Swing Trading Explained

Swing trading is a type of trading that can be used when spread betting and is true to its name. It is a form of trading that swings between long and short positions to profit.

At its core, the premise is you will go long on a share until you think you have identified a resistance level or price that it won’t go beyond. And at that point you close your position and then swing to a short position.

You may also hear about the concept of swing lows and swing highs – a trader will buy or go long when a swing low has been identified and go short when a swing high has been identified or in the brief example above – a resistance.

Swing trading is less about identifying long-term trends and more about capitalising on volatile markets or share price movements. This tends to entail the opening and closing of positions within days rather than months. It could be be thought of as breaking down overall trends into chunks.

It can essentially be a way of squeezing profit out of share price movements on a short-term basis anywhere from matters to days.

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