding periods -- a few days, usually. Longer than intra-day trading where the trade is closed by the time the market closes, shorter than trend following based on end-of-day data.

Two examples of swing trading are:

1. Use intraday bars, say 15 minute to one hour, and take trend following trades based on those time periods. That is -- buy strength based on intraday bars. Close out the trade when the intraday trend changes.

2. Use end-of-day bars and take mean reversion trades that last one to three days. That is -- buy weakness based on end-of-day bars. Close out the trade on a timed exit or profit target. It is often difficult to wait for the exit to come from a signal, because that is often too late.

Thanks,
Howard