How to Swing Trade Stock

Investing in the stock market can be a risky proposition. There are many investment models available to mollify some of the inherent risk in the market. One such model or investing strategy is to swing trade stock. When a person swing trades a stock, he typically only holds that stock for a maximum of four days. To effectively swing trade stocks, there are a few things you must do.

Difficulty: Moderately Challenging

Instructions

1. Understand how and why stock changes price over the course of its market life. The swing trader will use several different technical analysis strategies in order to understand these changes. Technical analysis uses market or stock trends in an attempt to predict the price movement of a particular stock.

2. Develop a trading criterion on which to base your technical analysis. Technical analysis incorporates the price, volume, trading range, strength and moving average of the stock. The trading criterion is one of the factors you find important and relevant to the price movement of the stock. There are no absolute set criteria, but there are popular strategies you can use. See the resources section for more information.

3. Implement the swing trade stock strategy to a given set of stocks. Then, decide which stock you want to purchase. Finally, purchase that stock to begin swing trading. You can use trading software or a stock screener to determine the stocks in which you want to invest. See the resources section for more information.

4. Sell the stock once it reaches the apex of the swing in stock price. When swing trading, you only want to keep the stock for a few days as it is trending upward. Once it trends up for more than a few days, the swing trading analysis says the stock will usually start to lose value. How you determine whether this trend is only one day or up to four depends on the technical analysis coupled with the trading strategy you chose to adopt.

Resources

• Read over trading strategies to swing trade a stock.
• Use a stock screener.