- Swing trading is the buying and selling of futures or commodities on a multisession basis. The unique characteristic of swing trading methodologies is that open positions are held through at least one session or close. Swing trades commonly last anywhere from two to six days but may extend several weeks.
- Swing traders are more reliant on fundamental analysis than intraday or day traders. Although swing traders may use technical tools and indicators to refine a trade’s entry point, traditional fundamentals, including macro-trends and geopolitics, play key roles in their trade selection and management.
- Holding an open position through a market’s close requires a swing trader to contemplate several unique considerations:
- Account for extensive margin requirements
- Carry and finance costs
- Systemic risk exposure
Swing trading is a popular approach to engaging equities, derivatives, and futures.