BetaTrades Blog

Introduction To Swing Trading

What is swing trading?

Swing trading is short term strategy used by traders who focus on gains by holding positions for a few days; technically longer than a day, up to a few weeks, or even months.

Swing trading strategies

Swing traders employ numerous strategies, none is better than the other. The one that works for you might not work for someone else and vice versa. The swing trading strategy that you choose will depend on how much time you got to dedicate to your portfolio, how much money you got in it, your knowledge (technicals, fundamentals, mathematical skills), risk aversion, among many other factors.

These are the 3 most used strategies:

  1. Momentum trading: momentum traders focus on stocks that are moving considerably in a particular direction accompanied by a high volume. Timing is key, hold too long or sell too soon and you might end up either losing money or missing out significant profit.

       2. Fundamental trading: fundamentalists trade following specific corporate events such as financial reports, acquisitions and stock splits.

      3. Technical trading: technical analysis is basically the study of graphs, charts and indexes to find trends that indicate when to jump on board and when to get out.

Swing trading vs day trading

First things first, if you want to be a day trader you will need at least $25,000 on your trading account whereas you can start swing trading stocks with as little as you wish, as there is no legal minimum.

Day traders use technical analysis and will make lots of trades during the trading day, seeking small profits on each trade.

Highly skilled day traders can make important profits. Those not so highly-skilled will probably end up losing their shirts.

Goodbye monthly paychecks: most day traders don’t have a day job, being a day trader means being your own boss and having a flexible schedule.

Theoretically you don’t need a formal education or a degree in economics to be a day trader. You can educate yourself, there are countless books, courses and seminars.

Day trading is very stressful, but that is a price day traders are willing to pay, otherwise they would take the 9 to 6 office cubicle job.

Swing traders try to benefit from the swing of stocks (or any other financial instruments). They try to identify the beginning and the end of a directional price movement so that they can get in and out at the right moment.

Swing traders can have a day job. They don’t have to be in front of the computer all day long. They don’t need to check their stocks every two minutes, besides they can set stop losses.

You don’t need a formal education or a degree to be a swing trader, just like with day trading, you can educate yourself, buy swing trading ebooks, take courses or go to seminars.

There is considerably less stress involved in swing trading compared with the one that day traders undergo.


Swing trading is the most eclectic trading style. Unlike day trading, it works for beginner, intermediate and advanced traders. They all can profit according to their trading skills.


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