![]() Bollinger Bands Methodīollinger bands show the direction that the market takes. ![]() The resistance range is a sellers’ market. The support range shows a downtrend when buyers become active. While a support line shows a price range that falls below the actual market price at a given time, a resistance line shows a range that is above the current market price. These show when prices are set to change their direction. In a price chart, support and resistance lines are some of the most important things to look at. It’s important to note here that a trend often comprises a certain reverse movement before continuing in the main trend’s direction. In swing trading, Fibonacci retracement can help identify retracement levels on a price chart. These levels measure how much of an earlier movement the price has retraced and use percentages of 23.6%, 38.2%, 50%, 61.8% and 78.6%. Levels that are associated with a percentage are then drawn between these price points. In swing trading, this can help traders create their entry and exit plans accordingly.įibonacci retracement is an indicator that can be drawn between any two important price points, usually a high and a low. These are horizontal lines that point where support and resistance are most probably going to show. Fibonacci Retracementįibonacci retracement levels originate from the Fibonacci sequence. Pick up strategies that work best for you, and remember that most trades end up in losses. And, it’s important to analyze the risk/reward ratio well. ![]() However, it’s worth noting a cliched dictum of the financial world: past performance is no guarantee of future results. So, they look for set-ups that produce predictable trends, and breakouts and identify momentum in the asset price at the right time. Each trader also tries to get an upper hand over other traders. Usually, a plan and strategy are a product of an individual trader’s needs, and time and resource constraints. To devise solid trading plans, patterns, indicators (technical analysis tools) and strategies are overlaid. These patterns are often read in the context of strategies such as the Fibonacci Retracement, and Trend Catching Strategy. The most popularly used patterns are multi-day chart patterns, moving averages crossovers, head and shoulder patterns, cup and handle patterns, and flags and triangles. Swing traders use a number of strategies and patterns to ensure success in deals. ![]() Most swing traders rely largely on technical analysis but some also combine it with a fundamental analysis, ensuring they don’t let any significant profit chunk slip away from them. It’s about buying at a trough and selling at the crest of a stock’s price movement. It falls somewhere between day trading, where trades are closed on the same day as they are bought, and long-term trading, which often involves years. Swing trading, as the name suggests, is a game of swinging from buying to selling, at lows and highs for a relatively shorter period – usually from a few days to a few weeks. On BlackBull Market's secure website What is Swing Trading? ![]()
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