Proven Swing Trading Strategies That Actually Work
If you are new to the world of swing trading, you should know about the best swing trading strategies that actually work. However, you should also understand the potential risks that are linked with each of the swing trading strategies, as the right strategies can help you capture frequent price movements, but it’s a slow-paced market landscape.
We don’t learn about the best swing trading strategies that actually work.
Strategy of Trend Following
When it comes to the best swing trading strategies, you will find that the most popular one is the strategy of trend following. With that set, it does not matter whether you are a beginner swing trader or an experienced one; the strategy of trend following is quite easy, as you enter trades in the upward or downward directions of a potentially established price trend.
Following this strategy, you will not predict market bottoms or tops, but you will expect the established price trend to continue. For instance, when it comes to the practical use of this strategy, you might want to enter a trade when the stock temporarily dips during an upward price trend.
Strategy of Momentum
Another swing trading strategy that is incredibly practical and popular is the momentum strategy. In swing trading, the momentum strategy focuses on buying stocks that are gaining momentum, potentially due to the reasons that the prices are affected by some internal or external factors. It is typical for potential traders to look for trading stocks that are on the rise, incorporating the momentum strategy in swing trading.
When it comes to the practicality of the momentum strategy, you should analyze rising sector and market trends. Subsequently, you should use technical indicators, such as RSI, to confirm potentially upward movements of prices. Similarly, you must identify increased trading volume along with price movements.
Strategy of Support and Resistance
Another practical strategy for swing trading is the strategy of support and resistance. Following this strategy, it is in your best interest to buy additional support levels, which is where the potential price bounces back up after a temporary dip. Subsequently, it will be selling at resistance, which is where the price potentially drops. You should know that support is the price level where the trading stock potentially starts falling and eventually starts rising.
On the other hand, resistance is the price level where it stops rising but is prone to start falling.
Strategy of Breakouts
Another swing trading strategy that actually works is the strategy of breakouts. When leveraging this swing trading strategy, you must purchase trading stocks when their respective prices break above potential resistance levels. Likewise, you must sell trading sticks when their respective prices break below potential support levels.
Essentially, by using the strategy of breakouts, you will be trading swing highs and swing lows. To make the most of this strategy, you must improve your technical analysis skills, as you will be analyzing stock charts so you can fully identify resistance and support. Of course, you should use trading volume to confirm potential breakouts, as high trading volume indicates solid market interest and a bigger chance of continuation.
