subject: Swing Trading - How Support & Resistance Levels Give You That Edge [print this page] Swing trading is one of the most reliable and proven trading methods or styles available today. Just why or what makes swing trading so reliable? The key to this trading style lies in the use of support and resistance. Through the proper implementation of support and resistance, many swing traders are able to trade without any indicators or they severely reduce their dependance on indicators and instead can trade naked. This can be seen by taking a look at how many bank and professional traders trade around their world. Other than the use of support and resistance, the majority manage to trade markets by placing and closing trades based on and around areas that they believe offer strong support or resistance. If you are curious about swing trading, then learning how to implement support and resistance effectively is crucial.
Support and resistance levels are so powerful and effective for swing traders because it is at these levels in the market that a trader has the odds stacked in their favour. Traders need a trading edge, and these levels offer you just that edge. Using these levels effectively requires that you first understand how and why they form. As price moves up and down in a market, there are certain levels or points that stop or offer resistance. These levels are known as support and resistance levels. Support levels offer an opportune time for you to place buy or enter the market. Likewise, resistance levels offer the best opportunity for you to short the market or close out any open trades in order to maximize your profits. Knowing where these levels are allows you to place trades with confidence and greatly reduces or eliminates the need for the use of any kind of indicator.
Support levels are so effective for entering the market or closing out any short trades because price typically bounces and stalls when it approaches support levels. If the trend is currently up, a swing trader is looking to go long and the best time to place a trade would be to wait for price to retrace and pullback to an area of support. Resistance levels are used in a similar fashion but to enter short or sell in the market. During a down trend, as a swing trader you stand the best chance of going short when price stalls at a level of resistance. It is at this time that you would either sell into the market and go short with the major trend.
To swing trade effectively, you would be best advised to take advantage of the power that support and resistance levels offer. Traders need to trade in a way that stacks the odds in their favour and not against them. Support and resistance levels allow you to do this by offering points or areas in the market that increase your chances greatly of entering into a profitable trade. If you are considering learning about swing trading, then make sure that you spend the time to familiarize yourself with support and resistance levels to get a real trading edge.
