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Strategies of Swing Trading

Swing Trading is a unique trading style that emphasizes on earning profits via changing trends over a certain time period. The primary job of the swing traders is to capture the maximum and minimum points of the stock prices to earn profits. Usually, the stocks are held for about four to five days. However, some people choose to keep the stocks for a few weeks. 

Several strategies are helpful in gaining profits via swing-trade stocks. Some of such techniques are:

Large-cap stocks

An effective strategy to make the swing trading successful is by picking the right stocks at the initial stage of your investment. Large-cap stocks are the best option for a swing trader as such stocks are traded frequency on major markets. Moreover, in an active market, stocks are likely to swing on both extremes, so the swing traders must be ready to switch their sides when the trend seems to be against them.

Fibonacci retracement

Fibonacci retracement pattern is a tried-and-tested technique that is applicable in most of the trading methods, including swing trading. It helps identify the support and resistance levels, which can be further used to find out the reversal levels of the stocks. The majority of the traders often look at a 50% level of the stock charts because, at that point, reversal is highly anticipated.

However, it must be noted that the Fibonacci pattern does not include the 50% level as the standard rations are: 23.6%, 38.2% and 61.8% on a stock chart to find out possible reversal scale.


Support and resistance lines are the technical indicators used in technical analysis. These indicators are the foundation upon which a successful swing trading strategy can be devised.

A support level is used to exhibit the price level on the chart under the present market cost, where purchasing is good enough to avoid selling pressure. Swing traders should look upon the support level while entering a buy trade. 

The resistance level is the opposite of the support line. It shows the price level above the present market cost. A swing trader can enter a selling position after looking at the resistance lines.

Channel trading 

Channel trading is also an efficient swing trading strategy that is implemented when a trader wishes to mark a stock, exhibiting a strong trend within a channel. If a trader has already made a channel of the expected trend, he or she would want to open a sell position as soon as the price goes down the top line.

It is important to note that channel trading can only be successful if it is done according to the current market trends. For example, when the price is down, a swing trader should open the sell position immediately. Otherwise, huge losses can occur.


It is an efficient method of trading because it can provide the valuable feedback you need about your stocks and investment within a couple of days. The feedback can keep you motivated and interested in trading as you can keep track of your investment. Hence, if you have an interest in various types of trading, you should consider swing trading to be your top option.