When Swing Trading Makes the Most Sense
A flexible range of skills will help you to leverage various price movements. If you’re already day trading for certain price conditions, you’ll find swing trading ideal for other scenarios. The core idea behind it is more time. Swing traders hold their trades for more than 24 hours. Holding an asset for days to weeks is the objective. Here are some conditions that are ideal for swing trading in:
When You Have a Full-Time Job
A competent investor only needs to place in their orders once a week. If you have to manage a full-time job, trying to day trade is risky. Day trading requires your full attention. In it, a single distraction could cost you more than you anticipated. Swing trading, since the markets stop on the weekends, can be done when you’re not at your “j-o-b.” You don’t have to rush. By holding your position longer, you get more time to analyze risk and to dictate your targets.
If you don’t have uninterrupted seconds to day trade with, consider swinging your positions.
When the Market is Trading Wide Margins
The margins are wide when support or resistance is distant from each other. Ideally, your stop loss, which is the amount that you set as your risk, can be based on support and resistance. When those levels are distant, they force investors to widen their stop losses. You can still manage your risk, but distance and time are almost equal in the market. Swing your positions when you’re trading wide margins. Expect to hold on a little longer.
When the Profit Target is Bold
Investors that want to hit a 10 dollar or 50-pip-price target have to enter their positions and then walk away. You won’t find an “in-and-out” position if you’re gunning for a large rally. Large profit targets consume more time the farther they’re forced to go. Unlike a day trader—who is an investor looking for a .10-cent move—swing traders hold positions that could see an entire market shift. Consider swing trading when aiming for larger profits—from just a single trade.
About The Author
Jason Bond is a Professional Trader, Entrepreneur, and Founder of the popular swing trading program, Jason Bond Picks. He originally became interested in stock trading after finding success with the help of fellow trader, Jeff Bishop. Together, they launched the well-known trading program, Raging Bull Trading, in 2010, as a way to help other traders find success in the stock market. Today, Jason Bond remains at Raging Bull as a trader and educator, where he also offers his program, Jason Bond Picks.