CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What Is Swing Trading?

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Swing trading is trading based on maintaining an operation for a period greater than 1 day, but not more than a few weeks.
  • Swing trading is trading based on maintaining an operation for a period greater than 1 day, but not more than a few weeks.
  • Swing trading strategies are usually based on technical input or macroeconomic issues.

 How do swing traders make decisions ?

Technical analysis is very important when creating strategies for swing trading, because being able to identify the end of a corrective move and being able to operate in the direction of the prevailing trend can increase the likelihood of a successful operation. In conclusion, technical analysis will help swing traders identify clear entry levels based on price and chart.

Additionally, many swing traders base their strategies on macroeconomic events. This means, for example, that if a war breaks out in an oil-producing country, this increases the chances that the price of oil will increase. In this scenario, a trader may go long on oil anticipating that this event may affect market prices for the next two weeks. Identifying events helps a lot in trading, because many events that occur around us mark the sentiment of different financial markets.

Can I trade against the trend?

Some swing traders tend to trade against the trend, but does this mean that their chance of making a profit is necessarily lower? Not always, because an important part of swing trading is multi-term analysis. This means that a trader not only analyses one time interval on the chart, but makes their decisions based on multiple time intervals.

As an example, let's assume that the daily interval indicates an increasing trend. On the other hand, the hourly and fifteen-minute intervals may indicate that in the short or medium term a decrease may occur. In this case, the trader knows that even though the long-term trend is bullish, they can still make potential gains in the short or medium term by taking advantage of signals generated by shorter time intervals.

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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