June 17, 2024

How to Swing Trade

Table of content


    Following on from our last article and having learned what swing trading is all about, here we are now on this second part of the series where we’ll discuss what it means and how to swing trade.

    If you missed the first article, “What is Swing Trading?”, catch it up.

    If you read it already, stay focused and read on!

    Mastering Swing Trading in the Stock Market

    As you might have gathered by now, swing trading occupies the middle ground between the fast pace of day trading and the long-term buy-and-hold strategy.

    Swing traders tend to target opportunities available in the short to medium term and typically hold stocks from a few days to several weeks. This timeframe allows traders to ride price trends without needing to constantly monitor the market (and their screens).

    Unlike day trading, which requires constant attention and quick decisions, swing trading allows for a more deliberate approach, concentrating on larger market moves.

    Key Notes
    You’ll find that the main differences between swing trading and day trading are in:

    • Time management
    • Position sizing
    • Technical/Fundamental analysis balance
    • Risk management
    • Sensitivity to news

    Understanding Swing Trading

    Swing trading focuses on identifying and taking advantage of market swings – hence the name – but that, of course is easier said than done. Besides, there is more to swing trading than just “chasing swings”.

    What follows are some of the most fundamental factors swing traders must and do take into consideration when creating and deploying their strategies. Take it as a tester of what to expect.

    Time Management

    Swing trading is especially ideal for those who can’t commit to full-time trading but still want to be active in the market.

    It can require as little as a few hours a week to analyze potential trades and keep an eye on open positions.

    Remember to allocate at least some of that extra time available to market research and portfolio review.

    Setting Realistic Goals

    As for all other trading styles, before you start, you should set realistic goals for your swing trading activities.

    This includes your expected return on investment and the level of risk you’re willing to take. Remember, the aim is not just to make a profit but to achieve consistent and sustainable gains.

    ttp - a prop firm for stock traders

    Preparing for Trades

    Research and Education

    In swing trading, knowledge is crucial. Equip yourself with a solid understanding of market mechanics, different types of stocks, and broader economic indicators. Reading books by experienced traders, taking online courses, and staying updated with financial news can provide valuable insights.

    Choosing a Brokerage

    Select a brokerage that offers a platform with the tools you need for swing trading. Look for ones with reasonable fees, a robust mobile app, and strong research tools. Your brokerage platform should provide real-time data, analytical tools, and easy trade execution.

    (Or forget the brokers altogether and opt for a good prop firm such as TTP instead. Read our article on “Brokers Vs Prop” to find out why you’d be better off).

    Developing a Trading Plan

    Defining Entry and Exit Points

    A key aspect of swing trading is knowing when to enter and exit a trade. Create a clear plan that defines your entry points (when you will buy a stock) and your exit points (when you will sell). These should be based on sound price and market analysis and your individual risk tolerance.

    Risk Management

    Managing risk is about protecting your capital and minimizing losses. A common rule is never to risk more than a specific percentage of your trading capital on a single trade. This way your potential losses will always be proportionate to your current balance.

    Also, use stop-loss orders to limit potential losses. Set it at the same time as opening the trade and make that a second nature.

    Position Sizing

    Position sizing refers to the amount of capital allocated to a single trade. Proper position sizing is essential in risk management and ensuring that one bad trade doesn’t significantly impact your portfolio. It’s about balancing potential rewards against possible risks.

    Compared to day traders, swing traders traditionally trade smaller position as the targeted price swing is larger.

    We will talk about Risk Management and Position Sizing in our next articles on swing trading – specifically, in the article about the best swing trading strategies and the one about the most useful software for swing trading.

    Key Notes

    Trade the Pool has recently launched a program. tailored specifically to swing traders.
    It also includes:

    • Almost any stock and ETF in the U.S. markets.
    • Overnight and over-the-weekend position holding allowed.
    • Reach 3 times your max DD. If your max DD = $2,100, reach $6,300 in profit and get a TTP-funded account


    Swing trading offers a balanced approach to stock market trading, allowing you to capitalize on short to medium-term price swings without the need for constant screen time. By understanding the basics, establishing a routine, preparing for trades, and developing a solid trading plan, you can start your journey in swing trading with confidence.

    Remember, the goal is to make consistent, sustainable gains while managing risk effectively.

    I hope this helps.

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