Ever wondered what is swing trading? Swing trading is about a trader taking advantage of the swings in price or oscillations of price as it moves up and down over time. Swing trading is an extremely popular style of trading can you can apply to almost any market. The three most popular trading styles are day trading, swing trading and trend or buy and hold trading. Swing trading finds a middle ground between day and buy and hold trading and is the preferred style, regardless of the market. Let’s take a look at the other styles.

If you open and close all of your trades within a single day, you are known as a day trader. Scalping is also considered a day trading style of trading. While sclaping can offer extremely high rates of return, it does so with very high risk levels. Buy and hold traders take the extreme of trading and commonly hold trades for several weeks to months. The buy and hold strategy requires large amounts of capital to be effective.

Swing trading is medium term focused and usually has traders holding trades for several days, but less than a week. Do traders hold trades for longer periods? Of course, but this is just a general rule of thumb. While swing trading can be applied to any market, some are more suitable than others. Many traders swing trade because it is the only style to offer high rewards with the lowest levels of risk. This is the perfect balance for trading profitably.

Scalping, while sometimes profitable, usually results in many traders melting down and blowing up their trading capital. The most effective style of trading is swing trading. This style of trading can be applied to forex, options, futures and many more markets.