Swing Trading Strategies
Capture multi-day price swings with less screen time and reduced stress
Proven Swing Trading Strategies
Trend Following Swing
Trade pullbacks in established trends
Setup Process:
- 1.Identify strong trend on daily chart
- 2.Wait for pullback to moving average or support
- 3.Look for reversal candle pattern
- 4.Enter on confirmation with stop below swing low
- 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
Setup Process:
- 1.Identify consolidation pattern (triangle, flag, range)
- 2.Set alert at resistance level
- 3.Enter on breakout with volume confirmation
- 4.Stop loss below breakout level
- 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
Setup Process:
- 1.Identify major support/resistance on weekly chart
- 2.Wait for price to approach level
- 3.Look for rejection with reversal pattern
- 4.Enter on bounce confirmation
- 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
Setup Process:
- 1.Use 20/50 or 50/200 MA combination
- 2.Wait for crossover with price confirmation
- 3.Enter on pullback to faster MA
- 4.Stop below slower MA
- 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
Setup Process:
- 1.Screen for stocks up >20% on volume
- 2.Wait for first pullback (3-5 days)
- 3.Look for tight consolidation
- 4.Enter on volume surge
- 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
Setup Process:
- 1.Identify overextended moves (>3 ATR from MA)
- 2.Wait for exhaustion signs (doji, divergence)
- 3.Enter on reversal confirmation
- 4.Tight stop beyond extreme
- 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