Swing trading is a trading style where trades are held from a few days to a few weeks to profit from medium price movements (swing). Unlike day trading, you do not have to sit in front of the screen all day.
đĸ Step by step method for swing trading
Select timeframe
4H (4 hours) â the most popular
Daily (1 day) â safer
> Entry is usually checked on 1H or 4H
Identify trend
First, understand which direction the market is going:
đ Higher High + Higher Low â Uptrend
đ Lower High + Lower Low â Downtrend
Tool:
EMA 50 & EMA 200
Trendline
Draw support and resistance
Buy at support (Buy)
Sell at resistance (Sell)
đ Range and pullback are very important in swing trading
Use indicators
Not all together, 2â3 are enough:
đš RSI
30â40 â Buy zone
60â70 â Sell zone
đš MACD
Bullish crossover â Buy
Bearish crossover â Sell
đš EMA
If the price is above EMA 50 â Buy bias
If below â Sell bias
Take entry confirmation
Bullish/Bearish candlestick pattern
(Engulfing, Pin Bar, Inside Bar)
Set Stop Loss (definitely)
Below/Above the previous swing low/high
Risk per trade: no more than 1â2%
Determine Take Profit
Nearby Support/Resistance
Risk : Reward = 1:2 or 1:3
đĸ A simple swing trading strategy
Strategy: EMA + RSI
1. Timeframe: 4H
2. Add EMA 50 & EMA 200
3. Add RSI (14)
Buy Setup
EMA 50 > EMA 200
Price pullback at EMA 50
RSI 40â50
Bullish candle â Entry
Sell Setup
EMA 50 < EMA 200
Price pullback at EMA 50
RSI 50â60
Bearish candle â Entry
â Mistakes to avoid in swing trading
â Overtrade
â Trade without stop loss
â Trade before news
â Emotional decision