Hi guys, Raj here from trading college.co.uk, just with a really quick guide to swing trading. So I don’t want to take too long on this, maybe about five minutes or so just to discuss swing trading and why I do it. So, first of all, what is swing trading? So I put a little bit of a chart together. Here you go. So this is an example. So swing trading is basically when you hold positions for longer than one day. Okay. So you do need more patients with this, but it will allow you to catch a longer trade. So you can see this trade here. It think has dollar CAD, um, was entered on the momentum trigger where the arrow is in the bottom of the indicator there and it lost over a month. So just over a month, a month and three days. So that’s their daily candles there. And, uh, if you manage to, and you can stay in this trade for a long period of time, it enables you to get more money out of demand.

The pros and cons of swing trading

The pros and cons of swing trading. So there’s a lot of these, you’re going to have to bear with me so overnight risk. So this is the problem with between trading. So anything can happen while you’re asleep. You don’t know, like, let’s say for example, you’re in Apple earnings or your Facebook or your trading. I don’t know, let’s say BP or shell or something in the footsie 100, there could be a company announcement the next day that you are not expecting. Okay. So like maybe a mine’s closed down. Maybe there’s a drill disaster, you know, and this is a problem with holding swing trades. Uh, there is a lot of risks there. Of course you have stop-losses losses in there, but you are subject to gaps. So when things gap up and gap down, but this is why you need to spread the risk between a few companies.
If you are overly exposed to just one company, then that can happen in FX. This doesn’t really happen overnight risk in terms of gapping, but there can be news-related risks. So like an economic event, you know, an election, you know, Donald, Trump’s saying something stupid on Twitter. You know, now we’ve got Joe Biden, is it him? So this could be any president or any finance minister or any central banker. Anybody could say anything at any time. So that’s why you’ve got overnight risks. So that is a bit of an issue. And you just have to accept it really when you’re trading, not making daily gains. So a lot of people do like the fact, the fact that, Oh, okay, I’ve made my days profit today, or I’m aiming for 100 pounds today. You can’t do that. Really. When you’re swing trading, you have to think of your profits monthly or quarterly or something like that, or even yearly depending on, on how you trade and what your idea of trading is.

Uh, so, so not making daily gains is, is an issue, but it’s not really a problem for me. Uh, I, I, you know, pay myself quarterly and look at my book quarterly. And, you know, there are some, you know, months which are down, but then it enables me to catch up some months or whatever. So, uh, so you know, people do have daily risk targets and, you know, and sometimes that can be a bit of a problem for people to get their head round. The next one is obviously it can be slightly boring. So if you’re in a good position relatively, the more money you’re making, the longer you’re in that position. Okay. I’ve got an example later on of the NASDAQ, a swing trade on the NASDAQ. I entered a few times this year, uh, and, uh, you know, it was, it was a very long trade and you know, you sit there, you’re doing nothing while making money effectively, but where the value comes in is, you know, is, can you handle that?

You know, what are you doing in the meantime now, obviously this is good. If you’re like working or you’ve got children or something like that, obviously it’s a really, really positive thing. The fact that it can be boring because you need to fill yourself your time up with other things. But, you know, for, if you, if you’re a swing trader, you need to get used to that. It’s not all like action and adventure, like it is day trading sometimes. So, uh, sometimes you need to do that. This is what I see as a positive, less time sprint at the screen. So, you know, it’s probably better for your health a little bit. You’re not staring at the screen all day, you know, um, also it’s not too impactful on your stress levels. So, so that is a real world. Good positive. Now it takes longer to make money per trade.

So like in that example previously, uh, dollar CAD, yes, you would be making money while you’re in the trade. Uh, but of course you would be in that trade for a month. So you’ve got to realize that you’re not going to make a, you know, a day’s worth of money, a week’s worth of money or whatever. Sometimes these trades take, uh, take a bit of time to come to fruition. Now, this is a big thing. For some people you need more margin in your account. So with brokers like IgG or LCG or XTB, whoever it is, you’re using sack. So you, you need to have a certain amount of money in your account to swing trade. Now I know a lot of these brokers and people that work in these brokerages and incidentally not we’re trading college with these brokers, the people who swing trade generally make more or more successful traders.

