What is Swing Trade? Operational skills, trading strategies and beginner teaching-web3.0-php.cn

Swing Trade is a medium-term operation strategy between fluctuations and long-term investment, and uses technical analysis to capture market volatility to make profits.

Compared to the need to watch the market throughout the market when rushing, or long-term holding requires to withstand huge fluctuations, swing trading is more flexible, and the investment cycle is usually several days to several weeks.

This article will take you to understand what swing trading is and the differences from other investment methods, and analyze the four common swing trading strategies and practical operation techniques.

Whether you are a stock market, forex or cryptocurrency investor, you can find the right method and high-end application that suits you.

What is Swing Trade? Operational skills, trading strategies and beginner teaching

What is Swing Trade?

Swing Trade is a common medium-term investment strategy. The core concept is to "grasp the main paragraphs of price fluctuations" and enter and exit the market through technical analysis and trend judgment.

Unlike when the market is required to be watched all day, or long-term investment takes months or even years to hold, the cycle of swing trading usually falls from days to weeks .

It can not only avoid the pressure of high-frequency operation, but also be more flexible in responding to market changes than long-term holding.

Therefore, many investors regard band operation as an investment method that takes into account both risk and efficiency.

Swift trading vs. Flash vs. Long-term investment

Day Trade : The trading time is extremely short, usually completed within minutes to hours, and it requires extremely high technical response and market-oriented capabilities.
Long-term investment (Buy and Hold) : Holding time is often months to years, and the kernel is fundamental analysis and patiently withstand market fluctuations.
Swing Trade : Between the two, using the medium-term trend of prices, you don’t need to keep a close eye on the market like you are in a blast, nor do you need to endure long-term floating losses like long-term investment.

Operation cycle and characteristics of swing trading

The biggest feature of swing trading is "follow the trend" : Once you grasp the trend, you can make profits from a whole market in a few days or weeks.

This method is relatively friendly to office workers and novice investors who don’t have much time to watch the market.

Common operating cycles are:

Entry : Buy based on support, resistance or technical pointers.
Hold : Wait for the trend to develop, and do not need to enter and exit frequently.
Appearance : At the end of the trend or reach the default target price to make a profit.

In other words, swing trading is a strategy of "for patience for efficiency", which not only reduces over-trading, but also improves the winning rate through technical analysis.

As mentioned above, swing traders focus on grasping market trends and market trends, because as long as they catch the right one, they can make a profit.

The following figure shows the trend of the S&P500 index in a certain year. The part that is framed along the way is the " upward trend ". Swave traders hope to grasp these buying points through technical analysis and trend analysis and then make profits.

What is Swing Trade? Operational skills, trading strategies and beginner teaching

Learn swing trading from the trend of SPX 500

Complete analysis of swing trading strategies

The core of swing trading is to "go with the trend", that is, to make profits by taking advantage of the market's main price fluctuations.

According to different market trends, the commonly used wave trading strategies by investors can be roughly divided into four types: breakout/fall, consolidation range, reversal, and retracement.

The following are analyzed one by one and matched with cases to help you understand quickly.

Breakthrough/breakthrough strategy (right trading application)

When the market price fluctuates in a certain range for a long time, once it "breaks through" the resistance level upward or "falls below" the support level downward, it often means the beginning of a new trend.

Take S&P500 as an example. The original price fluctuates back and forth within a range, but in the black area, the K-bars for several consecutive trading days broke through the resistance line, and then an upward trend was formed.

Therefore, the wave trader will enter the market at the breakout point (black box part) and will not appear until the trend ends.

Be careful of "false breakthroughs", such as breaking through the resistance briefly but falling back to the original range the next day. In this case, you should wait until the trend is confirmed before taking action.

For example, in the figure below, you can see a " false breakthrough " on the left, which means that the K-bar with only one trading day breaks through the resistance. The next day, a red K-bar immediately fell back to the resistance again, which means that the price is still fluctuating in the consolidation range.

This method is suitable for investors who are accustomed to "right-side trading" and reduce judgment errors by confirming the trend.

