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The NO BS Guide to Swing Trading

swing trading patterns

As a bullish swing trader, you should look out for these type of stocks but you should wait until the stock has resumed its original uptrend. This means you shouldn’t buy when the stock pulls back because the stock can continue to go down further. There are swing trading opportunities in these scenarios, with the trader going long near the support area and shorting near the resistance area. Best Swing Trading Strategies 2023 focuses on the top 3 trading strategies for making money in the stock market. These 3 powerful trading strategies are being

used by professional traders to find profitable stock trades. There are a million ways to make money from the markets and there are also a ton of swing trading strategies out there.

swing trading patterns

While triangles are a common chart pattern, I require very specific criteria to materialize in order for me to take a trade. Such indicators look for declining trading volume and price patterns that indicate a pivot may be imminent. Swing traders use technical analysis to make predictions and disregard fundamental analysis. They aren’t interested in the intrinsic value of stocks, but rather they look for stocks with short-term momentum that can allow them to capture gains in just a few days. Frequently, the 20 and 50 periods EMA is on the swing trader’s chart.

Pattern Finding in Swing Trading

Swing trading is one of the few ways traders attempt to capture frequent short-term price movements in a market landscape that tends to evolve at a much slower pace. Once this swing trading pattern appears, it signals that there’s resistance in the market and that prices are likely to swing down. To spot this pattern on your chart, look for a peak (head) followed by two smaller peaks (shoulders), with each of the three peaks being separated by troughs. The head and shoulders swing trading pattern is one of the most reliable trend reversal indicators.

Moving averages are some of the simplest and best swing trading indicators. Their purpose is to paint a clear picture of the trend of a security by smoothing out price action. Combining candlestick patterns with technical indicators is a sound approach. Here, we combined an oscillator and a three-bar pattern to find pullback trades. Traders also use moving averages to determine the support (lower) and resistance (upper) levels of a price range.

Other useful swing trading tools

Regardless of the strategy and the technical indicators you use, you should always enter a trade with a clear trading plan. Through analysis and experience, you can determine which swing trading strategies work best for you. Both the Stochastic Oscillator and candlestick patterns are well-defined.

  • Triangle patterns are one of my favorite stock swing trading strategies.
  • You can use these gap trading strategies for intraday, end-of-day, or weekly gaps.
  • In its simplest form, swing trading seeks to capture short-term gains over a period of days or weeks.
  • The idea is to endure as “little pain” as possible by exiting your trades before the opposing pressure comes in.

For swing traders finding opportunities among hundreds of stocks, this is a huge advantage. For example, a trader may use 9-, 13-, and 50-day EMAs to look for crossover points. When the stock price moves above, or “crosses” the moving averages, this signals an upward trend in price. When a stock price falls below the EMAs, it’s a bearish signal and the trader should exit long positions and potentially put on shorts. A swing trading indicator is a technical analysis tool used to identify new opportunities. Swing traders want to profit from the mini trends that arise between highs and lows (and vice versa).

Swing Trading Strategies

The next consolidation was tighter, but ultimately, the price couldn’t hold and broke to the downside. A triangle is simply a contraction in the price, but it must align with very specific criteria in order to be tradable. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

Cue technical indicators — handy tools that summarize and visualize various relevant data points. Used in tandem with stock chart patterns, technical indicators can help give you an edge in trading that can help you make more informed and confident trading decisions. Gaps are characteristic of daily charts that swing traders use. While gaps pose a risk for swing traders, they reveal precious market clues.


Much of the seemingly “random walk” of prices from minute to minute throughout the day may appear as noise. Some traders attempt to capture returns on these short-term price swings. The term “swing trading” denotes this particular style of market speculation. Perhaps you’ve been tempted to venture into this style yourself. If you’re not familiar with it, read on for a brief explanation.

swing trading patterns

When starting out, stick to the patterns where you can see all the distinct price waves and criteria as discussed in the video and in the list above. The Aggressive Trailing Stop Loss is effective as the price nears the profit target or once the trade is showing a nice profit. Some trades will lose, and some don’t take off like how we want. If it is really dead, close it out and use that money for a different one. I take trades if the consolidation is in the middle to the upper portion of the triangle.

The strategy I use for trading Triangle patterns

One way to compare recent closing prices to the previous trading range is to use the stochastic oscillator, which assists traders in identifying the end of one trend and the beginning of another one. The stochastic oscillator is a bound oscillator, which means it operates on a scale from 0 to 100. Anything over 80 generally suggests that the market is overbought, while a reading under 20 suggests oversold conditions. Now we have reviewed the most popular swing trading strategies, follow the below steps to open an account with us, so you can get started to swing trade stocks. Support and resistance lines represent the cornerstone of technical analysis and you can build a successful stock swing trading strategy around them. Swing trading is a compelling approach to the market, offering the potential for significant profits over the short to medium term.

The stochastic oscillator, which is used to determine if a security is overbought or oversold by comparing the closing price of a security with the security’s price range during a chosen time frame. There’s a reason why so many traders consider volume one of the best stock indicators. An asset that shows strong trading volume can easily be sold, making it easy to exit positions. Trading any asset that doesn’t have a decent level of volume should be avoided.

Popular Swing Trading Patterns

Swing trading and day trading have many similarities, but the most marked difference is the frequency of trades. Swing traders focus on short-to-medium term positions while day traders close out their positions at the end of each trading day. Day trading is a full-time job, requiring the trader to monitor market movements throughout the day and trade frequently. A swing trader can manage and trade on the side while still maintaining a full-time job. More importantly, swing trading doesn’t demand the same level of active attention as day trading, so the swing trader can start slowly and build the number of trades over time.

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Unlike day trading where positions typically last only one day, swing trading positions usually range from two to five days, but can last as long as two or three weeks. The objective of swing trading is to find the overall trend based on chart patterns. But now that you have a good grasp of the basics, it’s time to level up with some of the finer points of swing trading. In the following article, we’ll explore the ways in which you can (and should) use technical analysis and fundamental analysis when swing trading. The most important momentum, trend, and volatility indicators are mentioned, as are a couple of specific strategies that have proven popular with traders. And since swing trading carries a degree of risk to match its potential for returns, we conclude by thinking about the importance of stop-loss orders.