Swing trading strategies: guide for beginners (2024)

What is swing trading?

Swing trading is a trading style that focuses on making a profit by taking advantage of only part of a trend movement. Swing traders will focus on making smaller, but more frequent profits and cutting losses as quickly as possible.

This style of trading is based on the assumption that market prices almost never move in a straight line, and that investors can find opportunities in minor swings. Swing traders focus on points where the market changes direction, entering and exiting their trades in these so-called "swings." Swing trading involves trading in short-term periods of longer-term trends.

Swing Trading Basics: How Swing Trading Works

Swing trading involves identifying the profitable time to place trades based on two different types of swing: “swing lows” and “swing highs.” A swing low is a term used to refer to an important price low, while a swing high is a term used to refer to an important price high.

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The swing trader is concerned with making a profit by taking advantage of price movements between these important minimums and maximums. In an uptrend, investors will try to buy, or “go long,” from these lows and close the trade at swing highs. In a downtrend, investors will try to sell, or "go short," from the highs to the lows.

It is impossible to precisely determine the high and low of each swing movement, but the idea is to profit from as much of the price movement as possible. In fact, it is common to miss the exact highs and lows, as it can take time to confirm that a new swing is occurring.

Swing trading vs. day trading: how are they different?

The difference between thetrading intradíaand swing trading is the amount of time the position is kept open. In intraday trading, as the name suggests, positions are closed before the end of each trading day. Day traders buy and sell multiple assets on the same day to take advantage of small market movements.

However, swing traders do not necessarily have this restriction, as the duration of a swing trade is relative to the time frame of the trend, which can vary significantly. Therefore, even if an operation lasts only 30 minutes, or even less, it can also last more than a day.

The two best swing trading strategies

We have recapped two popular swing trading strategies that are used to create a methodology for entering and exiting a market. These are:

  1. Trend Trading
  2. Trading breakout

Trend Trading

The trend trading strategy is based on the use oftechnical indicatorsto identify the direction of market momentum. Swing trading strategies seek to capture a portion of this trend, taking advantage of the high or low of the swing.

Trend-based investors will take a long position if they believe the market will reach higher levels and a short position if they believe the market will reach lower levels. They will then exit the trade when the analysis indicates that a trend reversal is imminent.

Some of the most popular technical analysis tools used in trend following strategies includemoving averages, herelative strength index(RSI) and the Average Directional Index (ADX).

Trading breakout

Breakout trading consists of employing the strategy of opening a position as soon as possible within a given trend, in order to capitalize on the market movement. Swing traders will attempt to identify points where the market is about to “break out” of the range it has been trading in, typically when a support or resistance line is broken.

Breakout trading requires the investor to know how strong or weak the market momentum is, which is usually calculated using thevolumeof operations that are being carried out. This is why volume-weighted moving averages are a very popular trading tool.technical analysisentre los swing traders.

Popular swing trading indicators

In order to create a swing trading strategy, many investors will use price charts and technical indicators to identify potential swings in a market, as well as profitable entry and exit points. Popular swing trading indicators include:

  1. Moving averages
  2. Relative strength index
  3. Stochastic oscillator

Moving averages

One of the most popular indicators is themoving average (MM). This indicator examines closing price data over a period of time to determine the average value of the asset. For example, when using a 50-day MA you would take the closing price for each of the last 50 days, add these prices and divide by 50 to obtain the average price. These points are plotted together to draw a single line, smoothing out market movements so that an investor can better understand the overall trend.

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Source: IG Charts

MM focuses on identifying or confirming a trend rather than predicting it; This is because the MA is a lagging indicator, so it will always be slightly behind the market price. In principle, when the price is trading firmly above the moving average, the trend is considered bullish and when the price is trading below the moving average, the trend is considered bearish.

A common moving average strategy is to look for intersections between two exponential moving averages, which give greater weight to more recent price data, unlike a standard moving average. Typically, this strategy uses a fast EMA like the 50-day EMA on the chart below (the red line) and a slow EMA like the 100-day EMA below (the line green). The goal is to look for points where the moving averages intersect, which may indicate a change in price direction. If the fast MME intersects the slow MME from below, a swing trader might consider opening a long position, while entering a short position if the fast MME intersects the slow MME from above.