What is Swing Trade? Operational skills, trading strategies and beginner teaching

Breakthrough/breakthrough strategy (right trading application)

Consolidation range operation (support and resistance application)

But it does not mean that swing traders cannot make profits when they encounter volatile markets. Let’s continue to look at the second example.

When the market is in a volatile market, it means that the price will swing back and forth between the resistance line and the support line.

As mentioned earlier, swing trading is also called swing trading, and the reason is that it can make profits through trading methods such as oscillating range prices .

The following figure shows the trend of a certain range of Bitcoin BTC, where the support line is the bottom of the first decline, that is, 33,345; and the resistance line is the price high point that rebounds from the bottom, which is 38,903.

Swave traders can buy when the price is close to the support line (33,345) and sell when the price is close to the resistance line (38,903). This method can make round-trip profits in the consolidation market.

The profit margin of this method is limited by the size of the consolidation range, but it is relatively easy to judge and is very suitable for novices.

However, since the profit margin is limited by the range size, once the range is broken, the strategy needs to be immediately converted to a "breakthrough/breakdown" operation.

Because this method is relatively intuitive in judgment, it is very suitable for beginners to start band operations.

What is Swing Trade? Operational skills, trading strategies and beginner teaching

Consolidation range operation (support and resistance application)

Operation skills for reversing the market

Reversal means that the price changes from one trend to another. For example, it was originally an upward market, but after "reversal", it becomes a downward market.

Judging the reversal point requires accumulation of experience, which is relatively risky and difficult to implement.

My advice is that swing traders can wait until the trend is confirmed and then enter the market.

Although this will make less profits in the previous period, the risk will be relatively small (that is, the trading principle on the right is to enter the market when it rises and sell when it falls).

The gold trend in the following figure is an example. It was originally an upward trend, but we can find a red K-bar above, and there are many K-bars with upper and lower shadows, implying that the upward momentum is slowing down.

Then we can see that several big red K rods appeared in succession, establishing a downward trend, so that we can enter the market and short sell gold at this time.

However, when using this strategy, judging the reversal point requires experience. Entering the market too early may miss profits. It is recommended to wait until the trend is clear before operation.

Suitable for high-end investors, able to withstand certain risks and be familiar with technical analysis.

What is Swing Trade? Operational skills, trading strategies and beginner teaching

Operation skills for reversing the market

In-and-out judgment of retracement increase

Pullback refers to a small trend in which the market temporarily fluctuates in the main trend.

Although unlike a reversal, it will completely change the trend, it can provide opportunities to increase or re-enter.

The following figure also takes gold as an example. After the downward trend is established, it encounters a price pullback.

First of all, we need to determine the position of the resistance line. We can use the retracement point of the last upward trend and the breakthrough point of the downward trend as the resistance line.

Then this wave of gold price retracement is quite possible until this resistance line and then it will continue to fall, so we can place short positions at the resistance line and continue to make profits from the decline.

If a short order has been set in the third strategy, it can be regarded as an additional increase point!

The advantage of this strategy is that it can increase its investment in the middle of the trend and increase overall profits; but if misjudgment is made, it may lead to increased losses.

Suitable for investors who have certain trading experience and know how to strictly set stop loss.

What is Swing Trade? Operational skills, trading strategies and beginner teaching

In-and-out judgment of retracement increase

Overall, the four major strategies of swing trading have their own characteristics:

Breakthrough/breakdown : Suitable for investors who like to follow the trend, but be wary of false breakthroughs;
Consolidation range : most friendly to novices and can operate repeatedly in volatile markets;
Reversal : The risk is high and requires more experience and judgment;
Retracement : This is a high-end usage, which can increase profits in the middle of the trend.

