When Should You Swing Trade For the Short Term?
Posted by admin | Posted in Forex News | Posted on 09-08-2010
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Short term swing trading is a slight twist or modification on the traditional trading method. Swing traders typically hold trades for up to a week, but typically no longer. How long you hold a trade is entirely up to you and this has lead to some traders preferring to keep trades open only for a short period of time.
You may want to opt for short term swing trading if you find yourself in a market that tends to trend for short periods of time. Swing traders profit by taking a slice of the market as price trends up or down. If the instrument you trade has shown in the past that it trends for only 2 to 4 days on average before going back to sideways movement, then it makes perfect sense that holding trades for only 2 days or so would be the optimal way to profit from this market.
Another reason you may want to opt for short term swing trading is if the market you trade is sporadic and can sometimes move abruptly. Precious metals and other markets similar to this can sometimes move erratically. Holding trades open for too long may expose your trades to unnecessary risk and it would be best to opt for trading short term instead of long term to avoid exposing your trades.
Short term swing trading is just one way of modifying the style to work with the market you trade in. If you prefer to trade for only 2 – 3 days or know that your market behaves in a way that would best suit a shorter style of swing trading, then this may be the right style for you.
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