Wednesday, 30 September 2009

Why Swing Trading Matters?

As a trader, you have available at your dispose many styles of trading, regardless if you prefer stocks over FOREX or options over futures. Trading by its very nature is risky, it would be advised to take some time and find out which style of trading offers the best and safest return on your investment. Use swing trading to gain a true advantage over the market and other players.

Two simple but powerful reasons make it clear why swing trading is second to none. The first being that you do not need to be glued to your monitor 24 hours a day watching and waiting for a suitable trade setup. How many new traders do you know that think they must sit in front of a monitor all day waiting for a trade? Probably quite a lot. Typically, this kind of trading doesn't help at all and instead ends up with blown up trading accounts. You don't need to spend hours each day watching charts waiting to pin point your entry. Swing trading allows you to spend as much or as little time in front of the screen as you want. Entering and exiting trades doesn't mean you must be near your computer all day.

The second reason swing trading is the most suitable form of trading is that it offers you the lowest level of risk. Swing traders see the big picture. They usually observe markets from the higher timeframes and can see major trends much more clearly. Trading low level timeframes is difficult as the trends come and go much faster. The trends they see may only last minutes or hours. Swing traders can identify and trade in the direction of major trends which can last days, weeks, months or even years. By being able to trade in the direction of these major trends, returns on your investment are increased greatly while the chance of a loss is reduced significantly.

Everyone is different and as a result the style of trading you prefer might be different to someone elses, but if you are looking for high reward with low risk then nothing comes close to swing trading. Swing traders usually follow the smart money thanks to their preference of trading higher timeframes and only trading in the direction of the trend.

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