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Fuente: Bloomberg

Relative Strength Index (RSI)

Once a trend is identified, a trader might consider using a momentum indicator to try to profit from swings in the overall trend. A popular momentum indicator is theRSI, which swing traders can use to judge whether a market is overbought or oversold, meaning the market could be reaching a "swing."

The RSI is classified as an oscillator as it is charted from zero to 100. Typically, anything above 70 is considered overbought and is shown in red on the chart below. If the price falls below the 30 level, it is considered oversold and is shown in green on the chart below.

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Source: IG Charts

In an uptrend, a move out of the oversold zone, as indicated by the RSI, could be a signal to enter a trade. An overbought signal can be a signal to exit the trade. In a downtrend, a move out of the overbought zone could be a signal to enter a short trade, while an oversold signal could be a signal to exit the short trade and not trade against the trend. .

Stochastic oscillator

Similar to the RSI, the stochastic oscillator is a momentum indicator. Compares the most recent closing price to the previous trading range over a given period, usually 14 days. The theory behind stochastics is that market momentum changes before market volume or price itself, making it a leading indicator. Therefore, by trading based on momentum, a trader can try to predict swings.

Stochastic is presented in two lines: the indicator line (the black line on the chart below) and the signal line (the red dotted line). These lines range on a scale between zero and 100. If there is a reading above 80, the market would be considered overbought, while a reading below 20 would be considered an oversold condition.

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Source: IG Charts

If the two lines intersect, it is often a sign that a change of direction in the market is coming. If the indicator line rises above the signal line, swing traders might consider opening a long position, unless the values ​​are above 80. And if the indicator line falls below the signal line , swing traders might consider opening a short position, unless the values ​​are below 20.

How to get started in swing trading

There are two ways to start swing trading, depending on your level of confidence and experience. Your options are:

  1. To open an account. You can open an account with IG quickly and easily
  2. Practice your trading on a demo account. Test your swing trading strategies in a virtual funded environment with an IG demo account

Optionally, you can join theAcademia IGto learn more about swing trading and other trading styles.

El swing trading resumido

  • Swing trading is a trading style that focuses on making profits by taking advantage of only part of a trend movement. It is based on the assumption that market prices rarely move in a straight line and that investors can find opportunities in minor swings.
  • Swing trading involves identifying the profitable time to place trades based on two different types of swing: “swing lows” and “swing highs.”
  • You may not always be able to accurately determine the high and low of each swing movement, but the idea is to profit from as much of the price movement as possible.
  • Swing traders can keep their positions open for periods of time ranging from a few minutes to more than a day, as the duration of a swing trade depends on the time frame of the trend.
  • Two popular swing trading strategies are trend trading and breakout trading, which focus on short-term market movements.
  • Swing traders use technical analysis tools such as moving averages, the RSI and the stochastic oscillator.

Introducción al Swing Trading

El swing trading es un estilo de trading que se enfoca en aprovechar una parte de un movimiento de tendencia para obtener beneficios. Los swing traders buscan obtener ganancias más pequeñas pero más frecuentes, y reducir las pérdidas lo más rápido posible. Este enfoque se basa en la idea de que los precios de mercado rara vez se mueven en línea recta y que se pueden encontrar oportunidades en las oscilaciones menores.

Conceptos básicos del Swing Trading

El swing trading se basa en identificar el momento rentable para realizar operaciones basadas en dos tipos de oscilaciones: los "mínimos de swing" y los "máximos de swing". Un mínimo de swing se refiere a un punto mínimo importante en el precio, mientras que un máximo de swing se refiere a un punto máximo importante en el precio. Los swing traders buscan obtener beneficios aprovechando los movimientos de precios entre estos mínimos y máximos importantes.