Yeah. So, uh, did, this is a couple of reasons, maybe if you have more money in your account, you know, you’re, you can, it’s a different psychology of a trader. So maybe they are understanding a little bit more of the risk or they take, they can afford to take less risk. But at the end of the day, if you’re holding like four or five trades and they’re swing trades or three trades in the swing trades, it does eat up in the margin in your account. So it’s, it’s kind of like an opportunity cost. So let’s go and look at some other points. So, and this is a key one. So more time to do what you want. Freedom. So if you are a good swing trader, like I’ve got, you know, one of the guys on my mentorship who, who travels. So he goes around and does whatever he needs to do, goes to other countries and things like that.

But he holds on to his positions for quite a long time. And that’s the good part is the freedom. As long as you can come back to check your trades and move your stop losses and move your target profits and compound, if you need to compound every so often, that’s all you need to do. You know, I’m not saying that you’re going to make money for looking at your screen for one hour a day, that, you know, I’m not saying that you need to do a bit of work, but you, you do have more freedom and more time to do things that you would want to do. Whereas if you’re day trading, you’re spending a lot more time at your screen and you can’t do that. So this is, as I promised, one of the NASDAQ trades that we looked at. So, uh, it’s, it’s a really, really beautiful uptrend.

And what I’ve done is I’ve circled the points of where we have momentum triggers on our proprietary storyteller indicator. Cause that’s the one that I use. So you can see here on three different occasions, the momentum trigger turned up and that’s led to three good trades, three long trades, three buying trades here. Now the first one, admittedly, I won’t really take, unless it moves above the moving averages and the moving average has turned green. So that’s that one a is a bit, uh, you could have taken it then, but I prefer to wait for the price to get above the moving averages to take the trade. And that one was in four months. Okay. In between that time, I had a couple more positions. So I took some profit out of the market. I added some more, more profit into the market. Um, and, and I ran that trade for a very long time.

Now on the, on the other end of the scale, you’ve got two more arrows there on the storyteller indicator and two circles, which are also pretty good long trades. The one at the end, uh, incidentally, I’m still in right now. So, uh, so these are just good examples of how, if you relax and take your time and you know, you’re a bit more Zen than the day traders, uh, how it can benefit you. And, uh, these trades, you never know when these trends are going to end, so you could be in them for a seriously long time. It’d be making some really good money while you’re in some of these trends. So, uh, that’s that there? So for the conclusion, cause I don’t want to ramble on about swing trading too much, uh, is the probabilities of your trades are still the same. There’s no different really in swing trading and day trading, as long as you’ve got a good system, you know, we look at the PTs system and we look at momentum triggers.

Uh, we’ve got a few other systems that we look at, uh, that we, we talk about with our, with our guys who are on the pro trading program and also on the mentorship. And, uh, we teach them the systems and the probabilities of them are still the same. There’s just a bit of a difference in terms of how you hold them. Trends can be a lot nicer on a longer term than they can be on a shorter term. So I think on my next one here is it’s less volatile due to the intraday noise. So in the intraday you get like lots of fundamental announcements, economic announcements, lots of news that could spike you in and out of the market. It’s less likely for that to happen on the higher term timeframes, the trends are smoother. You can stay in them for longer. The market flows a bit nicer.

Whereas on the intraday, you could have a perfectly good day. You could, you could basically know that the market’s going to go up and place a long trade or buying trade and get spiked out before it happens. That’s less likely to happen on a higher timeframe. Also it’s more suited to trading stocks and commodities or stocks and shares and commodities basically because they trend a lot nicer than the FX markets, the FX markets, um, you know, they, they whipsaw around a little bit more. There’s a lot more to them, uh, where, you know, whereas in the stock markets, you know, if you’re, if we’re talking about Apple, you use only buy or sell. Whereas in FX markets, you know, you’ve got Euro buying and selling your dollar buying and selling in your a dollar. So it’s a bit different. Uh, stocks can keep going for a long period of time, more free time.

