Pros and Cons of Swing Trading

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Pros and Cons of Swing Trading
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Index

• Swing Trading
• Pros and Cons of Swing Trading
• Pros of Swing Trading
• Cons of Swing Trading

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Swing Trading

• Swing trading is a longer term trading style that
  requires the patience to hold the trades for
  several days at a time.
• It is specially for those who cant monitor their
  charts throughout the day but can dedicate a
  couple of hours analyzing the market every night.
• Below are some Pros and Cons of Swing Trading.

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Pros Cons of Swing Trading
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1. No Need To Be A Full-Time Job

• The first two requirements for trying swing
  trading are knowledge and investment capital.
• As a swing trader, For the whole day, you
  wouldnt need to be attached to the computer
  screen.
• It is mostly because you now have a longer
  timeframe having days to weeks as opposed to
  minutes to hours.

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• With this, you can trade while also maintaining a
  separate full-time job.
• Make sure that you dont continually check the
  trading screens while at work.

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2. No Need For Monitoring

• Swing trading does need continuous monitoring.
  You can make use of stop losses.
• It ensures that you won't be losing too much in
  cases when the market goes against your way.

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3. Great Potential For Significant Profits

• Generally speaking, trades need time to provide
  bigger profits.
• Keeping trade open for a longer period of time
  will have a higher probability of providing
  higher gains than trading in-and-out of single
  security multiple times a day.

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4. Does Not Require Expensive Investment

• You can use swing trading with a single computer
  and conventional trading tools.
• You dont need to have a state-of-the-art
  technology of day trading.

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1. Risk of Substantial Losses

• It doesn't really go away. Just like any other
  trading style, swing trading has the potential to
  result in substantial losses.
• Swing traders hold positions longer than the day
  traders which means that there also a bigger risk
  of incurring the larger losses.

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2. Higher Margin Requirements

• Swing trading involves holding trades overnight.
  With this, margin requirements tend to be higher.
  
• Maximum leverage is twice the amount of your
  capital.

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