En una tendencia alcista, los inversores intentarán comprar desde los mínimos de swing y cerrar la operación en los máximos de swing. En una tendencia bajista, los inversores intentarán vender desde los máximos de swing y cerrar la operación en los mínimos de swing. Aunque no es posible determinar con precisión el máximo y mínimo de cada oscilación, el objetivo es obtener beneficios de la mayor parte posible del movimiento de precios.

Diferencias entre Swing Trading e Intradía

La principal diferencia entre el swing trading y el trading intradía radica en la duración de las posiciones abiertas. En el trading intradía, las posiciones se cierran antes de que finalice cada día de trading. Los inversores intradía compran y venden activos en el mismo día para aprovechar los pequeños movimientos del mercado.

En cambio, los swing traders no tienen necesariamente esta restricción, ya que la duración de una operación de swing está relacionada con el marco temporal de la tendencia, que puede variar significativamente. Por lo tanto, una operación de swing puede durar desde unos pocos minutos hasta más de un día.

Estrategias populares de Swing Trading

Existen varias estrategias populares de swing trading que se utilizan para entrar y salir del mercado. Dos de ellas son:

  1. Trading de tendencias: Esta estrategia se basa en el uso de indicadores técnicos para identificar la dirección del impulso del mercado. Los inversores que siguen esta estrategia toman posiciones largas si creen que el mercado va a alcanzar niveles más altos, y posiciones cortas si creen que el mercado va a alcanzar niveles más bajos. Algunas herramientas de análisis técnico utilizadas en esta estrategia incluyen las medias móviles, el índice de fuerza relativa (RSI) y el índice de promedio direccional (ADX).

  2. Trading breakout: Esta estrategia consiste en abrir una posición tan pronto como sea posible dentro de una tendencia dada, con el fin de capitalizar el movimiento del mercado. Los swing traders intentan identificar los puntos en los que el mercado está a punto de "salirse" del rango en el que ha estado operando, generalmente cuando se rompe una línea de soporte o resistencia. El volumen de operaciones es un factor importante en esta estrategia, y se utilizan herramientas como las medias móviles ponderadas por volumen.

Indicadores populares de Swing Trading

Para crear una estrategia de swing trading, muchos inversores utilizan gráficos de precios e indicadores técnicos para identificar posibles oscilaciones en el mercado, así como puntos de entrada y salida rentables. Algunos indicadores populares de swing trading incluyen:

  1. Medias móviles: Las medias móviles (MM) son uno de los indicadores más populares. Estas se utilizan para determinar el valor medio del activo durante un período de tiempo determinado. Las medias móviles ayudan a identificar tendencias y se utilizan para confirmar una tendencia en lugar de predecirla.

  2. Índice de fuerza relativa (RSI): El RSI es un indicador de impulso que se utiliza para determinar si un mercado está sobrecomprado o sobrevendido. Un RSI por encima de 70 indica sobrecompra, mientras que un RSI por debajo de 30 indica sobreventa.

  3. Oscilador estocástico: El oscilador estocástico es otro indicador de impulso que compara el precio de cierre más reciente con el rango de trading anterior en un período determinado. Ayuda a identificar cambios en el impulso del mercado.

Cómo comenzar en el Swing Trading

Si estás interesado en comenzar con el swing trading, tienes dos opciones:

  1. Abrir una cuenta: Puedes abrir una cuenta con una plataforma de trading para comenzar a operar.

  2. Practicar en una cuenta demo: Si prefieres practicar tus estrategias de swing trading sin arriesgar dinero real, puedes utilizar una cuenta demo que te permita operar con fondos virtuales.

Además, puedes unirte a la Academia de la plataforma de trading para aprender más sobre el swing trading y otros estilos de trading.

Conclusión

En resumen, el swing trading es un estilo de trading que se enfoca en aprovechar una parte de un movimiento de tendencia. Los swing traders buscan obtener beneficios aprovechando los movimientos de precios entre los mínimos y máximos importantes. Existen diferentes estrategias y herramientas que se utilizan en el swing trading, como el trading de tendencias, el trading breakout y varios indicadores técnicos. Si estás interesado en el swing trading, puedes comenzar abriendo una cuenta o practicando en una cuenta demo.

Swing trading strategies: guide for beginners (2024)

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