Swing Trading 2021| Swing Trading Strategy for Beginners| ShapeMeGood

 Swing Trading in 2021 is created high probability of earning profit as in the time of crisis the Share Market is booming and many are taking its advantage and many new traders are entering the market


Here are some Swing Trading Strategies for Beginners.

• Content
• What is Swing Trading
• Fundamental of Swing Trading
• Market structure Swing Trading
• Trend in Swing Trading
• Support and Resistance
• Patterns in Swing Trading
• Risk to Reward Ratio
• High Probability Swing Trades

What is Swing Trading? 

Swing Trading nifty chart


Swing Trading is a speculative Trading strategy in financial markets where a tradable asset is held for between one and several days in an effort to profit from price changes or 'swings'. A swing trading position is typically held longer than a day trading position, but shorter than buy and hold investment strategies that can be held for months or years. Profits can be sought by either buying an asset or Short Selling. Momentum signals (e.g., 52-week high/low) have been shown to be used by financial analysts in their buy and sell recommendations that can be applied in swing trading.

Lot Size And Earning details - Swing Trading

One lot of Nifty contract contains 75 units thus technically you earn Rs.75 if the index moves up by 1 point. Therefore, 10 points gives you Rs.750 (Rs.75*10) profit.

Now let’s discuss about the return on investment. We know that the overnight SPAN margin for one lot of Nifty is approx. Rs.80,000 (according to the current scenario).

So if you invest with Rs.80,000 and you earn a profit of Rs.750/- (10 points on Nifty) then the ROI = 750/80000 = 0.9375%

However, if you do Intraday trading then the broker provides you a leverage to reduce the capital value.


Fundamentals of Swing Trading.

To master the art of trading you need to fully oe partially master some skills. Price movement analysis is one of the factors that lead you to a decent profit on your trade.

Technical analysis of a stock helps you to determine the targe price for a particular time period that the stock is about or will reach and price movement is all you need to understand if you just begin you stock market journey. 
It goes like support will push the price action to go further until it meets a new top resistance and the market will try to reject it for a time being but as the stock price cross the new resistance it now its new suppression will will support till there a huge put of stock.

This simple price movement is already enough to break into a trade entry and exit at achieved target, this is simply technical analysis of a stock based on support and resistance fundamental.

Many other fundamentals and technical analysis that make a trade confident enough for a good entry and booking of profit. 

In order to consistently make money in the markets, traders need to learn how to identify an underlying trend and trade around it accordingly. Common clich├ęs include: "trade with the trend," "don't fight the tape," and "the trend is your friend." But how long does a trend last? When should you get in or out of a trade? What exactly does it mean to be a short-term trader? Here we dig deeper into trading time frames.

A time frame refers to the amount of time that a trend lasts for in a market, which can be identified and used by traders.

Time frames play a huge part in all trades as it show what the current market scenario is, as trader needs to understand time frames follows each other for corrections. Going with the flow of different time frames can multiply profits.

Primary, or immediate time frames are actionable right now and are of interest to day-traders and high-frequency trading.

Other time frames, however, should also be on your radar that can confirm or refute a pattern, or indicate simultaneous or contradictory trends that are taking place.
These time frames can range from minutes or hours to days or weeks, or even longer.


Swing Trading Market structure 

The two major factor that a professional and a beginner first understand is that market is either bullish or bearish. Its all that matters while trading and investing.

And market structure varies from time to time and sometimes it varies in different time frames.
And in trading you go for technical analysis for identifying the position of market know as trend.

A trade must go along the trend, not against it, and thats a basic fundamental. Potential profits lie in this market structure. 
The better the market analysis the more your profit potential.

All trades are valid until the last trading day i.e. last Thursday of every month ( this is for options trading).

Market forms some usual patterns, Flag pattern, triangles pattern, cup and handle pattern, reversal pattern. These are some famous pattern analysis.

A chart is not just some random lines or candles, its actually the demand and supply for a stock which follows a pattern and good understanding of these patterns are your high probability trades for good profit booking.

Bonus - 

 Flag Pattern 

Image contains the chart showing flag pattern formation

In the context of technical analysis, a flag is a price pattern that, in a shorter time frame, moves counter to the prevailing price trend observed in a longer time frame on a price chart. It is named because of the way it reminds the viewer of a flag on a flagpole. 

Triangle pattern

Image contains picture of chart showing different triangle pattern formation
Triangle patterns are aptly named because the upper and lower trendlines ultimately meet at the apex on the right side, forming a corner. Connecting the start of the upper trendline to the beginning of the lower trendline completes the other two corners to create the triangle. The upper trendline is formed by connecting the highs, while the lower trendline is formed by connecting the lows. 


Cup and Handle pattern

Image contains picture of a chart showing cup and handle pattern formation


A cup and handle price pattern on a security's price chart is a technical indicator that resembles a cup with a handle, where the cup is in the shape of a "u" and the handle has a slight downward drift. The cup and handle is considered a bullish signal, with the right-hand side of the pattern typically experiencing lower trading volume.


Reversal pattern

Image contains picture of a chart showing reversal pattern formation
A price pattern that signals a change in the prevailing trend is known as a reversal pattern. These patterns signify periods where either the bulls or the bears have run out of steam. The established trend will pause and then head in a new direction as new energy emerges from the other side. 

Understanding Trends in Swing Trading.


Trend is the direction which leads the market, if the trend is bullish the market or stock goes up and if the trend is bearish the price goes down.

Trend analysis is the key to make continuous profits. Swing Traders focus on trend intensely as one single move can cause you a lot of money, which will eventually drive your emotions to control the best of you.

Understand its psychology and your trading career will take a good foundation and it all comes from years of experience.

Judgement of trends line must be precise, try making accurate trend lines in different time frames it will slowly direct you the market flow.

Risk to Reward Ration.

Risk management is that one fundamental which is needed to be mastered as quick as one can.

One doesn't lose money in the share market because the trade went against him, he looses money because of poor risk management techniques.

Knowning what is at stake and what is the possible return on it makes a trader. 

Risk to Reward Ratio is simply explained with this example-  Betting $500 on a particular company that its production will increase 5x time the average production and your profit for that conclusion if went accordingly to your judgement woul be ($500 x 5times) i.e. $2500 .

Initially investment is $500 and resulting profit is $2500, you took a risk of $1 for every $500 that is risk to reward ration.

Your risk of loosing money is far more less than your potential of making money. This correct use of this strategy would save you a hefty amount of money eventually.


The most asked question "How to actually start Swing Trading?" 

Getting started with Swing Trading is easy pick a stock or indices with good swing volatility. 

Create a good technical analysis identification of the market structure, visible pattern the stock is moving with, where the trend directing the price, using good indicators like moving average which eliminates the sound and obstacles and shows the direction of the market, placement of stoploss precisely after the support according to your capacity to handle loss 

Proper analysing the risk involved with profit booking.

These are the initial management steps needs to be taken before entering a trade.

There are some good indicators which tells the entry and exit points can double your profit.

Swing Trade or any other Trade needs patience and quick reaction time. Never panic when the wind is blowing against you be calm and believe your technical analysis and take quick action wherever needed. 

These elements only makes you a experienced Trader and experience is the most needed skill in the Share Market. 

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