What is Swing trading?

Beginner Questions
1

Hi,

Can someone please explain what is swing trading and what indicators we use for it?

Thanks,
Nikunj

2

There is no universally accepted definition of “swing trading”.

Trading is usually categorized by how long, on average, trades remain open. The shortest time-frame trading is called scalping; the longest time-frame trading is called position trading. Between these extremes there are usually about 3 other categories, but different traders have different definitions for these categories.

Here are the categories that I use:

Scalping — trades last from seconds to minutes

Day Trading — trades last from minutes to less than a day

Swing Trading — trades last from a day to a week

Long-term Trading — trades last from a week to a month

Position Trading — trades last from a month to years

Using my definition, any trade you hold overnight, but not more than a week, is a swing trade.

Some traders combine swing trading and long-term trading into one category and call it swing trading. If you use that definition, then swing trades last from one day to one month.

Indicators generally work on any time-frame.

I think you meant to ask, What time-frames should I use to swing trade.

My answer would be 4-hour charts and longer. But, other traders might answer this question differently.

3

Just for comparison, my definitions:
Short term(Scalping) - Minutes to hours
Medium term (Swing) - Days to weeks
Long term (Position) - Months to year or two.

For short term I watch the hourly, then go down to 15 or 5 minute charts.
For Medium term I watch the daily, then 3hr chart, then 1 hr, and maybe 15 minute for better entry
for Long term I would watch the yearly, monthly and then daily for entry, maybe using the hourly for better entries.

I don’t do Long term/position trading however. Scalping in Clints definition I get eaten alive.

4

Thank you Clint !

5

I just read this from some website explaining something else, but it makes sense, and I thought of this thread… It was something like:
"A swing trade is when the market goes from a bull market, to a bear market or vise verse. From higher highs and higher lows to lower highs and lower lows, or vise verse. "

6

I wouldn’t say that is particularly descriptive as you can find similar bull to bear patterns on intraday timeframes.

Trade what one feels comfortable with and forget the terms. Scalper, intraday, swing, position are all arbitrary terms.

Don’t let this become another “is forex gambling” thread.

7

I Swing trader refers to the length of time you hold a trade. A medium length, which is usually over couple of days could be considered a swing trader.

8

My time frame from swing trading…

  • Holding a position overnight up to a few weeks.

Other time frames for me…

  • Scalping - few seconds up to a few minutes (need special commission rates and suitable trading platform for scalping)

  • Day trading - few minutes up to the close (no overnight holds)

  • Position Trading - several weeks to a year

  • Long term trading - a few years (almost like investing)

As for indicators (assuming you’re talking about technical indicators)…use any indicator you want regardless to the time frame if you’re into indicators.

I myself am a price action only trader (no indicators).

Mark

9

Swing trading is a tentative action in economic markets whereby instruments such as stocks, indexes, bonds, currencies and commodities are constantly bought or sold at or near the end of up or down price. Profits can be sought by engaging in either long or short trading.

11

I dont think it is important to categorize trading in such manner. It only is important to understand for how long you like to keep your position opened and adjust the strategy accordingly. Lets say you like to keep position opened for several hours. Is it day trading or swing trading? Probably something in between…