Wednesday, 26 August 2015

6 Stock Trading Signals To be Followed Being a Trend Trader & Swing Trader

Trading in financial market is a complex as it requires strategies while investing. The most trading strategies are divided into two categories i.e. ‘Trend Following & ‘Swing Trading’. Both the strategies have its pros & cons.

A trader who follows ‘Trend Following’ has risk factors in an uptrend or downtrend & remains stable until the trend takes place. Whereas, the swing trader buy at support & sells at resistance within the limit of range bound markets.

Swing trading is effective for short span of time while Trend Following strategy can be implemented for months. Traders & beginners must apply one of these strategies to gain excellent results.

Trend Trader Versus Swing Trader
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‘Trend following’ traders analyze the economical, political and environmental aspects that influence the risk factors in well mannered. Whereas, ‘Swing traders’ avoid this & focus on short term pricing.
Trade Frequency:

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Swing traders performs increased number of positions & carry it for short time which is a profitable Stock signal to trade while the trend followers use to apply fewer positions & carry for longer time.

Position Selection
Trend traders use to short sell their securities with up trends and downtrends while swing traders use to short sell securities at support or resistance level.

Position Size:

Swing traders carry longer positions for short time while trend traders carry smaller positions for long time period. Also, the swing traders have more leverage than trend traders which is a profitable for substantial gain.

Entry Strategy:

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Entry strategy works as a best Stock trading picks as this strategy helps to lower down the risk by staying for the counter trend.

Swing traders bear risk factor at support & resistance level, thereby minimize the obstacle by positioning in opposite direction.

Exit Strategy:
Swing traders exit their positions after reaching to the ‘Profit targets’ whereas Trend traders carry their positions until the trend changes.

Both the traders apply market timing strategies through various skills. From the experienced trader’s perspective, it is possible to mix up these strategies but beginners should stick to the particular strategy.
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