That’s a big thing, right? So you’d need your free time to do things that you want to do and to carry on with going about your life. Um, whether it’s, whether it’s work, whether you have kids, whether you have to look after family members, whatever it is, you have more free time to do what you need to do. If you’re a swing trader, it doesn’t mean that, you know, it’s less, uh, it’s any less difficult or more difficult swing trading. It depends on your personality. You need to be able to relax and sit into trades, uh, and manage the risks that you have on the table for a longer period of time. And that’s the hard part. Really, if you want any more information, you know, obviously you can get in contact with us. So I’m on Twitter as well. So mine’s Raj FX, 10, we’ve got, uh, trading college. So T college on Twitter at T college. So please follow us there. And obviously you can click on the links underneath this video, uh, to try and get in contact with us, but please get in contact if you have any questions. And I hope to hear from you soon.

 

An Introduction to Swing Trading for Beginners.

If you are new to trading, you will have probably come across all the different trading terminology and might feel a little overwhelmed.

As a novice trader, you will be researching and learning about the different types of trading including day trading and swing trading and finding out whether trading is right for you.

Traders come from all walks of life and have individual, various commitments. It’s essential to find a trading style that fits around your current work and life responsibilities. Our students come from various backgrounds, some work full-time, others are stay-at-home parents, but they all manage to fit trading into their schedules because they have chosen a style that suits them.

Swing Trading Explained

Swing Trading or Day Trading

Swing trading is a type of financial trading where trades are held for a medium-long period of time ranging from overnight, a few days to a few weeks.

On the other hand, ‘day trading’ is where you open and close a trade in a single trading day before the markets close. Choosing whether you want to ‘day trade’ or ‘swing trade’ can be dependent on whether you are able to trade all day or have to fit it around your other responsibilities.

Consider your personality and mindset too when choosing a trading style. Some complete beginners may find the fast-paced nature of day trading too intimidating at first; patience is necessary when swing trading, as stocks tend to be held for a longer period of time.

Swing Trading Commitment

If you work full time or have limited time, swing trading is for you because it doesn’t require you to be at your screens all day. Many of our students work full-time jobs and swing trade in the evenings. At Trading College, we hold a ‘Swing Club’ webinar on Monday nights. The aim of this webinar is to expose students to live swing trading with a professional trader and set up trades. On Wednesday evenings, we hold a ‘Q & A’ Session and this is a chance for our students to ask questions about these trades.  This is perfect for those who want to swing trade and it is part of our Pro-Trader and Mentorship Programmes. 

How Does Swing Trading Work?

Swing traders hold onto a trade for a longer period in comparison to ‘day’ and ‘intra-day’ traders; this is to anticipate a larger price move, and therefore increase your potential to earn higher profits. Swing traders base their decisions on technical analysis and price action and this can bring in a great deal of profits. Technical analysis is used to analyse price trends and patterns and look for trades and short-term price momentum. With swing trading, it is assumed that there will be a larger price range and price movement. Swing trading can carry more risk due to trades being open overnight, therefore usually it is best to place smaller trades (have your position size smaller) to reduce your risk.

How to Start Swing Trading?

 

Firstly, you will need to learn how to use technical analysis and read your charts. You can learn more about it here. Next, you should learn to understand your time frames in your charts. Once you have gathered an understanding of this, you will be looking at indicators and how to use them to read your charts.

Finally, you will move on to risk management, position sizing and should learn how to identify a market trend. Once you have a further understanding of swing trading, you will be looking at what strategy to use. Ensure you pick a strategy and stick to it to see consistent results; do not move onto your next strategy until you have fully understood and implemented your current strategy and seen profits.  

Have we gone into unknown territory now? We are here to help!

As with any type of trading, patience is a virtue. It is essential that you do not go in blindly but that you receive a good trading education to help you set realistic expectations and goals.

If you would like to learn how to swing trade and be in a community of traders who will be able to support you, take a look at our Pro-Trader Programme.

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