Swing Trading for Beginners 2020
Today we are here to talk about swing trading for beginners, a little introduction to let you know what it is all about. When it comes to trading the markets, whether stocks, crypto, Forex, or otherwise, making a profit can be very challenging. In fact, making money is much harder than losing it.
What this means is that you need to discover a way to trade that actually works for you, something relatively simple that can put money in your pocket. One type of trading that you might want to familiarize yourself with is swing trading.
Swing trading is a special type of trading, and no, it is not the same as day trading. Swing trading involved executing positions over fairly long time frames, anywhere from a few days to a few weeks.
The point of this type of trading is to make a profit when the price of an asset swings up or down. Sure, there is more to it than this, but this is what we are here for today, to provide you with a little swing trading for beginners 2020 guide. Let’s get right to it!
Swing Trading Explained – The Basics
What we want to make clear right from the beginning is that although swing trading might seem a bit intimidating, it is actually quite easy to master. Most people find that due to the long time frames which positions are open for, it’s actually a much more relaxed way to make money in the markets. For those of you who don’t know, the number one goal of swing trading is to identify market trends and trend reversals, and then to capitalize on them.
The reason it is called swing trading is because the number one goal is to make money when the price of something, say a currency pair, swings up or down. In other words, it is all about capitalizing on the reversal of a particular price in order to make a healthy profit. For the most part, pro traders will stick to intermediate or long time frames, sometimes as little as 3 days, and sometimes as much as a full month, or even longer.
Something else that you need to know about this type of trading is that it involves using a variety of technical indicators in order to identify both trends and trend reversal. More often than not, these trend indicators are used to find trends that occur in the previous 3 to 15 periods of trading. The point of this whole exercise is to identify areas of support and resistant, which can then identify trends and possible trend reversals. Keep in mind that swing trading combines various aspects of day trading with position trading, particularly the speed of position trading.
The goal of using these technical indicators is to find both bullish and bearish trends, and then to look for reversal to those trends. Keep in mind that reversals can also be referred to as counter-trends or pullbacks. Once you have identified a reversal, you can then use various methods to find the ideal entry points for positions. It’s all about entering a trend right before a reversal, and then to capitalize on said reversal.
The 4 Benefits of Swing Trading
Now, you might be wondering why you would engage in swing trading, as opposed to something like day trading. Well, the fact of the matter is that there are a few key benefits to this type of trading that you might not know about.
No Wasting Time
When it comes to other types of trading, such as day trading, as well as scalping, you have to constantly be paying attention to your positions. You need to be glued to your monitor in the event that something doesn’t go your way. However, this is not the case with swing trading.
Due to the fact that the time frames for these trades are so long, you don’t have to constantly monitor your trades. Yes, you do still want to keep an eye on things, but you don’t need to have your account or trading platform open 24/7.
Simply put, swing trading tends to be much less stressful due to the long time frames, and therefore it’s much easier for beginners to keep track of.
Eliminating Market Noise
Another reason why you might want to consider swing trading as your primary method of making money on the market is because it goes a long way in eliminating market noise. No, it does not get rid of all market noise, but it certainly helps.
For those of you who don’t know, market noise is defined as data, financial news, or minor price movements which can distract investors and traders from the underlying value of an asset. This is not a good thing, and the less noise you suffer from, the better your end result will be.
Less Risk & More Reward
Another thing which many professionals enjoy about this type of trading is the fact that it involves slightly less risk compared to a higher reward. Other types of trading, such as day trading and scalping, although they can bring great rewards, are also quite risky to partake in. However, swing trading is less risky and offers great rewards, thus making it ideal for beginners.
Using Technical Indicators
The other reason why you might want to consider swinging your trades is because it relies solely on technical indicators to put strategies together. Using technical indicators, when used the right way, can be extremely reliable, thus increasing your chances of making a profit.
However, there are many other types of trading out there which rely much more on speculation. Speculation is fine if you are an experienced trader, but not if you are a newbie.
Swing Trading Explained – Final Thoughts
The bottom line is that if done right, swing trading can be a relatively safe, stress free, and low risk way to make decent profits. If you would like to find out more about swing trading, we recommend checking out the Income Mentor Box Day Trading Academy, as well as Andrew’s Trading Channel on YouTube!