The following table organizes the kernel concepts, application methods, cases, suitable objects and risk reminders of the four major strategies, so that you can quickly compare:

Policy name	Kernel concept	Application method	Case description	Suitable for the object	Risk warning
Breakthrough/fall	Prices break through resistance or fall below support, which means new trends are formed	Wait for the K-line to stand firmly above resistance/support before entering the market	After the S&P500 index breaks through the previous high, enter the market and follow the trend.	Right-side traders who like to follow the trend	"False Breakthrough" is required, and it is recommended to confirm the trend before operating
Consolidation range	Price fluctuates between support and resistance	Buy near support level, sell near resistance level	When Bitcoin fluctuates between 33,000 and 39,000, buy low and sell high	Newbie investors like simple and clear operations	Profit space is limited by the size of the range, and the strategy needs to be changed once it breaks through.
Reversal	The trend ends and develops in reverse	K-line type or RSI overheating determines the kinetic energy becomes weak	After the gold rise ends, a continuous large negative line appears → judge the market reversal	High-end investors, good at technical analysis	Misjudgment and reversal are at high risk, and experience is required
Retreat	A small fluctuation temporarily reversed in the trend	Increase or enter the market when the retracement is close to support/resistance	Gold rebounds to resistance in a downward trend and then shorts	Experienced people know how to set stop loss	If the retracement is misjudged, it may increase losses

Comparison table of four major strategies for swing trading

Swave trading operation skills and tools

To successfully conduct swing trading, in addition to understanding the strategy itself, you also need to master the correct analysis skills and operation tools.

The following will introduce three key points: the judgment of support and resistance, the application of common technical pointers, and the operational errors that are most likely to be ignored by novices.

Judgment of support and resistance

Support and resistance are the basic concepts of swing trading.

Support level : During the decline, the price will often stop falling and rebound at a certain position, which is the support.
Resistance level : On the contrary, when the price rises to a certain point and cannot break through and falls back many times, this position is resistance.

In actual operation, swing traders will use historical trends to observe which points the price has "stayed" and use this to judge the entry and exit positions.

For example, Bitcoin rebounded multiple times at $33,000, and investors would regard this as a support level and would be suitable for buying.

But I’ll remind you that support and resistance are not absolutely accurate numbers, but "range ranges" that require flexible judgment.

Commonly used technical pointers and applications

In addition to support and resistance, technical pointers can help investors grasp the trend more accurately.

Common swing trading tools include:

Moving average (MA) : is used to observe long-term and short-term trends. When the short-term moving average breaks through the long-term moving average, it is usually a buy signal.
RSI (relative strength pointer) : When RSI is above 70, it means that the market may be overheated; if it is below 30, it may be oversold.
Bollinger Bands : used to judge the volatility range. When the price touches the upper or lower rail, it may rebound or pullback.
Fibonacci Retracement : used to measure the retracement amplitude and help determine the potential reversal area.

For example, when the stock price rebounds on the lower track of the Boolean channel and the RSI is in the low-end oversold range, you can judge the "time of entry" with more confidence.

Common errors in swing trading and risk control methods

Many newbies make some typical mistakes when trading in swings:

Overtrading : Frequent entry and exit not only increases the handling fee, but is also easily washed away by fake actions in the market.
Ignore stop loss : Once the market reverses, failure to set a stop loss may lead to serious losses.
Single pointer dependency : making decisions when looking at just one technical pointer, which is easy to misjudgment.

The correct way to do it is:

Set "stop loss points" and "stop profit points" before each entry.
Cross-verification with at least two or more technical tools.
Stay patient and do not panic and adjust your strategy due to short-term fluctuations.

To achieve swing trading more successfully, the essence of it lies in "grasping the big but not the small", and not being led by those very fine rises and falls.

Comparison of advantages and disadvantages of swing trading

Although swing trading is both flexible and efficient, it is not without risks.

The following sorts out common pros and cons to help you quickly grasp the characteristics of this strategy:

advantage

The trading pressure is less : the position is longer than the time of the rush, so there is no need to keep an eye on the market all the time, and it is relatively friendly to novices.
The technical threshold is low : there is no need to pursue instantaneous reaction power, just master the basic technical analysis to get started.
Low time cost : Usually profit is settled after the trend is over, and there is no need to wait for a long time.
Lower transaction costs : Compared with frequent in and outflows, band operations can reduce handling fees.

shortcoming

Overnight risk : If you hold a position for more than one day, you may encounter sudden news during the market closure, resulting in a price gap.
News interference : Sudden market news may disrupt the original judgment trend.
Cost is higher than long-term investment : Although it is cheaper than the rush, the number of incoming and outgoing is still more than long-term holdings, and the accumulated cost is relatively high.

