Swing Trading

Writen by Thomas Morva

Swing trading is a trading style where a stock is held for a period ranging from a few days to 2 or 3 weeks. Beginners in the stock market usually employ this style, although intermediate and advanced traders may also gain from it. Swing trading depends on the weekly or monthly fluctuations in stock prices. Monitoring short-term variations in the market must trade in this style, because the trader must be quick to react. Traders employing swing trading do not depend on the fundamental value of stocks; rather they stress price patterns and short-term momentum.

Swing trading lies somewhere between day trading and trend trading. In day trading, the trader holds on to a stock for a time period ranging from a few minutes to few hours. However, he does not hold the stock for more than a day. A trend trader, on the other hand, analyzes the fundamental trend of the stock, and may hold it for weeks or months. Swing traders do not wait for the prices to reach rock bottom while purchasing or for the highest prices while selling. Instead, they capitalize on the short-term movements in the stock market. Persons involved in swing trading do not face competition from big traders.

A person seeking success through swing trading must learn to pick the right stocks. The right stocks usually include the ones belonging to blue-chip companies. These stocks tend to swing between extreme values. A swing trader follows a stock for a couple of days during the upward swing. During the stock's downward journey, the trader simply switches over to another rising stock. Swing trading is most profitable when the markets are stable. It is during this period that the stocks display a general pattern of rising and declining within a time span of few days. In more unstable markets, stocks do not exhibit any expected oscillating patterns. They are either in rising mode or in falling mode, with less fluctuation. When those are the market conditions, swing trading is not a profitable option.

Swing Trading provides detailed information on Swing Trading, Swing Trading Strategy, Swing Stock Trading, Swing Trading Systems and more. Swing Trading is affiliated with Option Stock Trading.

Crude Oil Amp Unleaded Gas As Predicted Big Gains Amp More To Come

Writen by Sacha Tarkovsky

These markets have exploded to the upside today as we thought ( see previous articles) and traders who took the stochastic crossover have fantastic gains on the day.

Can this market continue its upward momentum? Let's look at the trade in more detail.

Low risk and high reward trade

This market was trading near support, so it was a great place to enter if you were bullish, as the contracts were trading right at key nearby support.

While we said traders could enter at the support level, we waited for the stochastic crossover to confirm the move.

One of the most important points in trading an upward move is to look for some upward momentum (Even if you think support is going to hold) get confirmation of strength and the stochastic crossover got us the signal and in the market.

Can this market go to new highs?

We don't know and neither does anyone else.

This market is driven by trader psychology more than anything else at present, but if we step back and look at the charts, we can see things with a clearer none emotional perspective.

A break above resistance points to test of the highs

The huge move up is seeing prices right at the middle of the Bollinger band (resistance), if prices can close above this level tonight or near the highs we would stay with the trade.

If prices get past the mid bollinger band odds favour a run to new highs.

It's important here to keep an eye on how the trade finishes on the day and opens tomorrow. Watch for resistance at the mid Bollinger band and stochastic momentum to stay positive.

Note: Stochastics are great timing tool, to get into trades and the bollinger band represents a great way to define resistance, support and objectives. These two tools are a powerful combination when used in conjunction with charts - learn to use them and enhance your trading.

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Make Big Profits Using Currency Trading Systems

Writen by Stephen Todd

Here we will look at how to use currency-trading systems to catch the big profits from the big moves, and how to pick a currency trading system that will be successful.

There are many currency-trading systems for sale, but many don't live up to the hype in the sales literature, but finding one that makes money is easy - if you know what to look for.

Trend Following - The Key to Big Profits

As economic cycles of boom and bust in countries, take years, so do the currency trends that reflect these cycles. The big profits are made by traders who can spot and trade these big trends for big profits.

There is no better way of doing this than using a currency trading system that can lock in, and hold these long-term trends for maximum profitability.

A Mechanical Approach to Profits

Currency trading systems remove the emotional component from trading - they don't care why currencies move they just attempt to make a profit when they do!

Many traders have a problem with emotions when trading, rather than running profits and cutting loses, they snatch profits early (simply to bank a profit) and run losses (as they hope they will turn around) and of course, this strategy will lead to losses over the longer term.

A trading system gives you discipline, which is vital to trading success.

Don't underestimate the effect of a lack of discipline - it's the major reason traders lose!

The Growth in Computerized Trading

The developments in computer software, and the rise in popularity of the Internet, have seen system trading become more popular than ever.

For example, packages such as Tradestation and Supercharts, allow traders to build and test systems using a variety of technical indicators, however today more traders are buying systems that are ready made.

The idea is they load the program, follow the signals, make big profits, and don't have to employ the services of a fund manager.

There are some excellent currency trading systems out there, and the following checklist will help you find one that can make big profits longer term.

Finding a Technical Trading System that Makes Big Profits

Always follow this checklist when buying a currency trading system.

1. Understand the logic of the system - if you don't understand the logic, you won't have the discipline to follow the system. Also, avoid "black box" systems where the logic is not revealed.

2. The system should aim to catch the long-term trends, not short term moves. It's the longer-term trends that make the profits, so buy a system that targets them.

3. Simple systems are best – there's no correlation in currency trading systems, between complexities and making money. A system's rules should easily be understood, and not require a degree in mathematics!

4. Study drawdown from peak equity and overall profitability over time. Always assume your worst drawdown is ahead of you, and be prepared mentally to take it.

Also be aware of simulated track records that have little drawdown, they probably won't work in practice - anyone can simulate profits with hindsight!

Warning! - Beware of "curve fitting" This is where a simulated track record is produced and the system is then "fitted" to past data to ensure profits. One trader likened this to shooting at a barn door and drawing circles around each shot afterwards to make a bull's-eye.

A clue to a "curve fitted" system is one that has little or no drawdown and huge profits, or has a huge amount of optimization and variables instead of ONE straight set of rules.

5. Don't ignore simulations totally; if the logic is soundly based, they may work, and many do.

6. Get to know the vendor selling the system - ask as many questions as you can, and check out his record, and philosophy of trading.

Make sure you feel comfortable in the system and the support you will receive before buying.

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