Strategy · Active Trading

SWING TRADING

BullishDefined riskIntermediate

Overview

Holding positions for 2-10 days to capture short-term price swings. Combines technical analysis for entry/exit with fundamental awareness of catalysts. Requires active monitoring and strict risk management.

Setup

1.Identify stocks with strong momentum, clear chart patterns, and upcoming catalysts.
2.Wait for a setup: pullback to moving average, breakout above resistance, or pattern completion.
3.Enter with a limit order at your planned level.
4.Set a stop-loss immediately after entry (typically 5-8% below entry for stocks).
5.Set a profit target at 2-3x the risk distance.
6.Exit before earnings unless you specifically want the event exposure.

Max profit

Typically 10-25% per trade in favorable conditions.

Max loss

Limited by stop-loss placement — typically 5-8% per trade with proper position sizing.

Breakeven

Entry price plus commissions and spread.

When to use

In trending markets with clear momentum. When you can check positions at least once per day. When you have time to research setups.

When to avoid

In highly choppy, news-driven markets. When you can't monitor positions actively. During major earnings seasons unless you want event exposure.