Short-term holdings provide excellent profits if you apply the right trading strategies. Swing trading is one popular short-term strategy used by traders. The key to maximising gains from the swing technique lies in picking the right stocks indicating short-term growth traction. However, swing trading stocks have an element of risk owing to market movements and conditions over their holding period. Therefore, as a trader, you need to understand the various challenges of the swing technique. This article discusses key swing approach strategies for addressing the challenges of maximising your gains.

What Is Swing Trading?

Under a swing strategy, you can hold a stock position for a few days to a few weeks to reach your desired profit objective. You thus capitalise substantially through the short-term securities’ price swings. The swing approach is conducted on a higher time frame than a scaling or day trading approach. So, it involves higher profit and loss potential. Traders thus eliminate the chaos of intraday trading and focus on the broader picture.

However, the swing technique comes with its challenges due to price fluctuations, changes in corporate fundamentals, and related stock market trends/conditions.

Swing Technique Key Challenges

The following are the key challenges of the swing technique:

Higher Risk

Compared to day trading or scaling, the swing technique has a higher risk due to the fact that you are leaving your position open overnight. With your position being open and subject to evolving market conditions, there is an increased risk.

A Lot Of Patience

The technique expects you to have a lot of patience as the trades could take a few weeks to materialise.


Brokers could charge you fees or commissions for undertaking the trading.

Swing Trading Strategies To Overcome Challenges

Swing trading may give rise to some challenges that you may need to overcome:

Place Limits

You should know how to set limits like the 1% – 2% rule for putting your money in a single trade or overall investments. It will help you judge how much you can afford to trade.

Entry/Exit Positions

You must select the asset and time frame after careful market research. Likewise, the entry and exit strategies are based on the swing technique signal. For instance, include stop loss to mitigate risk. If you could not exit the trade, despite the stop loss, exit the trade based on your swing trading strategy.

Technical Chart Analysis

In this age of technology, you should be able to access technical charts and analyse them through the various tools available. Fibonacci retracement pattern, Support and Resistance lines and MACD crossover trading system are some tools which will help get your swing fundamental analysis right and minimise risk while applying the technique.

Monitoring Positions Regularly

You must regularly monitor your trade while it is open owing to changing market conditions, gapping and slippage.

Stay Focussed

The swinging approach requires you to stay focused owing to evolving market fluctuations impacting the stock price movements. So, you must have the right mindset to make sound trading decisions for good gains.


Your investment approach would depend on your preferences, objectives, risk appetite, and investment funds. Opening a trading account online is the first step toward your swing trading journey. The swing technique is a short-term trading strategy that will help you earn good returns from short-term price movements. Therefore, you need to be aware of the various challenges in executing the process and ways to overcome them for maximum returns.

Disclaimer: This blog is not a source of investment advice. Trading and investing in the securities market carries risk. Please do your due diligence or consult a trained financial professional before investing.

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