What is Swing Trading and How Do You Trade a Swing?

What is swing trading? Nick Radge explains in this short video.

Swing trading is short term positioning, usually less than two weeks, but we can essentially use swing trading on any time frame.

As you know, price action, price patterns are fractals. We’ll find the same price action on a daily chart as we will on a five minute chart. We’ll find the same price patterns in a foreign exchange chart as we will in a BHP chart. So it doesn’t matter what we’re trading.

It’s the same with trends. Trends are everywhere. Trends can be found on any time frame in any market. Same with swing trading.

The difference between swing trading and momentum is that swing trading is going against the immediate price action of the trend. Not against the trend itself, but the immediate price action within the trend.

So, if we look at the two diagrams in the video, these are the two setups that we’re looking at.

One is a trend continuation, so when I say, “against the immediate price action”, the trend is up, but the immediate price action is down, and we’re looking to buy on this point down here, and then ride it higher.

Conversely, in the second image, we’re looking to go against the immediate price action.

That’s the difference between swing trading and trend and momentum trading. Momentum in this example we’d be buying on a break, so we’re waiting for price to go up before we jump on board, whereas swing trading, we’re buying as it’s pulling back. You can hold the position for one minute, two days, five days, two weeks, we’ve even got some weekly charts in here, doesn’t matter. Same fractal, different markets, different time frames, whatever suits you.

Learn more about Nick’s short term trading strategies.