Best Swing Trading Strategy for Beginners in 2024

What is Swing Trading?

Swing trading is a trading strategy that focuses on profiting off changing trends in price action over relatively short timeframes. Swing traders will try to capture upswings and downswings in stock prices. Positions are typically held for one to six days, although some may last as long as a few weeks if the trade remains profitable. Traders who swing trade stocks find trading opportunities using a variety of technical indicators to identify patterns, trend direction, and potential short-term changes in trend.

Finding stocks to swing trade

When swing trading stocks it is essential to choose the right assets to trade, as bad market selection could be a major weakness in your trading strategy. Make use of these tips to enhance your market selection efforts.

• Make use of chart patterns. Use our pattern recognition scanner that can help you identify reversal patterns like a double top or triple top chart pattern. Visit our article on stock chart patterns to discover the most important chart patterns and their meanings.

• Monitor the economic calendar. Keep an eye on the economic calendar, which can help you determine the health of a nation’s economy, and potential trading opportunities or risks in the future.

• Factor in earning calendars. Earning calendars will help you factor in sudden price movements to your swing trading strategies.

• Be careful when trading penny stocks. Penny stocks are highly speculative investments, so take care when trading them. Although the volatility of the penny stock markets presents high-growth trading opportunities, it also presents larger risks. IT IS HIGHLY NOT RECOMMENDED TO TAKE TRADE IN PENNY STOCK. 

Indicators For Swing Trading

1. MACD  ( Moving average convergence/divergence )

The standard MACD settings, which typically include a 12-period EMA, a 26-period EMA, and a 9-period signal line, and the Stochastic oscillator with a standard 14-period setting. This strategy is often applied on a 4-hour candlestick chart.

2. RSI ( Relative Strength Index )

Set RSI of length 14 which helps in setting of support and resistance. It also helps to identify trends. And helps you to become aware of fake break-outs.

3. SMA ( Simple Moving Average )

2 RSI's of different colours, lengths of 20 and 200 which helps you to identify market trends and future movement and helps you for setting of target and stop loss.

4. Volume 

Volume refers to the number of shares or contracts traded in a security over a particular time frame. The volume can be a significant indicator of the security's strength, momentum, and liquidity, which helps the trader make informed decisions.

Below is the trading Strategy that I basically use for Swing Trading: Vivek Mayur.

Maruti Suzuki Ltd as of April to June 2023

In the above chart, we bought a share of Maruti Suzuki Ltd on the 28th of March, suppose we are taking a swing trade, so what would be my decision? whether I should buy or sell.

Our trading decision is always based on the previous behavior of candle stick patterns. So before taking any buying decision, there should be strong support and If we are taking a selling decision there should be strong resistance in the 1 Day Chart frame. In the above chart, I have set my target based on the previous market highs. Always use the volume indicator to get to know bull and bear power. 

After hitting to target the candle sticks given a dark cloud cover indication we represents a bearish trend in the market from here we can exit our trade and we also go for the sell option.

This is how our screen looks after successful swing trading. Set your target and stoploss at your own risk.

Disclaimer: All the stocks are Technically and Fundamentally Analyzed by Vivek Mayur. Invest and trade at your own risk.