Swing Trader

What does swing trader mean?

A trader that usually uses the “weekly chart” and makes his trades within a bigger time frame (7-10 days). Usually, swing traders buy and hold for few days before selling again. While fundamental analysis may also be used in swing trading, primarily the trader is looking to profit from short term price momentum in an asset.

Swing trading is primarily used by smaller home based traders, as institutions trade volumes which are too large to move quickly in and out of individual stocks. While day trading is more well known, swing trading is the most popular form of trading for small investors.

Swing traders will typically look for multi-day patterns in their technical analysis, and are less likely than day traders to use margin, due to the higher risk for a margin call. They also tend to use larger stop losses to match the proportionally larger profit potential of their trades.