What is Swing Trading?When investing online or trying to make money from the stock market, traders apply a number of different strategies, such as Day Trading, Swing Trading, or Long-term Value Investing as recommended by Warren Buffett.
In swing trading the idea is to buy stocks (or sell them) for just a few days. The aim obviously is to make money by selling the stocks (or buying them back) a few days later. Swing trading is not interested in long-term trades.
There are however a number of recommendations it is worth following when swing trading
If a stock price gaps 1-2%, you should buy (or sell) half of the position size you intend buying (or selling) then see how the stock behaves before increasing your position. If the price doen't return to its original price, increase your position position.
If a the stock price gaps 2-3%, only buy (or sell) a quarter of the position size you intend buying (or selling).
If the stock price has gapped more than 3%, you are probably better off not bothering with the trade and looking for something else instead - the risk/reward is no longer the same, there is too much risk for too little reward.
Stock Investing - Swing Trading Video