Strategy #4: Swing Trading
If Goldilocks had a preferred way of trading, it’d probably be swing trading.
Day trading would be too fast for taking profits and position trading would be too slow with its long-term plan.
Swing trading would be just right.
That’s because this strategy captures gains in an asset over a few days to several months (at the longest) after price movement.
So you don’t have to risk your money for long… and you get to cash in on your profits sooner.
As a result, the risk/reward ratio is well worth the trade because you stand to gain multiples of every dollar risked.
How To Swing Trade
The whole purpose of this strategy is to lock in a substantial piece of price movements. That means you could invest in assets with a lot of volatility. If that’s not your jam, focus on more stable assets.
Depending on the volatility, you could end up waiting a few days to several months in order to capture those sizable gains.
But the real work is when you identify:
- Where the asset’s price is going to move
- The risk-to-reward ratio
- A good position to enter
- A good exit to capture sizeable gains
After that, it’s on to the next potential swing.
Why Swing Trading?
Well, coming back to Goldilocks, she’d tell you it’s not as fast and requires less time than day trading. And you don’t wait too long for trends to take off with position trading, either.
Swing trading maximizes short-term profit at a moderate pace, with trades typically lasting only a few days up to several months. And it’s based solely on technical analysis, which makes the process more straightforward.
But It’s Not Perfect, Is It?
Nope, because of volatility, you could expose yourself to overnight risk (set your stop-losses.)
Some swing traders can lack discipline and get impatient. So they ditch long term gains for short market moves.
Swing trading requires you to stick with your strategy because of technical analysis. If it’s not going the way you thought, you still have to accept the risk. That’s why you have the stop-loss in place.
Luckily for our family at Big Energy Profits, we have an algorithm in place that incorporates the best active strategy for you. All you have to do is plug and play.
And you can learn more with this free training — click here to watch it right now!