Smart position sizing & risk management

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Trading Strategies

Swing Trading

A strategy of holding positions for days to weeks, capturing medium-term price swings.

What is Swing Trading?

Swing trading involves holding positions for several days to several weeks to capture price moves (swings) within a larger trend. It sits between day trading and long-term investing.

Advantages

  • No PDT restriction: you're holding overnight, so it's not a day trade
  • Less screen time: check charts a few times per day, not every second
  • Larger moves: capturing multi-day trends yields bigger per-trade profits

Common swing trade setups

  • Pullback to moving average: buy when an uptrending stock pulls back to the 20 or 50 MA
  • Breakout from consolidation: buy when price breaks above a multi-day range
  • Oversold bounce: buy when RSI drops below 30 and starts turning up

Related Terms

ABCD Pattern

A four-point chart pattern (A-B-C-D) where the CD leg mirrors the AB leg, giving a predictable entry at point C.

Consolidation

A period where price trades in a tight range, indicating a pause before the next directional move.

Fibonacci Retracement

Horizontal levels at key Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%) that identify potential support and resistance.

Moving Average

A smoothed line that averages price over a set number of periods, used to identify trend direction.

Sector Rotation

When money flows from one market sector to another as economic conditions change or investors shift risk appetite.

Support and Resistance

Price levels where buying (support) or selling (resistance) pressure historically prevents further movement.