Swing Trading

AAA

DEFINITION of 'Swing Trading'

A style of trading that attempts to capture gains in a stock within one to four days. Swing traders use technical analysis to look for stocks with short-term price momentum. These traders aren't interested in the fundamental or intrinsic value of stocks, but rather in their price trends and patterns.

INVESTOPEDIA EXPLAINS 'Swing Trading'

To find situations in which a stock has the extraordinary potential to move in such a short time frame, the trader must act quickly. Therefore, swing trading is mainly used by at-home and day traders. Large institutions trade in sizes too big to move in and out of stocks quickly. The individual trader is able to exploit such short-term stock movements without having to compete with the major traders.

RELATED TERMS
  1. Wide-Ranging Days

    A description of the price range of a stock on a particularly ...
  2. Day Trader

    A investor who attempts to profit by making rapid trades intraday. ...
  3. Profit Taking

    The action of selling stock to cash in on a sharp rise. This ...
  4. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  5. Institutional Investor

    A non-bank person or organization that trades securities in large ...
  6. Stag

    A slang term for short-term speculator. A stag would be equivalent ...
RELATED FAQS
  1. Why is a Turtle Channel important for traders and analysts?

    Like most channel indicators, the turtle channel's importance for traders or market analysts lies in the fact that it is ... Read Full Answer >>
  2. How do I use a Turtle Channel to create a forex trading strategy?

    The turtle channel can easily be used as a trend trading tool and also adapted for swing trading within a trend. The turtle ... Read Full Answer >>
  3. What is the Turtle Channel formula and how is it calculated?

    The turtle channel is intended to circumscribe price in such a way that any breakout from the channel should be a definitive ... Read Full Answer >>
  4. What is a common strategy traders implement when using the Qstick Indicator?

    A common trading strategy traders implement using the Qstick indicator is to try to take advantage of a market reversal signal ... Read Full Answer >>
  5. What are the main strategies traders execute when using ascending channels?

    A channel is basically defined as the space between two roughly parallel trendlines and is often used to denote a trading ... Read Full Answer >>
Related Articles
  1. Trading Strategies

    Introduction To Swing Trading

    This style, between day trading and trend trading, may be a good one for beginners to try.
  2. Trading Strategies

    The Daily Routine Of A Swing Trader

    From pre-market to after hours, see what you need to do to capture gains quickly.
  3. Options & Futures

    Introduction To Swing Charting

    Discover why traders use swing charts, how they construct them and how they use them.
  4. Forex Education

    Understanding Forex Rollover Credits And Debits

    Forex trades are subject to receiving interest or being debited interest if positions are held overnight.
  5. Forex Education

    What Type Of Forex Trader Are You?

    Timing may be the key to uncovering your true strength as a forex trader.
  6. Trading Strategies

    4 Common Active Trading Strategies

    Learn four of the most popular active trading strategies and why active trading isn't limited to professional traders anymore.
  7. Options & Futures

    Money Management Matters In Futures Trading

    Learn how this overlooked area of trading can help improve your gains.
  8. Trading Strategies

    Does Your Personality Match Your Trading Methods?

    Investing has ways to successfully accommodate a variety of personalities. Learn how to align your trading with your traits.
  9. Options & Futures

    Capitalize On False Breakouts In The Danger Zone

    Sometimes you have to be a predator to profit. Find out how to cash in on false breakouts.
  10. Mutual Funds & ETFs

    Surf's Up With Filtered Waves

    With an appropriate filter, you can ride the waters to rising profits.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center