Swing trading with shares - earn more money?
The aim is to profit from shorter-term "price swings". These are situations where new breakout trends are not necessary to make trades. In fact, most swing trades are glorified support and resistance trades. A swing trader buys and sells near resistance when the price falls and hits support.
Less competition
As a rule of thumb, the shorter the time frame, the more competition you will face. When trading mega-cap stocks like Apple or Bank of America, the counterparty in most of your trades will be a robot. There are millions of these trading robots, all of which trade based on complex criteria and create more noise than they do in longer time frames.
As a swing trader, your speed/quality of execution is not critical. You can be off your target price by a few pennies and it won't affect the trading outcome as the profit targets and stop losses are much wider than in day trading.
Less time required
There is good point from trade-exness: ผู้ค้าที่ใช้งานสามารถใช้เวลาวิเคราะห์ 1-2 ชั่วโมงต่อวันและให้ผลตอบแทนที่ดีต ภาพรวมของโบรกเกอร์ Exness าบใดที่กลยุทธ์ของพวกเขาใน นั้นดี. เวลานี้จะใช้ในการพัฒนาอคติทิศทางสําหรับตลาดกว้างแล้ววิ่งผ่านแผนภูมิทั้งหมดบนหน้าจอของคุณเพื่อค้นหาโอกาสที่ดีที่สุดในการแสดงมุมมองทิศทางนั้น.
An active trader can definitely spend 1-2 hours a day on analysis and make decent returns as long as their strategy is sound. This time would be spent developing a directional bias for the broad market and then running through all the charts on your screens to find the best opportunities to express that directional view.
Let's now look at some of the disadvantages:
Less capital at work
Due to the uncontrollable overnight risk and larger price movements associated with swing trading, you are forced to reduce your position sizes from the magnitude of day trading. Day traders, on the other hand, have the dexterity to quickly assess a trade from high conviction and then reduce it when it goes against you (as long as liquidity is available).
Missed opportunities
Most swing traders do their analysis every day during the same time period. Usually it is an hour before the market closes. This is time efficient and allows you to spend your time on other projects. However, you will miss some great opportunities early in the day.
Tools of the trade
Swing traders tend to keep their toolbox fairly simple. Most rely on a simple fee platform and a solid stock screener to filter opportunities.
Charting
Most swing traders make their trading decisions based on price charts. In this day and age, there are countless choices, many of them free, so we don't have to spend a lot of time discussing the pros and cons of different charting packages. The differences only become apparent when you become an advanced trader.
Here are some free charting packages:
- MetaTrader
- Tradingview.com
- Yahoo Finance
- Most online brokerages offer a free trading/charting package to their clients
The charts of the typical swing trader look something like this:
They usually use one or two technical indicators (i.e. mathematical calculations based on price) to give them additional insight into price trends.
Your needs as a swing trader may differ, but you can see why the choice of charting software to use is not high on most swing traders' lists.