Swing trading is an act with which one enters and exits a stock within a very short period of time for a reasonably small gain/loss. Almost every trader is fascinated with this approach because it gives a trader good control over his/her investment, is pretty exciting and of course not many traders are patient enough to wait months or years for their investments to grow.
Key Rules to Swing Trading
Best results happen to you only if the stock’s underlying trend is clearly identified. Up or Down.
Daily Trading range of the stock should be predictable and small. Usually stocks that have huge volumes fall in this category. Stocks that do not have lot of volume could trade as much as 20% intraday and do not hold good for this approach.
All the moving averages, short and long, should be in an uptrend and the stock price itself too should be above all such levels.
Best time to buy such stocks would be when the stock price goes down 3 or 5 days in a row.
Sell it when the stock goes back to the price where it started to fall, usually within 3-5 days.
As always, it is easier to see something than read. So i randomly picked Reliance Capital Limited which satisfies all the above criteria.
Buy when the stock goes down 3 or 5 days in a row and sell within 3-5 days for a small profit. Well, not really. Profits could be huge as is in this case an average of 18% for every trade. Not Bad.
Key Rules to Swing Trading
Best results happen to you only if the stock’s underlying trend is clearly identified. Up or Down.
Daily Trading range of the stock should be predictable and small. Usually stocks that have huge volumes fall in this category. Stocks that do not have lot of volume could trade as much as 20% intraday and do not hold good for this approach.
All the moving averages, short and long, should be in an uptrend and the stock price itself too should be above all such levels.
Best time to buy such stocks would be when the stock price goes down 3 or 5 days in a row.
Sell it when the stock goes back to the price where it started to fall, usually within 3-5 days.
As always, it is easier to see something than read. So i randomly picked Reliance Capital Limited which satisfies all the above criteria.
Buy when the stock goes down 3 or 5 days in a row and sell within 3-5 days for a small profit. Well, not really. Profits could be huge as is in this case an average of 18% for every trade. Not Bad.
