Swing Trading – Need to Know Tips

Swing trading any market online can be an exciting and profitable career. With a wide variety of markets to trade, one can find almost anything to suit their tastes. However, many new traders often forget about the risks involved with trading and expose themselves to much more risk than their accounts and emotions may be able to withstand. If you are just starting out as a trader, never neglect these two important facts.

Don’t trade with your retirement money. Never use any money for your trading capital that you can’t live without. This doesn’t mean you will lose while trading, but be smart and don’t make the mistake of mortgaging your house in order to open up a trading account. There is risk involved with trading and it may take you a little longer and cost you a little more than you originally planned before you truly master the art of trading. For this reason, never trade with any money that you can’t afford to lose.

Don’t bet the house. While forex trading and other similar volatile markets can offer enormous returns over a short period of time, never bet the house on any single trade. Professional traders limit and restrict the amount they place on each trade in order to manage and control risk. The commonly accepted amount of risk you should expose yourself to is no more than 2% for every trade. This means that the total you stand to lose on any single trade at any time is no more than 2% of the total trading capital you have available.

Swing trading is exciting and can be very rewarding. With some markets open 24 hours a day 5 days a week, you can open and close trades almost as you wish. However, never ignore the fact that trading involves risk. If you want to prosper in your trading career, don’t make the mistake of neglecting to manage your risk and capital before it is too late.