Swing Trading in the Stock Market: Strategies, Benefits

Swing Trading in the Stock Market: Strategies, Benefits

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Swing trading is a trading style that looks to capitalise on short-term price swings or fluctuation in the stock market. A swing is a significant upward or downward movement of the price that results in a new price point. It is more of a movement within a trend than a trend itself. 

The goal of a swing trader is to purchase stock at the start of the swing and sell when prices are rising. This was the short version, now let’s elaborate this query of what is swing trading in india and know more about.

What is Swing Trading?

In swing trading, traders purchase and hold a stock for a short amount of time, typically a few days or a few weeks. The goal here is to profit from price movements, fluctuations, or "swings" in the price of the stock during that time. Price fluctuations are primarily caused by one or both of the following factors:

1) Significant changes in a company's fundamentals impacting its business. 

2) Changes in the perception of an industry, sector, or even the market by investors

Of course, a swing trader must implement technical analysis before they place their buying and selling order. Employing small, accurate inputs, from their assessments they seek to profit on the retracement of price swings. 

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Table of Content

  1. What is Swing Trading?
  2. What is the Aim of Swing Trading? 
  3. What are the Steps of Swing Trading?
  4. Swing Trading Strategies
  5. Advantages of Swing Trading
  6. Disadvantages of Swing Trading
  7. Conclusion

What is the Aim of Swing Trading? 

Traders employ swing trading strategies in India to purchase or sell a stock quickly and make profits, generally, within a few days or weeks. So, swing traders typically look for stocks that are trending and enter the trade at the start of the swing. They ideally want to exit the trade at the end or the trend; however, the end of the swing is only known in hindsight, which is why some swing traders close their trade prematurely—before the trend ends.

What are the Steps of Swing Trading?

Typically, a swing trader looks out stocks with high trading volume (a lot of trading activity) that generally exhibit high price volatility. Swing traders typically analyse one year charts to analyse price and volatility. 

Step 1: Choose a Stock

The first stage is to identify a stock that can provide substantial profits in a short time period. You can choose any security or stock as long as you are well-versed if you are a seasoned trader; if you are a novice investor, you may stay away from extremely volatile stocks.

Step 2: Analyse the Price Chart 

Next, you learn more about a stock's past trends to predict its future trends. You assess its price chart using a bunch of technical indicators; you could use indicators like the moving average, moving average convergence divergence (MACD), relative strength index (RSI), volume, and trend lines, etc. To understand what can impact the company's performance in the future, you will need to also scan company news and industry news.

Step 3: Determine Entry & Exits

Then, when you find a suitable stock, you need to determine your entry and exit; typically, a rising stock price falls after meeting its resistance level and a falling stock rebounds back up after touching its support. The term “swing” is used to describe this upward and downward motion. So, a common swing trading method is to purchase the stock and sell it near the resistance. 

That said, you determine your targets and stop losses before entering the trade. For example, you could set a target price at 20% above your entry price and a stop-loss order at 5% below it.

Swing Trading Strategies

Swing traders attempt to make a number of smaller trades that have a total value equivalent to the size of their trading targets rather than trading one stock at a time. As a swing trader, your main goal is to profit from changes in the price of your selected asset. You do that by taking swift action when the opportunity arises and by minimising your losses whenever necessary. Swing traders mainly depend on technical analysis; however, some may also refer to fundamental analysis in addition to technical analysis to find stocks that are trade-worthy.


The most popular tactics are:

1. Trend following: With this technique, trades are made in accordance with the direction that the market is expected to go.

2. Mean reversion: Using past price data, this approach tries to determine the optimal time to buy or sell an asset. Then it constantly follows that trend to maximise gains when it swings back in the direction opposite to its initial trend.

3. Moving averages: These are basic indicators that help forecast an asset's trajectory in the future.

Advantages of Swing Trading

Swing trading benefits from the potential for huge profits. If done correctly, swing trading using a trading app can provide high returns by profiting on short-term price changes in stocks. Depending on the trader's strategy, swing trading can be performed part-time since traders only need to check their positions occasionally.

Swing traders are less exposed to market volatility and unforeseen events because they maintain positions for a shorter amount of time than other traders. Swing trading may serve as an effective approach for volatile markets since it enables traders to make money from swift price changes in either direction.

Disadvantages of Swing Trading

Swing trading is risky since traders run the risk of losing money if they make the wrong deal or hold a position for too long. Successful swing traders have to exercise discipline in their risk management method and trading technique because emotional decisions can result in losses

Swing traders need to be well-versed in technical analysis, the Indian stock market, and any market trends, news, or events that could influence stock prices. Swing trading needs dedication and time to monitor positions and discover prospective trades, which can be challenging for traders with other obligations.


Swing trading is a style of trading in which traders purchase and hold stocks for a little amount of time, typically a few days, maybe even a few weeks, and attempt to profit from changes in the price of the stock during that time. Swing traders utilise technical analysis to spot patterns and trends in the price of the stock before making buys or sells based on these trends and patterns. 

Buying low and selling high within a somewhat constrained time span is the goal. Swing trading can have both benefits and drawbacks, therefore effective traders must have a solid grasp of technical analysis and the Indian stock market. In addition, they must be disciplined in their risk management and trading strategies in addition to having a solid 


Swing Trading FAQs

The Indian stock market has no set minimum investment requirement to begin swing trading. However, it is advised to have enough funds to control risk and pay for trading expenses like brokerage fees.

Yes, it is possible to perform swing trading in both rising and falling markets, since stocks rarely exhibit a constant rise or decline. 

Some of the common swing trading errors include, failing to implement a sound risk management strategy, trading on feelings rather than data, and not sticking to a consistent trading approach.


Swing trading may be appropriate for beginners, provided they have a solid grasp of technical analysis, are familiar with the Indian stock market, and are willing to develop a disciplined attitude to trading. Before you invest significant money, it's advisable to begin with a little amount of money and practise on a demo account.

Besides swing trading, you can explore other popular trading methods like position trading and momentum trading etc.