What to Know When You Swing Trade

Swing Trading Can be hard, both mechanically and emotionally. But when you are comfortable and confident about your approach it is definitely worth it.

Some things you should know about swing trading are.

1. Losing Streaks can happen

All swing traders will have a losing streak from time to time, so you had better prepare yourself for it, both with your money and emotionally. You want to always keep your losses short so that anything you lose is only a small portion of your total account. This way you can afford to lose a few trades in a row.

You also want to make sure that you are emotionally ready. Going through a bad time in your trading can be very hard especially for a new trader who does not have the experience to recognize all systems go through losing streaks and if your system works in the long run that is all that matters.

2. Always take small losses

A small loss is better than a big one. There is no sense letting your stock continue to fall especially if you are just trying to catch the short term moves. Letting your losses continue to get bigger is one of the fastest ways to destroy your account.

The other reason for cutting your losses short is the fact that losing streaks occur. The better you are at controlling your losses the better you will be able to ride out anything that happens.

3. Do Not Exit Too Early

I am not a fan of exiting a trade before you have an exit signal to do so. If you exit a trade too early you could be profitable on that one trade, but it might not be able to pay off your losses and profit overall. Sticking with your original trading plan is always the best option.