Wednesday, 16 December 2009

Are There Any Good Swing Trading Strategies?

So what makes a good swing trading strategy? What is swing trading all about and how can one strategy be better than another. Are there any key points that a strategy must address to truely be considered good? Swing trading is based on proper trend identification and using market rallies and market pullbacks to enter.

The most important element of swing trading is trend identification and trading only with the trend. What makes a trend so important for swing trading? It is said that the smart money typically follows the trend and if you follow the smart money you stand a good chance of winning. This makes sense then that the most reliable trading strategy is one that goes with the trend. This greatly increases your chances of making a profit and being successful in the long run.

Swing trading strategies are typically all about using rallies or pullbacks to enter. Swing tading isn't an enter the market anytime you want style of trading, swing traders most often wait for rallies or pullbacks before they enter. By waiting for a retracement to occur, they are able to enter a trade at a price which is in their favour. Why does this matter? Entering the market at a price that is in your favour means you stand to profit more.

A good swing trading strategy is one that is based around trend trading and entering the market at a time where you stand to get a good price. Swing traders manage to do this by waiting for price to retrace before it continues on with the main trend.