What is Swing Trading?

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About Swing Trading:

It is a style of trading where investors keep their positions for longer than a single day, typically holding onto stocks for several days or weeks.
The goal of swing trading is to capture gains in a stock’s value as it swings up and down.
A swing trader will look for stocks with high volume (a lot of trading activity) and volatility (price movement).
The entry into a swing trade involves setting up stop-loss orders (to limit potential losses) and target prices (to capture profits) based on support and resistance levels.
Swing traders buy at support (lower price level) and sell at resistance (higher price level) anticipating the stock’s price to swing back and forth within these bounds.
What’s the objective of swing trading?
- The primary goal of swing trading is to profit from short- to medium-term fluctuations in stock prices.
- Traders aim to enter and exit positions quickly, typically holding stocks for 2 days to a few weeks.
- Swing traders capitalise on both upward and downward movements in the market, seeking to take advantage of trends and momentum.
Swing trading offers flexibility and can be less time-consuming compared to day trading. Traders can benefit from short- to medium-term gains and adjust their positions swiftly based on market conditions.

Q1: What is Nifty?

NIFTY is a market index introduced by the National Stock Exchange (NSE). It is a blended word – National Stock Exchange and Fifty coined by NSE. It was established in 1996 with the name CNX Nifty. Further, in 2015, it was renamed Nifty 50.

Source: Explained: What is swing trading