It can help if you follow market directions, which means you must favor stocks with rising values. Using a stock screener can also be effective, which will make your life a lot easier. Further, you must also consider factors like sector performance and liquidity.
Ready to take your swing trading strategies to the next level? Read on and let’s talk about some of the best things you can do.
What are Popular Swing Trading Strategies?
To help you find swing trading opportunities, one of the most popular strategies is the Fibonacci retracement. This is what will help you determine support and resistance. In turn, you can also determine the possibility of a reversal.
More so, you can also use a simple moving average. It is effective in the identification of a stock’s long-term trajectory. Using this strategy requires calculating the average prices within a certain number or period.
A crucial element in using the simple moving average is the number of days or trades to use. In most cases, you can have success using 10 or 20-day simple moving averages.
The MACD cross-over is another strategy worth looking at. It stands for Moving Average Convergence Divergence. The goal is to show the relationship between two moving averages, which will help identify your next move. Our xBrat Roller Coaster makes this strategy really Simple, check it out HERE.
The Chart below shows the $MSFT Stock for 2023 (Jan – April) with the Roller Coaster indicator added, showing 3 Stocks Swing Trading Opportunities on the 195min timeframe.
Easy Entry Swing Trading Strategies for Beginners
The right timing is one of the many factors that can influence success in swing trading. If you’re too early or too late, you might miss favorable prices. With this, you must be familiar with the easy swing trading strategies you can implement.
One of the things you can do is to set a buy-stop limit order. In a nutshell, it’s all about buying an asset at a pre-determined price. When there’s an open position, you can use your one-cancels-other order to automatically initiate a trade.
Meanwhile, entry during a trade in a bear market is possible by setting a sell-stop limit order. This will let you sell a security short once it hits the price you think is favorable.
More so, if you’re looking for a more specific strategy you can implement, it’s hard to go wrong with the relative strength index. The RSI is a type of momentum indicator, which is a popular technical analysis tool. It evaluates the magnitude and speed of market changes, helping you determine the right timing for market entry.
Using RSI is a great strategy to identify how strong a trend is, as well as the potential for change. You can determine when the price is at the bottom, which can give you an idea of when to buy and enter the market. The best time to buy is when the stock is at oversold levels.
Effective Stock Swing Trading Strategies
In learning how to find swing trade stocks, you can rely on the most effective trading strategies. Over time, these strategies have proven to be profitable when done right.
One thing you might want to consider is the breakout swing strategy. A breakout happens when a price is above a defined range, which means it broke above resistance. In this strategy, the goal is to open a position early during the uptrend.
More so, you can also consider the fading trading strategy. As the name implies, it’s a counter-trend, so you will trade against the momentum. The premise is to take advantage of a reversal and possibly make a profit once the situation reverses.
Lastly, you can also use volatility indicators, such as Bollinger bands. It requires measuring the potential price movement of a stock. As a result, you can choose to invest in more volatile stocks. This can provide a better opportunity for setting your profits and stops.
Top Options Swing Trading Strategies
In the same way that you should know how to find swing trade stocks, you must be equally thorough in finding options. Like stocks, options can be promising investments, but you need the right strategy.
Are you interested in buying call options? If you need a refresher, call options are contracts between buyers and sellers. It necessitates purchasing a certain asset at a certain price before reaching the expiration.
To buy call options, you should look for a bullish trend. This can be easy by looking for higher highs and higher lows. Evaluating the volatility can also help you decide what to buy during a bullish market.
Further, one of the most effective option swing trading strategies is to determine the right strike price. Most conservative investors will choose the same or lower stock price. On the other hand, those who are more risk-averse will pick a higher price.
Swing Trading Strategies that Work for All Levels
Whether you’re a newbie or a seasoned investor, you must learn how to find swing trade stocks. This will let you screen all options, and find one with the most potential for profit. To do such, you must implement the right trading strategies.
Among others, one that can be effective is mean reversion. In its simplest sense, it shows that extreme events will most likely be followed by normal situations. This means that things will even out over time.
Momentum trading is another strategy that can work for traders of all levels. Instead of assuming that the market will revert, you believe that the market will keep its momentum. Meaning, if the prices are rising, they will continue doing so.
Lastly, you can also implement passive trade management. Under this strategy, you’ll wait until reaching your target profit or stop loss. If the market is in between, then you won’t do anything.