Swing trading is based on the analysis of fluctuations in stocks, commodities and currencies that last for several days. A swing trader’s trade can take up to several months. Unlike an intraday trader, a swing trader is unlikely to spend full time trading.
Anyone with ideas and investment capital can try swing trading. Due to the longer timeframe (1 hour, 4 hours, 1 day), the swing trader does not need to be glued to their computer screen all day. He may even concentrate entirely on another kind of employment.
Keeping an open position for several days or weeks can lead to higher profits than trading the same security several times a day.
Since swing trading is rarely a full-time job, the likelihood of overwork due to stress is much lower. There is time to do other things, to keep the nerves and energy healthy.
Swing trading can be carried out through a simple computer or smartphone with an installed brokerage terminal. There are no high requirements for connection speed and advanced technological solutions.
Swing traders usually have a steady job or other source of income from which they can offset or reduce trading losses.
As with any trading style, swing trading can also lead to significant losses. Since swing traders hold their positions longer than intraday traders, they also risk larger losses. Especially the risk of losses increases due to holding the position every other day.
Swing traders rarely enter at the best prices. Checking the chart 1–2 times a day, they are content with what the market has to offer at the time of opening a position.
Increased waiting time for a signal to enter a position. If scalpers receive signals as often as an annoying cat meows, then swingers can wait for the setup day after day.