About Free Swing Trading
Swing trading is a method that tracks the pattern of an investment's movements and attempts to find the high and low. It's neither regular trading nor day trading, since the hold pattern occurs over several days. In order to maximize the profit, it's smart to find sites that offer low cost or free trades for swing trading.
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Identification
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Swing trading takes place in several types of investments. There are swing traders in the forex and futures market. Swing trading attracts investors who don't have the risk tolerance for day trading but want to take a shot at short-term gains. Usually the swing trader is in and out of a trade within a 10-day period of time.
Types
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Swing traders who dabble in the forex market, the market for currency exchange, can find ample sites that offer commission-free trades and simply charge pips, known also as spreads, between the bid and ask price. Investors who want free swing trades in the stock market need to look at Zecco.com, Bank of America brokerage and Wells Fargo brokerage for commission free trades.
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Identification
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The key to success at swing trading is to know your investment's movements inside out. They often rise to a ceiling and drop back down. Once you track the pattern of the investment, you're in a better situation to predict price shifts and therefore know when to buy and when to sell. Decide the price for both the purchase of the investment and sale before making the first trade.
Considerations
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You can find free educational sites like the one listed in the resource area for swing trading stocks. Even though the basic strategies apply to the forex market, the patterns don't behave the same. Sign up for practice accounts to test your knowledge in the stock or forex market before jumping in with both feet.
Warning
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Limit the amount of trades that you do in the month in the stock market, at the sites that offer free trades. Make sure you understand the conditions of the free trades. E*TRADE offers up to 100 free trades for the first month but this is for accounts that have a minimum of $1000 for six months. They reimburse you for the trades after eight weeks but remove the credit if the account drops below the $1000. Bank of America, Wells Fargo and Zecco.com all require a minimum to get free trades.
Prevention/Solution
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Some forex sites, like NobleTrading.com offer free tools for the swing trader. There is free software at Zecco for three months, after which you have to pay for it. Swing trading looks for short-term gains that are larger than those used for day trading, but is not a buy and hold strategy, so while some of the software is the same, the ways you use it varies.
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Resources
- Photo Credit Stock.xchng: Thomas Picard (PocketAces)
