Swing trading can be beneficial for traders as it helps in booking profits in short duration of time. Some tools like setting Stock alerts and descriptive charts can easily help you in making the right decision. Let us look at some of the tips and some of the advantages of swing trading.
- No Brokage – One of the advantages of Swing Trading is that when you do not trade intraday, you need to take delivery of the securities and many discount brokers do not charge any Brokage on the delivery of stocks. Hence it becomes easy to make profits.
- Reduced Risk – Swing Trading can also help you in mitigating the risk. Let us assume that you buy securities with a motive of selling them in a week and making a profit. But unfortunately, because of the market situation, the price of the security falls, in such a case, you can keep the securities with you and sell them when the price increase. This is not possible in intra-day trading hence you may have to take the loss.
- Bracket Order – Another tip that can help you in making profit and controlling loss is that you can punch in the bracket order. Bracket order sets a limit for the selling price. Let us suppose that you got a security for $5. You can set the selling range in bracket order as $6 and $4.5. In such a case, the security will be sold as soon as the stock hits the price of $6 or if the security falls below the price of $4.5. The technique helps in booking profit and controlling the loss.
- Stock alerts – Setting stock alerts can help you in making buying and selling decisions. If you are aware of the fundamentals of the stocks and you think that the stock is underpriced, you may set a stock alert for a situation when the price rises greater than a pre-determined price. You will be alerted with a text message and an email.
These techniques can help you in booking profit with Swing Trading and exploit the full potential of the trading techniques.