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What are the upsides and downsides of Swing Trading?

Zeynep Tufekcioglu


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One of the main factors that made swing trading popular is the ability to take advantage of natural flows of the market. In other words, financial markets more in one direction only for a certain period and swing traders can use that to their own advantage.

The fact that you’re constantly moving in and out of the market as a swing trader means you can identify more trading opportunities. If you take a look at the financial chart, you’ll notice that in most cases there’s a clear long-term trend but the market might not stay at the support or resistance levels. Additionally, swing trading is mostly based on technical analysis and that usually provides them with a specific point that serves as an indicator that their trade might go south.

Just like any other type of trading, swing trading also has its limitations. For example, it’s important to remember that the market doesn’t always submit to support and resistance levels even though it points at them at certain levels. Also, the fact that each trade has its own risks means that you’re risking more money than usual in swing trading. 

Like I’ve just said, swing traders rely on technical analysis a lot. While that might have its own benefits, it also means swing traders have to put extra work. That’s exactly why swing trading is not recommended to new traders who do not thoroughly understand technical analysis. 

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