What is Swing Trading? | Swing Trading Explained | Quantra Course
Part of the course on Swing Trading Strategies: https://quantra.quantinsti.com/course/swing-trading-strategies ***START FOR FREE*** Welcome to this video lesson on what is swing trading. When you hear that a stock price is rising, a rising straight line comes to our mind. But in reality, the price movement is never this smooth and is in a zigzag pattern. The increase and decrease in the price is called the swing. You should note that in the long term the price increases. But in the short term it exhibits swings. When the price level reaches a high and then starts declining, it is called a swing high. Similarly, when it reaches a low level and then starts increasing, it is called a swing low. As a trader, you will first identify the swing patterns. You can capitalise on this pattern by buying when the price has reached a swing low. And you will sell when it reaches your profit target. This is called swing trading. Swing trading is not limited to securities whose prices are increasing. It can be applied to securities which are falling or trending downwards. You can sell at a swing high level. And buy back when the profit target is achieved. This is not just a theoretical concept. It is seen in the real-life too. Let’s take a look at the price graph of iPhone maker, Apple Incorporated. At first, Apple’s share price keeps increasing till $120 before declining on 16 November 2020. This is the first “swing high”. The price keeps decreasing till $114 before increasing again. This is the “swing low”. Similarly, a new swing high and low is formed at $124 and $122 respectively. An interesting observation can be made from this graph. The price at the second swing high is more than the price at the first swing high. Similarly, the price of the second swing low is higher than the price of the first swing low. This typically happens in a trending stock. Let’s start swing trading. You would wait for the next swing low and reversal. The moment you are confident of reversal, you buy the stock. The swing low is made at $127 on 15 January 2021. When the price starts rising and moves to $130, you buy Apple stocks. When the price moves to $140, you close your trade and pocket $10 from it. Then you can check for the next swing low, which occurs at $131 on 31 January and buy the stock again. And swing trading continues. To summarise, swing traders first identify swing patterns. If the stock is trending upwards, they will buy around swing lows and try to sell for preset profit. This was a simplistic example to learn swing trading. Later in the course, you will learn about smart techniques to systematically enter and exit from a swing trade. Quantra is an online education portal that specializes in Algorithmic and Quantitative trading. Quantra offers various bite-sized, self-paced and interactive courses that are perfect for busy professionals, seeking implementable knowledge in this domain. Find more info on - https://quantra.quantinsti.com/ Like us on Facebook: https://www.facebook.com/goquantra/ Follow us on Twitter: https://twitter.com/GoQuantra
Part of the course on Swing Trading Strategies: https://quantra.quantinsti.com/course/swing-trading-strategies ***START FOR FREE*** Welcome to this video lesson on what is swing trading. When you hear that a stock price is rising, a rising straight line comes to our mind. But in reality, the price movement is never this smooth and is in a zigzag pattern. The increase and decrease in the price is called the swing. You should note that in the long term the price increases. But in the short term it exhibits swings. When the price level reaches a high and then starts declining, it is called a swing high. Similarly, when it reaches a low level and then starts increasing, it is called a swing low. As a trader, you will first identify the swing patterns. You can capitalise on this pattern by buying when the price has reached a swing low. And you will sell when it reaches your profit target. This is called swing trading. Swing trading is not limited to securities whose prices are increasing. It can be applied to securities which are falling or trending downwards. You can sell at a swing high level. And buy back when the profit target is achieved. This is not just a theoretical concept. It is seen in the real-life too. Let’s take a look at the price graph of iPhone maker, Apple Incorporated. At first, Apple’s share price keeps increasing till $120 before declining on 16 November 2020. This is the first “swing high”. The price keeps decreasing till $114 before increasing again. This is the “swing low”. Similarly, a new swing high and low is formed at $124 and $122 respectively. An interesting observation can be made from this graph. The price at the second swing high is more than the price at the first swing high. Similarly, the price of the second swing low is higher than the price of the first swing low. This typically happens in a trending stock. Let’s start swing trading. You would wait for the next swing low and reversal. The moment you are confident of reversal, you buy the stock. The swing low is made at $127 on 15 January 2021. When the price starts rising and moves to $130, you buy Apple stocks. When the price moves to $140, you close your trade and pocket $10 from it. Then you can check for the next swing low, which occurs at $131 on 31 January and buy the stock again. And swing trading continues. To summarise, swing traders first identify swing patterns. If the stock is trending upwards, they will buy around swing lows and try to sell for preset profit. This was a simplistic example to learn swing trading. Later in the course, you will learn about smart techniques to systematically enter and exit from a swing trade. Quantra is an online education portal that specializes in Algorithmic and Quantitative trading. Quantra offers various bite-sized, self-paced and interactive courses that are perfect for busy professionals, seeking implementable knowledge in this domain. Find more info on - https://quantra.quantinsti.com/ Like us on Facebook: https://www.facebook.com/goquantra/ Follow us on Twitter: https://twitter.com/GoQuantra