Armchair analysts and technicians are just everywhere these days. Unfortunately, most of these folks are terrible traders. To compare technical analysis with swing trading is to mistake sportscasters for players. Of course, some sportscasters were players, but the skills necessary for playing are very different from those of broadcasting and analysis. The commitment necessary to be a swing trader means adhering every day to a disciplined approach with every trade in every market. Put simply, swing trading is unsuitable for the undisciplined technician because it means putting real money on the line.
For those wanting a low risk, low reward trading style, swing trading is not for you. Using neither an exact science nor a system, swing traders choose when and how to enter and exit financial markets to gain an edge and reap profits. Recognizing when to buy and sell is the primary challenge for all swing trading strategies using stocks, options, futures, indexes, bonds, currencies or commodities. Volatility is useful to swing traders, but they do not need perfect timing to buy at the bottom and sell at the top of price swings and oscillations to be profitable.
Mathematical models and algorithms seldom work with every financial instrument or every market, but swing traders can often benefit because they can take advantage of opportunities that are dismissed and overlooked by hedge funds and institutions as being too small. The best swing traders take advantage of other traders' optimism and pessimism that occurs over days or weeks or a few months while being disciplined enough to remain calm and be ready to move when the time is right for them.
Swing trading may be useful for those trying to earn additional income or improving the returns on their portfolios. These part-timers often do their analysis when they return home from a full-time job and execute their trades the following day. Earnings using swing trading money management rules can compound overall returns significantly; that is why some are able to trade effectively with their IRAs (Individual Retirement Accounts), Roth IRA and 401(k) accounts without worrying about short-term taxes.
In summary, swing traders exercise incredible self-restraint, discipline and calm to properly size positions and limit losses to their portfolios. They do not walk or stampede with the herd while being aware that they are a unique and fundamental part of the herd. Opinions come from the average Joe and the brilliant analyst, but learning to trust his own opinion may be the quality that is most necessary to become good at swing trading.
Forex News Trading delivers fresh and insightful news within the world of currency trading. On top of this, beginners and professionals would also find it a good idea to also read up on the latest Broker Forex Review for some additional information.
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