Swing Trading - Which Markets Can You Swing Trade?
Swing trading is the only style of trading which reduces the risk a trader faces while at the same time offering a high rate of return
. Swing trading is not limited to any specific market and can be used on any market around the world. However, there are two factors a market must posses to allow you to swing trade with maximum potential.
First, swing trading requires a market that is known to trend more than going sideways. Some stocks are sporadic in their movement and there is no underlying explanation as to why it moves as it does. Swing traders need a stock that trends or typical trends more than it moves sideways. This must be present to allow you to take chunks or slices out of the market and make money.
Secondly, whatever market you trade must not be too volatile. If your market is too volatile, it will be difficult to open and close trades in time before price moves against you. Swing trading takes time and as a result if a stock moves too fast or too abruptly in any one direction, it does not give you time to plan your entry and exit. The best kind of stock is one that is widely and heavily traded.
To make the most of swing trading you must first find a market that has a high tendency to trend and is not too volatile. Keeping this in mind will help you to gain an edge over other traders and be profitable at swing trading.