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Best Swing Trading Strategies

Financial trading is multifaceted due to the variety of markets and assets, trading systems (TS), strategies and styles. One of the latter is swing trading, which combines many strategies aimed at extracting maximum profit from price fluctuations (swings).

The concept of swing trading has been known for a long time – the basics of this style were described back in the middle of the 20th century by George Taylor. Considering the futures market, the author of the swing trading book “The Taylor Trading Technique” proposed the use of cycle theory and trading from technical levels, formulated the rules for holding and closing positions. The described swing tactics are applicable in other markets, in other trading conditions and allow you to create profitable trading strategies in intervals from several hours to several days (weeks).

In the 90s of the last century, the craze of intraday technicians for traders, thanks to the next global changes in the markets, began to bring more losses than profits. This has sparked an increased focus on high frequency trading (HFT) and position trading based long term investments. The number of market participants studying and applying swing-trading provisions has also significantly increased.

However, not everyone can master the swing trading style. Profitable trading requires the skills of analysis (fundamental and the use of technical tools), experience that allows, at least, to recognize the stages of the asset and swing movement, the level of psychological preparation. It is quite difficult to cope with the task, especially for beginners and traders who are used to making quick profits from intraday trading.

What it is?

Swing trading from – swing, reversal, swing) – a style of trading in financial markets that uses price fluctuations (swings) to maximize profit with a minimum number of transactions.


This definition includes several principles that combine techniques and strategies:

It is obvious that the application of these principles is within the reach of only a market player with a high level of theoretical knowledge, practical trading experience, and psychological stability. He is required to have a competent fundamental analysis of the market (s), the choice and use of technical analysis tools, the ability to calculate the degree of risk, movement targets and levels of fixing losses.

Swing-trading does not imply opening deals in flat (in narrow price ranges) or during strong speculative movements. The main income for traders of this style comes from powerful protracted trend movements. But this approach limits trading opportunities – most of the time (about 70%) the price is in the consolidation zones. At the same time, for example, the FOREX market is characterized by a high correlation coefficient of currency pairs, due to which the trader will have to wait for the appearance of the next swing and the optimal moment to conclude a transaction over a long-time interval.

Therefore, this trading style requires the selection of markets with a high level of diversification. These include, for example, the derivatives markets (futures and options, it was for the first that swing trading techniques were first described) or the US stock market with more than 6,000 available assets.


The definition allows to unambiguously formulate the goals of swing trading:

In fact, the goals of this trading style overlap with the goals of positional trading and long-term investing, which are aimed at making money in the financial markets, even for those who do not have the ability or desire to devote a significant portion of their time to market analysis and maintenance of open positions.


The growing number of swing-trading adherents is explained by the advantages that are characteristic of this trading style:


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