Swing traders are defined primarily by their time frame in the market. They do not follow a buy and hold strategy that looks to long term growth by correcting selecting sectors of the market that are seen to have potential. They also do not generally engage in day trading. It is possible that the swing trader may have minimal exposure to these practices but the practice of swing trading would fall somewhere in the middle of these two extremes.



The swing part refers to the regular swing of the market. The mandate of the swing trader is to find how a stock is going to react in the coming days and weeks dependent mainly on its current position. The major factor in the consideration that is used in swing trading is the price trend itself. The movement of the market as a whole does garner some consideration but only as a background to the price swings that are anticipated. The idea with swing trading is basically to get in, realize some profit and get out. It can be that simple.

Swing traders are often those that do not have the means or equipment to enter into day trading, and are looking for better returns than the long-term investor. When it comes to day trading there are serious margin calls, large minimums to meet and while it can be exciting it can also be nerve-racking. Day trading is not for those with a faint heart. Swing trading is a less risky alternative that still offers the opportunity for profit and a sense of accomplishment as it does not take a particularly long time to see some advancement in your trading account.

Swing traders are not likely to be the larger firms that deal in very high volume trades. They are more likely to have the capability to do extensive market research and will hold positions longer, changing their allocation relatively slowly. In most cases they will have the information and stability to remain in their market position. Largely, swing traders are the smaller outfits and individuals that are looking for price fluctuations. These do not require extensive research and can be followed by just about anyone. If you feel like you can find the range that a stock is trading in, and especially if it looks like the overall market is stable then you can turn a profit by getting in during the price trough and getting out at the crest.

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