Wednesday, 30 September 2009

Which Markets Are Best For Swing Trading

Swing trading offers a trader the chance to reap massive returns but without the usual high levels of risk you may find in other styles of trading. Swing trading is not limited to any specific market and can be used on any market around the world. However, a market must posses to main key factors in order for you to be able to enjoy the benefits of swing trading.

First, swing trading requires a market that is known to trend more than going sideways. Some markets are seemingly randomless and offer no explanation as to why they move like they do. Swing traders prefer markets that trend more often than not. This must be present to allow you to take chunks or slices out of the market and make money.

Secondly, volatile markets are not suitable for swing trading. If your market is too volatile, it will be difficult to open and close trades in time before price moves against you. Swing trading takes time and as a result if a stock moves too fast or too abruptly in any one direction, it does not give you time to plan your entry and exit. The best kind of market to trade is one that is traded heavily.

To make the most of swing trading you must first find a market that has a high tendency to trend and is not too volatile. Always remember this and you will increase your swing trading edge.