Application of swing trading in different markets

Although the core principles of swing trading are consistent, the operating methods in different markets are still different.

Stocks, foreign exchange/futures, and band operations in the cryptocurrency market have different techniques and priorities.

Stock band operation skills

The stock market is the most common wave trading field. Since stocks have the influence of corporate fundamentals and news, investors should also pay attention to financial reports and industrial news in addition to technical analysis.

Application method : When selecting stocks, select stocks with large trading volume and obvious volatility, and use the moving average and support resistance to determine entry and exit.
Features : Suitable for office workers, because band operations usually do not require you to watch the market every day, just grasp the main trends.

Forex and futures trading

The foreign exchange and futures markets have high leverage and all-weather trading characteristics, which are very suitable for band operations.

Application method : Use technical pointers (such as RSI, Boolean channels) to combine macroeconomic data to judge the trend.
Features : Because the market operates almost 24 hours a day, swing traders must set stop loss and stop profits to avoid overnight risks amplifying losses.

For example, after the release of important economic data, EUR/USD often fluctuates significantly, which is the best time for swing trading.

Cryptocurrency Band Trading and Automation Robots

The cryptocurrency market is volatile and is the first choice for many swing traders.

Application method : For example, Pionex band trading robot , which can track currency prices through processes, help users pursue unlimited profits within limited risks, and will automatically stop loss when a certain loss occurs.
Features : High volatility means high risk and high reward, suitable for investors who can withstand large short-term fluctuations.

However, since the fluctuations in the currency market are very fast, it is recommended that novices start practicing from simulation orders or low amounts and gradually accumulate experience.

Whether it is stocks, foreign exchange futures or cryptocurrencies, the core of swing trading is always "grasping the main volatility trend."

However, when investors operate in different markets, they must match the characteristics and tools of the market to effectively control risks and improve their winning rate.

Frequently Asked Questions for Swift Trading

In the process of learning swing trading, investors often have some basic questions.

The following are three most common questions and answer them in table form to quickly grasp the key points.

question	answer	Additional suggestions
Is swing trading suitable for beginners?	Suitable. Swave trading does not require long-term focus on the market like being a rush, nor does it require long-term fluctuations like long-term investment, and is more friendly to office workers and novices.	It is recommended to start practicing with "consolidation range operation" and "breakthrough strategy", which has lower risks.
How much money does it take to do a band?	There is no fixed threshold, depending on the market and product. Stocks usually cost more than tens of thousands of yuan, and cryptocurrencies or foreign exchange can start with small amounts.	Beginners can first use simulation accounts or low-cost tests, and then increase their funds after establishing a strategy.
Which rate of return is better, swing trading or long-term investment?	There is no absolute advantage in the rate of return, it depends on the market conditions and the investor's operating ability. The band can quickly make profits, but skills are required; long-term investment focuses on time and compound interest.	If you want to take into account stability and flexibility, you can use the combination method of "long-term investment of part of the kernel to make waves".

Conclusion: Why choose swing trading?

Swift trading is an investment method that combines flexibility and efficiency. It does not require a long-term focus on the market like when you are on the rush, nor does it have to bear the long-term pressure of floating losses like long-term investment.

For most investors, swing trading strategies can balance risk and reward, seize the main market segments through technical analysis, and improve profit opportunities.

Whether you are a stock investor, foreign exchange operator, or cryptocurrency trader, band operation Jiaozuo can become your investment strategy pocket list.

It is recommended that novices start with simple "consolidation range" and "breakthrough strategy", gradually create judgment, and further try reversal and retracement operations.

Here is the article about what is Swing Trade? This is the article about operation skills, trading strategies and beginner teaching for beginners. For more complete related band trading strategies, please search for previous articles on this site or continue browsing the related articles below. I hope everyone will support this site in the future!

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