Full swing trading strategy
What is swing trading in New Zealand?
Swing trading is a style of trading that occupies an intermediate position between intraday trading and medium-term investing. That is, it is not intraday trading, but trading over some foreseeable short period. It could be weeks, a month or two at most. Essentially, day swing trading strategies are a type of player in which you see a movement and essentially determine whether it is a trend or a counter-trend. Swing trading is the best strategy in New Zealand and is suitable for novice traders who are not able to follow the market all day.
Swing trading strategies can be safely classified as active forms of trading.
Swing trading strategies in New Zealand are similar to day trading in that they too are based on technical formations, well defined risk and short term price movements. The main difference between swing trading and day players is the length of time that a position is held, i.e. the time interval between the opening and closing of the position. Holding a position for a longer time offers two advantages:
- By keeping a position open, you give it room to develop. There is an opportunity to take advantage of a trend movement that lasts for days or even weeks.
- Swing day trading strategies allow you to take a lot of tension out of the player process, which is important for novice traders. You don't have to worry about your formation failing to work out in a single day. You give it more time to do so and limit the risks accordingly. This approach is perfect for beginner traders or those who are not able to stay in front of a computer all day and follow an open position.
Before you start playing a swing trading strategy, you need to develop a plan that will enable you to be as successful as possible. This means developing a well thought out strategy and finding the tools to implement it effectively. Having a plan when a swing player is a prerequisite for success. It is the quality of planning that distinguishes profitable traders from unprofitable ones. Here are the basic parameters you should consider when creating a plan.
Swing trading plan
Technical analysis is the basis of most strategies used for swing player. A formation is defined as a graphical pattern that indicates that a trade may have a low risk/profit ratio. Some technical indicators can be used to select the best formations. For example, you could trade an uptrend triangle pattern by getting a trade signal when a stock is consolidating above its 50-period exponential moving average.
There is no such thing as a perfect formation. You must choose those formations which you understand and are comfortable working with. Once you've decided on your preferred formation, you need to make a plan of how you will look for them.
The choice of time frame, on which you will make your trades, is very important, because it determines which formations and on which charts you will analyse and trade. For example, a bullish flag on a 5-minute chart is an excellent intraday formation, but may not be suitable for traders who want to hold a position for several days.
Trade management (entry and risk assessment)
Having decided on the formations to look for and the timeframe, you can move on to thinking about the trades themselves. To make your approach systematic, it is useful to use so-called "triggers". A trigger is analogous to a stop-limit order on the stock market. It allows you to place a limit order not immediately, but only after the price has crossed the Trigger level. Thanks to this mechanism funds are not blocked on your player account while waiting for the necessary price.
In practice it looks like this:
- the price has crossed the Trigger level in the required direction - limit order has been created;
- price returned back beyond the Trigger level at the distance of more than 1% - limit order is cancelled.
To be successful in swing trading strategies, a player must learn how to analyse triggers correctly and build his player system based on this analysis. Try it, have a successful trading!
Swing trading strategies stocks can be an excellent choice for those who are unable to trade all day, as well as for players who want to extend the time frame of their strategies. Swing trading in New Zealand includes many different strategies.
Strategy based on Price Action
This methodology is based on Price Action signals and technical analysis of the market. The price should move within a wide range, i.e. a definite channel should be formed on the chart, from the upper and lower limits of which the price should periodically beat off.
Identify key resistance and support levels. Draw them using the standard tool "Line" or set a special level algorithm. To analyse the market you first need to identify swing points - these are extreme points of chart minimums and maximums (swing-low and swing-high).
Identify the trend by the direction of the points:
- If the highs on the graph are gradually decreasing, you are in a downtrend.
- If the lows on the chart are gradually rising, you are in an uptrend.
- If the chart extrema are approximately on the same level at approximately equal distances from each other, then you are facing a sideways market movement (range). Do not confuse it with a flat, where the price moves in a very narrow range!
Therefore, if every successive swing-point is higher than the previous one, then only the Buy deals should be considered. Conversely, if swing points decrease one after another, then only Sell signals should be considered. When the market moves sideways, both Sell and Buy signals can be taken into account, depending on which level the price rebounded from.
Search for confirmation of the signal
After determining the direction of the price movement, wait for the chart to touch one of the key levels. At this point, the candlestick should form at least one Price Action reversal pattern: an inside bar, a bullish or bearish pin bar, an absorption pattern, etc. If such pattern appears, it will be a confirmation signal to enter the market.
Strategy by levels and oscillator
This methodology is very similar to the previous one, but instead of the reversal patterns the Stochastic oscillator signals will be used to confirm the signal. On the chart the price should move in the trend or within a wide range (but not in a flat!).
- Price rose to the resistance line, rebounded and turned the other way.
- The oscillator has left the oversold area.
- Stop-loss is set at the nearest low and take profit at the resistance line.
- Price has dropped to the support line, pushed away from it and headed in the opposite direction.
- Stochastic has moved out of the overbought area.
- Stop-Loss is placed at the near maximum and Take-Profit is placed at the support level.
Trading is work, which should be done by the rules. Remember: in swing player, only profitable positions can be rolled over, and only if there are compelling factors that confirm the strength of the current trend and its potential. Just do it!
Traditional short-term trading methods (scalping and intraday) imply mandatory closing at the end of the trading session, which, on the one hand, minimizes risk, but also reduces the potential profit. Swing trading strategies stocks are something in between intraday trading and position player. This style combines both intraday and overnight trades.
How do I start swing trading strategies in New Zealand?
Getting started in the stock market is not very difficult. It's much harder to keep your balance and not lose all your savings. Follow the instruction manual, and you will be successful!
1. Choosing a Broker. Most exchanges require a brokerage. Find out about commissions, on which exchanges and with which instruments the broker works.
2. Registration on an online platform. The procedure of cooperation with a broker and account opening is very simple. Everything can be done online without going to the office of the company. This greatly speeds up the registration.
3. Demo account demo trading. Almost all brokers provide such service. It is a training mode, where a trader does not risk his/her own money.
4. To open a real player account. After training on a demo account you should proceed to real operations. You should start with expenses - you will have to transfer money to the account in order to pay commissions and buy assets. You will be offered one of the payment systems, and depending on the chosen method of depositing, the money will arrive within several days.
5. Trade plan. Once you get the first trading results you can change your strategy, if you do not get the level of income you want, or for other reasons. Even if you are doing well, you should change your strategy regularly, so you can implement new insights.
Do not forget to set aside always a part of your income for capital accumulation, which you will later reinvest.
6. Increase your trading capital. After practicing with small amounts, it is better to increase your player capital. In doing so, you can adjust your swing trading strategy. We wish you a successful investment!