How To Swing Trade Swing Trade Explained At

Want to know how to swing trade? Read our guide that has swing trade explained in simple terms. Perfect for maximizing your trades of CFDs at the CAPEX online broker site!

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Getting started with swing trading

Successful swing trading will capture the upswing or downswing of the market price of an asset. As such, it requires a fair amount of technical knowhow to understand how the price action and technical indicators affect your ability to identify the swing of an asset. It is a trading strategy that works well with many of the CFDs featured on our CAPEX online trading platform.

CFDs are where you don’t actually own the asset, but hope to make a return from the rise or fall of the asset’s value. Come to our CAPEX site and try our demo trading platform to see how swing trading works.

Your guide to swing trading

Swing trading is a strategy that seeks to make relatively modest gains from the price movements of an asset. The strategy can be used for both buying and selling a range of assets from stocks and commodities to bonds and ETFs.

In terms of timing, swing trading sits between the fast trades of day trading and the long-duration trades of trend trading. Most swing trades tend to take place in a matter of days or weeks. Swing trading may not deliver the repeated gains of day trading, nor the massive returns of trend trading, but it’s an essential part of the modern online trading of CFDs and other instruments.

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What is swing trading?

Swing trading is a strategy where investors will seek to make modest gains from the price fluctuations of an asset on the market. Once you know how to swing trade, you’ll be expected to hold these trading positions for a few days or even weeks. It would involve knowing when to enter the trade to take advantage of a short term trend and knowing how to exit the trade in order to minimize any losses. As a result, you’ll be hoping to accumulate some respectable annual returns rather than a single massive gain.

Picking the best stocks for swing trading

While you can successfully use swing trading strategies on most securities, it tends to work best on large cap stocks. These are those stocks such as Apple, Johnson & Johnson and Procter & Gamble that get the greatest interest on the stock exchanges. Large cap stocks will tend to swing between reasonably predictable highs and lows on the market. They won’t experience the sudden volatility of cryptocurrencies, but their swings are perfect for swing trading.

The good news is that CAPEX features CFDs for all of the large cap stocks such as Alphabet, Amazon, McDonalds and much more. All of which should help you make the most of your swing trading strategy.

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When is the market right for swing trading?

It’s important to note that different market conditions will be better than others for swing trading.

Ideally, you should be looking at a market that is relatively stable, but has enough of a fluctuation to help you get a return of between 10% and 20% from your trades. It might not sound like much, but such returns can be invaluable when carried out over the long term. All of which shows just how helpful a good swing trading strategy can be.

Differences between swing trading and day trading

Once you know how to swing trade, you can easily apply much of this technique to other online trading strategies such as day trading. Duration is the key difference between swing trading and day trading but both can be successful at CAPEX.

Day trading involves using a variety of data charts and technical analysis to make a large number of single trades in a day. This differs from swing trading where the trading positions will commonly be held over a longer duration such as days or even weeks.


Entry and exit points for swing trading

Timing your entry points for swing trading

Many swing traders will use something called a moving average to identify the key points at which to enter a trade. This essentially marks the point where bullish and bearish trends converge, and it’s here where you should make your investment.

The data points will be analyzed to spot the moment where the trend of the asset is beginning its upwards shift. From here you’ll know to start your swing trade, and it’s an approach that can successfully be used on the CFDs featured at CAPEX.

Getting your exit points right for swing trading

Knowing how to swing trade means understanding exactly when you should be exiting your investment. This required a good understanding of the various technical indicators on offer at all good trading platforms like those at CAPEX.

A solid knowledge of how price action works is essential as this will help you spot patterns in the market value of the asset that you are trading. To maximise your profit, you’ll want to exit the trade as near as possible to the line marked as part of your swing trading strategy. After all, you want to get out before the trend takes a real dip.




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A quick example of swing trading at CAPEX

CAPEX gives you an easy way to put your knowledge of swing trading to the test. We feature hundreds of CFDs for a range of assets. Many of which are well suited to swing trading.

Let’s imagine that you wanted to invest in Facebook stock. This is a large cap stock which is ideal for swing trading. You’d first analyze the market to see if it’s looking relatively calm. Overly bullish or bearish markets aren’t ideally suited for swing trading, and instead you’d hope to see a pattern forming of relatively minor rises and falls in the Facebook market price.

Once you’d identified your entry point, you could simply buy a CFD on Facebook stock at CAPEX. Now you’d hold onto the stock until just before selling at your predicted exit point. A simple example of how to swing trade, but helpful all the same!

Conclusion – Start swing trading at CAPEX

Now that you know how to swing trade, you’ll be perfectly placed to know when to buy or sell CFDs for all of the assets featured at CAPEX. This is because swing trading offers you an excellent way to think clinically about the best times to take advantage of the short term trend of any asset.

This could mean knowing when to enter when the price of Amazon stocks begin to rise, or knowing when to exit once the value of oil starts to fall. As long as you understand that all forms of trading are inherently risky, you should find your knowledge of how to swing trade easy to put to use. So sign up to CAPEX and start swing trading!

How To Swing Trade – FAQ

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