Swing Trading Strategies

Capture multi-day price swings with less screen time and reduced stress

2-20
Days Holding
30min
Daily Time
5-20%
Target Gains
No PDT
Rule Exempt

Proven Swing Trading Strategies

Trend Following Swing

Trade pullbacks in established trends

4H to Daily charts

Setup Process:

  1. 1.Identify strong trend on daily chart
  2. 2.Wait for pullback to moving average or support
  3. 3.Look for reversal candle pattern
  4. 4.Enter on confirmation with stop below swing low
  5. 5.Target previous high or measured move

Performance Metrics:

  • Hold Time:3-10 days
  • Win Rate:45-55%
  • Risk/Reward:1:2 to 1:4

Breakout Swing Trading

Trade breakouts from consolidation patterns

Daily charts

Setup Process:

  1. 1.Identify consolidation pattern (triangle, flag, range)
  2. 2.Set alert at resistance level
  3. 3.Enter on breakout with volume confirmation
  4. 4.Stop loss below breakout level
  5. 5.Target based on pattern measurement

Performance Metrics:

  • Hold Time:5-15 days
  • Win Rate:40-50%
  • Risk/Reward:1:3 to 1:5

Support/Resistance Bounce

Trade reversals at key levels

Daily and 4H charts

Setup Process:

  1. 1.Identify major support/resistance on weekly chart
  2. 2.Wait for price to approach level
  3. 3.Look for rejection with reversal pattern
  4. 4.Enter on bounce confirmation
  5. 5.Target opposite level or 50% move

Performance Metrics:

  • Hold Time:2-7 days
  • Win Rate:50-60%
  • Risk/Reward:1:2 to 1:3

Moving Average Crossover

Trade when MAs cross and align

Daily charts

Setup Process:

  1. 1.Use 20/50 or 50/200 MA combination
  2. 2.Wait for crossover with price confirmation
  3. 3.Enter on pullback to faster MA
  4. 4.Stop below slower MA
  5. 5.Trail stop with moving average

Performance Metrics:

  • Hold Time:1-4 weeks
  • Win Rate:35-45%
  • Risk/Reward:1:3 to 1:6

Momentum Swing Trading

Trade strong momentum stocks

Daily with weekly confirmation

Setup Process:

  1. 1.Screen for stocks up >20% on volume
  2. 2.Wait for first pullback (3-5 days)
  3. 3.Look for tight consolidation
  4. 4.Enter on volume surge
  5. 5.Use ATR-based stops

Performance Metrics:

  • Hold Time:5-20 days
  • Win Rate:40-50%
  • Risk/Reward:1:3 to 1:5

Mean Reversion Swing

Fade extreme moves for snapback

Daily charts

Setup Process:

  1. 1.Identify overextended moves (>3 ATR from MA)
  2. 2.Wait for exhaustion signs (doji, divergence)
  3. 3.Enter on reversal confirmation
  4. 4.Tight stop beyond extreme
  5. 5.Target mean (20 or 50 MA)

Performance Metrics:

  • Hold Time:2-5 days
  • Win Rate:55-65%
  • Risk/Reward:1:1.5 to 1:2

Essential Swing Trading Indicators

Moving Averages

Trend direction and dynamic support/resistance

20, 50, 200 period

RSI

Overbought/oversold and divergences

14 period, 30/70 levels

MACD

Momentum shifts and trend changes

12, 26, 9 standard

Volume

Confirm breakouts and reversals

20-day average volume

ATR

Stop loss placement and targets

14 period

Fibonacci

Retracement and extension levels

38.2%, 50%, 61.8%

Stock Scanning Criteria

Trend Following

  • Price > 50 MA > 200 MA
  • RSI between 40-60
  • Volume > 500k shares
  • Price pulling back to support

Breakout Candidates

  • Near 52-week high
  • Consolidating 10+ days
  • Decreasing volatility
  • Volume building

Reversal Setups

  • At major support/resistance
  • RSI divergence present
  • Reversal candle pattern
  • Volume spike

Swing Trading Risk Management

Position Sizing

Risk 1-2% of account per trade

Example: $10,000 account = $100-200 risk per trade

Stop Loss Placement

Below support or swing low

Example: Use ATR or percentage-based stops

Maximum Positions

Limit to 3-5 open positions

Example: Avoid overexposure to market risk

Correlation Check

Avoid similar sector positions

Example: Not all tech or all financials

Profit Taking

Scale out at targets

Example: Sell 1/3 at each resistance level

Swing Trader's Daily Routine

Evening Analysis (20-30 min)

  • • Review daily charts of watchlist
  • • Scan for new setups
  • • Set alerts for entry levels
  • • Update stop losses on positions
  • • Journal completed trades

Morning Check (5-10 min)

  • • Check pre-market news
  • • Review overnight gaps
  • • Adjust orders if needed
  • • Set day's alerts
  • • Quick position check

Swing Trading Pros & Cons

Advantages

  • ✓ Less time-intensive than day trading
  • ✓ No PDT rule restrictions
  • ✓ Larger profit potential per trade
  • ✓ Can use stop losses effectively
  • ✓ Works with full-time job
  • ✓ Less stressful than day trading
  • ✓ Captures larger market moves

Disadvantages

  • ✗ Overnight and weekend risk
  • ✗ Gap risk on news/earnings
  • ✗ Requires patience
  • ✗ Fewer trading opportunities
  • ✗ Larger stop losses needed
  • ✗ Market risk exposure
  • ✗ Psychological challenges of holding

Best Markets for Swing Trading

Stocks

Large caps for stability, small caps for volatility

  • • S&P 500 components
  • • Sector ETFs
  • • Growth stocks

Forex

Major pairs for liquidity and trends

  • • EUR/USD, GBP/USD
  • • USD/JPY, AUD/USD
  • • Cross pairs

Crypto

High volatility for larger swings

  • • Bitcoin, Ethereum
  • • Large cap altcoins
  • • DeFi tokens

Start Swing Trading

📊

1. Learn Charts

Master support, resistance, and patterns

📝

2. Paper Trade

Practice for 2-3 months minimum

💰

3. Start Small

Begin with 1-2 positions only

📈

4. Scale Up

Increase size with consistency

Swing Trading Resources