Swing Trading for Beginners: 4 Strategies That Work

stock market trading charts

Are you trying to make quick money?

If so, investing in stocks can help you turn a profit. While day trading shoots for slow and study growth, swing trading works better for short-term opportunities.

Continue reading to learn more about swing trading for beginners and profitable strategies for you to try!

What Is Swing Trading?

Whether you are in between jobs or looking for a new solid hustle outside of the traditional 9-5, swing trading may work for you. This speculative trading strategy refers to buying and then selling anywhere from that day to under a month later.

This allows for a quick return with fewer fees. But, it requires you to keep up on your daily research.

Strategy 1: Use the Relative Strength Index (RSI) Indicator

The RSI indicator measures how fast and how long it takes for prices to change. This momentum oscillator that moves between zero and 100.

RSI = 100 – [100 / ( 1 + (Average of Upward Price Change / Average of Downward Price Change )]. You can use this indicator to identify the general trend and to signal divergences and failure swings.

Since its original purpose fit day trading, adjust it from 14 days to 10. When you get a signal that a stock falls under 30 on the RSI, it is underbought and you want to buy. Then, when you’re alerted that it rises to the overbought range, over 70, sell right away. 

Strategy 2: Follow Trends

Draw a trend line for your trading setups. To do so, you mark 3 or more peaks where the market reaches an uptrend and then do the same where the market hits a downtrend. This will create a signal line that lets you know whether your stock obeys or breaks the trend.

For buying, you want to create a buy stop order 2-5 pips above the upper point and a stop loss 2-5 pips below the lowest point. With selling, place a sell stop order 2-5 pips below the trendline and a stop loss 2-5 pips above the trendline. 

Strategy 3: Use a Price Range

When first starting out, you might find this simple strategy best for now. You simply choose the price ranges that you want to buy at and sell at and then set them.

When starting out, you might set both low, lowering your risk for loss. As you get more comfortable, you might raise the bar as you see fit and widen your range, possibly adopting Fibonacci retracements. This poses a bigger risk but also sets the stage for a greater reward.

Strategy 4: Exponential Moving Strategy (EMS)

With this strategy, you watch for the market to consolidate after buying a stock. When this happens, it will flatten out its exponential average. At this point, you trade and then buy again once it goes back to the bottom.

Swing Trading for Beginners Made Easy

With this guide, swing trading for beginners sounds simple. This is because it is!

Understanding the market as a whole and researching stock trends prior to putting any money in will give you a leg up in this swaying business. Read more money-making tips on our website!